Commodity market Updates

Precious Metals

Gold prices are currently trading at $1397.5, down by $12.7 on COMEX and at Rs.20,227 down by Rs.300 in the Indian markets. Rebound in dollar index along with profit booking sent gold prices lower. Dollar index continues to move higher on the back of expectation of positive economic data and thereby is pressuring gold prices. Most of the Asian equity markets closed lower and European equities also continue to trend lower. China’s trade surplus in the month of October came in higher than expected as imports grew at a slower pace.

In the evening, data is expected to indicate declining trade deficit along with declining jobless claims. So the dollar index might remain higher and thereby gold prices might face continued pressure. Silver is currently trading at $24.45, down by $1.40 on COMEX and at Rs.40,686 down by Rs.2,000. Silver prices fell drastically on reports of COMEX raising margin requirements to $6,500 as against $5,000 previously. The gold-silver ratio fell to as low as 48 but given the underperformance of silver on the downside, the ratio has moved back higher to 51 levels. Overall, we expect silver prices also to continue to remain on the lower side.

Base Metals

Base metal prices are trading lower with losses of anywhere between one to two percent on the back of higher dollar index and weak equity markets. Most of the Asian equity markets closed lower and European equities

also continue to trend lower. China’s trade surplus in the month of October came in higher than expected as imports grew at a slower pace. Dollar index continues to move higher and is currently trading higher by half a percent thereby adding to the pressure. In the evening, data from US is expected to indicate declining trade deficit. Also the initial jobless claims may come in lower and import index may come in higher thereby giving positive indication for base metal prices.

Overall, positive economic data from US might prompt slight pull back on the higher side for base metal prices.

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Base metals and Bullions Report - 3 November 2010

Bullion Metals

Gold bounced back from its intra-day low of $1350/oz levels to current levels of $1359/oz as the dollar index retreated from its session highs ahead of FOMC decision later today. Silver also edged higher to $24.90/oz. The dollar index fell in European hours after UK’s PMI Services data posted better-than-expected reading and
European equities also traded in greener pastures. MCX gold and silver also recouped from their respective session lows. Today, there is heavy retail buying expected for bullions in India as the nation embraces its
biggest gold buying festival, ”Dhanteras.” However, this may not have much impact as stockists have already bought the yellow metal earlier to gear up for today’s activities. The Fed’s announcement pertaining to quantitative easing and interest rate is keeping potential buyers on sidelines which may lead to sideways trading. However, economic reports later today may show an improvement in U.S. factory orders, ISM on-manufacturing composite index and ADP employment change
which may prove to be some momentary triggers for the markets before the Fed announces its monetary policy decisions.

Base Metals

 
Base metal prices are trading higher on the back of weak dollar index and positive equity markets. Most of the Asian equity markets closed higher, Hang Seng was the top gainer and closed higher by 2 percent. European equity markets also continue to trade in green. PMI data from UK came in better than expected and thereby
supported prices. In the evening, ADP employment data is expected to report job additions. Factory orders and ISM Non- manufacturing data is also expected to come in higher, thereby giving positive indication for prices. In the late hours, FOMC will also announce its policy decision but market will be reacting to that tomorrow. Overall, we expect base metals to continue to remain on the higher side.

Courtesy - Carvy comtrade 

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Indian Commodity- Precious Metals and Base metals Updates

Precious Metals
MCX gold prices shot upwards into unchartered territory and reached the much-talked about levels of Rs. 20,000/10gm, levels the country has never seen so far, spurred by the gains in global prices of the metal. Silver also ran after gold prices and marched higher than gold which resulted in the metal rallying to fresh 30-
year high levels. COMEX gold futures rose on tumbling dollar which gave a boost to commodity prices across the board. The talk of monetary easing in the United States, to boost the world's biggest economy has been hitting the U.S. currency for weeks, while benefiting dollar-priced commodities. African Barrick Gold also cut its
2010 production target for the second time in three months. We don’t see much of a respite for the dollar any time soon, especially when reports may show today that U.S. trade deficit widened further in August. Jobless claims data are also scheduled later today. Markets will remain volatile and gold may take some dips before going forward. In India, higher prices are still not marring demand for the yellow metal ahead of festive and marriage season. Jewelers are buying to build up stocks for festival sales. The nation’s imports this month may exceed 50 MT, according to Reuters’ sources. We expect prices to remain higher and trade in the close vicinity of Rs 20,000/10gm.

Base Metals
Base metal prices are taking a correction on the back of rebound in dollar index and paring of gains by European equities. All the base metals are trading lower by half a percent as traders might be booking profit. Most of the Asian equity markets closed with gains of close to a percent. European equity markets opened higher but could not sustain gains and are currently trading modestly in red. Dollar index which was trading lower by close to a percent has rebounded and is now trading lower by 0.6 percent. In the evening, trade balance and initial jobless claims data from US are due to be released. The expectation is that trade deficit will widen further and the jobless claims will remain at prior levels. This may put in pressure back on dollar index and thereby might support base metal prices. Overall, the bias continues to remain on the positive side, but the gains might be limited.

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Commodity Blog Updates- Evening Round Up For Base metals and Bullion Metals

Precious Metals-

Stocks, U.S. index futures and commodity futures are declining ahead of key reports that may show America’s unemployment rate climbed. Gold futures traded lower as a halt in the dollar’s declines and the AngloGold announcement which prompted some investors to sell the metal. AngloGold Ashanti Ltd, the world’s third- largest gold producer, eliminated so-called forward-sales agreements which may result in demand component to be absent in future. Silver followed suit and fell more than gold. MCX gold and silver futures were also thrashed out on negative global cues.Markets are expected to remain highly volatile with some gains expected in bullion futures. Data expectations suggest that U.S. unemployment rate may rise to 9.7% in September, the second straight monthly rise. Non-farm payrolls are expected to have dropped 5,000 in September. Negative economic data may help gold prices recover on demand for safe haven asset. However, actual data will provide further direction.

Base Metals 

Base metals prices are trading modestly lower ahead of the crucial non-farm payroll data due to be released in the evening. Most of the Asian equity markets ended lower with the exception of Shanghai which closed higher with gains of more than 3 percent as the markets opened after a week long holiday. European equities also continue to remain modestly lower. The crucial data to watch will be the non-farm payrolls data from US. The expectation is that there will be job cuts and thereby will push the unemployment rate up by 1 bps to 9.7 percent. Job market in US continues to remain weak despite more than a year into recovery. Overall, we at KCTL expect, base metals to trade lower and the actual data will provide further direction.

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MCX- COmmodity Updates

Precious Metals

Gold futures spiked to $1362/oz during European hours as the dollar index reversed to losses from morning gains on speculation that monetary easing steps will be taken by more countries like U.S. and UK which will erode currency value. Other precious metals; palladium rose to nine year high and silver made fresh 30-year high levels. MCX gold and silver futures also rose on account of firm global cues. KCTL expects gold to sustain its gains with momentary jerks expected ahead of jobless reports. Reports may show a marginal increase in initial jobless claims while a decline in continuing claims and thus, giving a mixed view. However, yesterday’s report showed a decline in private sector jobs which may have some negative impacts on today’s jobless claims reports. Likely declines in the dollar index will keep bullion prices supported. However, actual data will further define the trend.

Base Metals

Base metal prices are trading higher on the back of better than expected industrial production data from Europe and lower dollar index. Most of the Asian equity markets ended mixed, largely consolidating. Industrial production data from both UK and Germany came in better than expected, thereby boosting optimism. BoE

held its policy rate steady, which was largely expected. The size of the asset purchasing program was also left unchanged. LME inventory witnessed decline in stocks for all the base metals, thereby supporting prices to trade even higher.

In the evening, initial jobless claims from US are expected to rise, thereby indicating continuing difficult job market. This along with re-opening of Chinese market tomorrow might send a small bout of profit booking in the late hours, but overall given the lower dollar index, we expect prices to remain higher.

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Commodity News- Base metals and Precial Metals Updates

Precious Metals
Gold marched higher to $1250/oz levels as the dollar remained lower against the euro on account of stronger European equities and better than expected German factory orders data. There are speculations that after Japan’s rate cut and bond purchase plans, other governments may also do quantitative easing which will
weaken currencies and boost demand for precious metals as an alternative investment. Silver extended gains to 30-year high and now trades at $22.90/oz. MCX gold and silver futures also traded higher on account of strong global cues.
Day ahead, the dollar index may trim its losses ahead of reports which may show a rise in ADP employment numbers in the U.S. Gold may see some momentary dips with overall trend remaining upward. ADP employment data could give some insights on Friday’s non-farm payrolls data. Markets will be curious to listen
to ADP reports.
Base Metals
Base metal prices which were trading higher with gains of more than a percent are giving up some of their gains as the dollar rebounds from lows; however the bias continues to remain on the positive side. Most of the Asian equity markets closed higher with gains of close to a percent. European equity market continues to trade
higher after data indicated euro-zone second quarter GDP growth remained unchanged. However the factory orders from Germany came in better than expected thereby providing support to prices. In the evening, there are no major data releases from US except for ADP employment change, which may give
indication as to how the non-farm payrolls data might be which is due to be released on Friday. Overall, we expect prices the positive trend to continue and thereby advice buying at lower levels.

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