Posts Tagged ‘gold prices’

COMMODITY WEEKLY COMMENTARY 4th – 8th October

Once again international gold prices tested their new highs last week as prices breached the psychological level of $1300 and silver marked the 30 year high on COMEX division. However local gold prices were mostly remained sideways during the week amid stronger rupee and profit booking which limited the upside in prices.

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Nevertheless, silver once again overshadowed gold movements and surged high to claim 33000 mark on MCX. In base metal pack copper along with nickel, zinc and lead started the week with positive energy but dull economic data from U.S and Europe economies pressurized the prices in later part. However improved Chinese  manufacturing data once again underpinned the prices and supported copper and nickel to end the week in green zone.


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Earlier, shanghai copper dropped to its lowest in more than a month last week as China’s move to curb property prices dented sentiment, but losses were limited by improving demand prospects and ongoing weakness in the dollar. In energy counter crude oil settled up last week helped by data showing a drop in U.S. crude and product inventories.


Further fall in dollar index also helped the prices to move up. U.S. crude stocks fell 475,000 barrels last week, data from the Energy Information Administration showed. U.S. distillate inventories fell by 1.27 million barrels in the week to Sept. 24, counter to analyst expectations for a 300,000 barrel build.


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In agro commodities spices pack witnessed see saw moves during the week and remained volatile. Pepper futures ended the week with negative impression amid weak exports and low trading activity. As per Spices Board data, pepper exports from India have gone down by 5% in volume term during April-August 2010 as compared to same period last year. Jeera futures also traded on a negative note during the week on extended selling pressure backed by weak domestic and export demand. Expectations of rise in acreage under jeera crop this season have also supported the down side.

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In oil seeds section soya bean and mustard remained under pressure as factors like bumper soya crop expectation and pick up in fresh arrivals to the spot market led the market to show a negative trend. The chana futures traded on a positive note for most part of the week retreating from previous losses on fresh buying from retail sector.

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COMMODITY WEEKLY COMMENTARY 27th September – 1st October

Gold prices hover around its life time highs last week on international as well as on domestic bourses as European stock markets extended their losses and crude oil dropped below $75 per barrel. However domestic silver futures gain reclaimed a new life time high on MCX while U.S silver hit a 30-year high as precious and base metals were further aided by a weaker dollar along with new data meantime revealed a downturn in European services and manufacturing output.

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A further decline in U.K mortgage and business lending, plus higher-than-expected U.S jobless claims for last week also supported the bullion counter last week. Base metal prices which were mostly trading lower during the beginning of the week bounced back strongly in the later part as investors moved to buy dollar denominated commodities to take advantage of fall in the dollar index. US equity markets ended lower as data indicated that house prices fell in July marking the eighth consecutive decline. Fed bought $2.07 billion worth of bonds, thereby boosting treasury prices and dollar continued to lose ground. In energy counter crude prices witnessed see saw moves during the week on mixed fundamentals. Crude traded below $75 per barrel as jitters increased due to the rise in U.S inventories highlighting weak demand, in spite of the dollar’s continued drop against its major rivals.

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Yellow spice turmeric showed wonderful recovery on dip in arrivals amid lower level buying. Domestic demand is expected to be strong during the ongoing festival season. With the same reason of dip in arrival, chilli futures also spurt in both spot and future market. Pepper surrendered its strength on heavy selling pressure, weak export demand in the middle of sluggish spot market. Fresh arrivals put pressure on jeera and cardamom futures and they closed the week on negative note. Fresh buying noticed in chana futures. Indian oil seeds and edible oil futures were moving on their own fundamentals. Fall in dollar index supported the price. Comfortable stocks could not give much impact on the prices. Soyabean and crude palm oil moved northward. Refined soya oil and mustard seed also closed the week on positive note.

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Fear of yield loss due to excessive rain in producing areas lent support to the guar counter; however upside was limited on lack of aggressive fresh buying. Technical support zoomed up mentha oil. Furthermore, temporary supply propped up potato in both physical and future market.

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Commodity Weekly Commentary 5th-9th April

In the week gone by interesting moves were witnessed in gold futures. Gold prices surged high on international bourses while strong rupee kept domestic gold prices under check. International gold futures ended the first quarter with a positive note on buying driven by volatile currencies, firm stock markets and oil as well as euro zone debt but it struggled to sustain gains since hitting a record above $1,200 an ounce last December.

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The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust said that its holdings stood at 1,129.823 tonnes as of March 31, 2010. Even, silver showed smart gains on international as well as on domestic exchanges. In base metal pack; copper futures hit 20-month highs last week, starting the second quarter in upbeat mood as improving demand sentiment and investor cash supported metals.

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Falling LME inventories helped aid sentiment in recent weeks, with copper stocks dipping 1,875 tonnes to 512,450 tonnes, having hit 6-1/2 year highs at 555,075 tonnes in mid-February. Nickel stood as outperformer last week among all the base metals as prices rose 34.9 percent in the first quarter of this year, outperforming other metals traded on the LME.

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The buying was triggered by expectations of stronger demand from stainless steel mills. In energy counter;  crude oil futures hit their highest level this year and posted the loftiest settlement for a front-month crude  contract in almost 1.5 years as a weakening dollar attracted buying.

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Bearish trend was witnessed in most of agri commodities in the week gone by. Guar pack futures fell last week tracking weakness in the spot market, hopes of normal monsoon rains in 2010 and sufficient stocks. The movement in guar seed is largely driven by the monsoon report as it is a rain-fed crop.

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However, in top producer Rajasthan, output is likely to drop by 80% to 241,000 tonnes in 2009/10 as scanty  rains trimmed area and yields. Profit booking at higher levels, drop in spot prices and rising arrivals  kept chana futures under check last week. In oil seeds section; soya bean and soya oil futures also  tad down tracking losses in the U.S. market, while rapeseed traded sideways tracking weakness in soya  market on output concerns.

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Traders are now speculating that output would be lower for mustard than the estimates considering the arrivals in spot market. In spices pack; jeera and chilli prices settled in red zone while pepper futures surged high for the third consecutive week due to extended bargain buying on the exchange platform. The factors supporting the rise in prices are firm rates in the international markets and active buying of exchange because of tight supply situation in the physical markets.

Know the Basics of Commodity Trading – Final Part

Hello Friends here we come up with an extension of our previous blog  “Why Commodities Trading? Know Now.. Part 1“.

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Know the Basics of Commodity Trading - Final Part

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Yesterday we read about the importance and need for Commodity Trading.

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In this blog we would read to understand that how can we do commodity trading, what is the process for that and how commodity trading works.

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Here we go with first question of the topic for the day..


How do you do commodity Trading?

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When you buy a Gold Futures contract, you undertake to do three things.

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1. Buy the amount of gold specified in the contract.

2. Buy it at the price specified in the contract.

3. Buy it on the expiry of the contract.

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This could be after one month, two months, three months and so on.


Of course, if you sell the Gold Futures contract before it expires, then you don’t have to worry about actually buying the gold.

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Let’s say you buy the Gold Future contract at say Rs 15000 per 10 gm.

Your hunch comes true and the gold prices rally to Rs 16000 per 10 gm.

You can sell the Gold Futures any time before expiry of the contract.


Gold and other commodity futures prices are quoted on the commodity exchanges in exactly the same way in which stock prices or stock futures prices are quoted on a daily basis in the stock markets.

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Now let us see How Commodity Trading works?

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They work just like stock futures 🙂

When you buy a Futures, you don’t have to pay the entire amount, just a fixed percentage of the cost.

This is known as the margin.


Let’s say you are buying a Gold Futures contract. The minimum contract size for a gold future is 100 gms.

100 gms of gold may be worth Rs 72,000. The margin for gold set by MCX is 3.5%.

So you only end up paying Rs 2,520.

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The low margin means that you can buy futures representing a large amount of gold by paying only a fraction of the price.

So you bought the Gold Futures contract when it was Rs 72,000 per 100 gms.


The next day, the price of gold rose to Rs 73,000 per 100 gms.  Rs 1,000 (Rs 73,000 – Rs 72,000) will be credited to your account.

The following day, the price dips to Rs 72,500. Rs 500 will get debited from your account (Rs 73,000 – Rs 72,500).

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Things You need to know about Commodities Trading 🙂

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Compared to stocks, trading in commodities is much cheaper, because margins are much lower than in stock futures.

Brokerage is low for commodity futures. It ranges from 0.05% to 0.12%.

Because of this, commodity futures are a speculator’s paradise.

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If you are a hard-core trader who follows the technical charts and do not really care what you trade, and if you are nimble and savvy, then commodity futures could be another asset class that you would be interested in.

The advantages in this line is that there are no balance sheets, no complicated financial statements.

All you need to do is follow the supply and demand position of the commodities you trade in very closely.

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Visit the commodities trading exchanges – NCDEX,NMCE and MCX – to find out which commodities are offered for trading, their contract size and other criteria.

You will have to get hold of a commodities broker but that should not be a problem.

There are lots of brokers that offer commodity trading these days.

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But, it would be wise to avoid commodity trading if you are a rookie or beginner.

A much better move would be always to initially trade in stock futures before opting for commodity futures.

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Note : For More Latest Industry, Stock Market and Economy News and Updates, please Click Here

Why Commodities Trading? Know Now.. Part 1

Why Commodities Trading? Know Now

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Are you comfortable enough to answer these given questions with certain level of confidence and conviction?

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For example,

What do you think gold prices will go up further?

Are you sure that crude oil prices are going to fall?

Have you heard that the soya crop this year is bad and will result in soya prices going up?


If you think that your answers and predictions have a good chance of coming true and are willing to bet some money on them, you could try your hand at playing the commodity futures market.

You might have heard about stock future trading quite often.

Lets discuss about commodity futures, now..

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The commodity markets have changed a lot from the poky, little hole-in-the-wall trading offices in narrow streets next to crowded markets where traditional dhoti-clad merchants used to trade.


Now India’s boast of 3 major national level commodity exchanges which are :

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National Commodity and Derivative Exchange(NCDEX),

Multi Commodity Exchange (MCX) and

National Multi Commodity Exchange of India(NMCE).

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These brand commodities exchanges have been set up and these are fully computerized.


More and more stock brokers are setting up commodity brokerages as well, and trading volumes in commodity futures is widely predicted to rival the volume of derivative transactions (futures and options) on the stock exchanges.


What’s more, you can also trade online.

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Well  first lets talk on the need and importance of commodities trading.


Why commodities trading?


Well, let’s suppose you want to buy gold because you believe that the price of gold will rise.

You could then buy gold ingots, store them, wait for them to go up in price, and then sell them at a profit.


But, you have to be sure that the gold you buy is pure, you have to find a place to store it, you have to provide the security, transport it to vault and other such hassles.


Therefore,a far better way to invest in gold would be to buy gold futures from the commodities exchange. This is much advisable step.

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Next Blog we would touch upon issues like how can we do commodity trading, what is the process and how it works. 🙂

Stay Tuned for more and more on this 🙂


However For More latest Industry,Stock Market and Economy News Updates, Click Here

Gold Buying Cools Off After New Records

 

Gold buying cools off after new records

Gold demand declined as prices struck a fresh high, after a slight pick-up seen in off take in the previous session.

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However, the most-traded December gold contract hit a fresh record high at 17,284 rupees per 10 grams, before trading 0.12% higher at 17,251 rupees tracking overseas leads.

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Meanwhile, it is said that traders were stationed on the sidelines seeking lower prices to stock for the ongoing wedding season while the business of dealers declined by about 50% on year as high prices dented demand.

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On the other hand, jewelery demand in India decreased 42% to 111.6 tonnes in Q3 to September, while total demand, which comprises jewellery and retail investment demand, fell 49% to 137.6 tonnes.

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Precious Metals are on Record Setting Spree :)

Precious Metals are on Record Setting Spree

 

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As gold rallied by Rs 80 per ten grams to Rs 17,095 and silver firmed up by Rs 110 per kilo to Rs 28,510 due to constant demand from stockiest on account of rising trend  in global market, both gold and silver resumed at a record high on the bullion market.

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However, due to worries about future inflation and economic uncertaintiesanother record high in the Asian marketgold hit , while Asian stocks bounced back as the bearish dollar kept assets in demand.

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Meanwhile, spot gold increased as high as $1,143.95 per ounce in early Asia trade, settling just above $1,140 while standard gold rose by Rs 80 per ten grams to resume Rs 17,095 from the overnight closing level of Rs 17,015.

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On the other hand, pure gold also firmed up to Rs 17,185 from Rs 17,105 while silver ready too hardened by Rs 110 per kilo to Rs 28,510 from Rs 28,400 previously.

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Earlier due to frantic buying by jewellers in the midst of firming global trend, gold prices touched a record high of Rs 17,300 per 10 gram in the bullion market and Silver coins also set a record by adding Rs 400 to Rs 33,900 for buying and Rs 34,000 for selling of 100 pieces.

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Moreover yesterday silver also rose by Rs 1,000 to Rs 28,350 per kg.

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Sudden Surge and the record setting spree in the precious metals can be attributed to frantic buying of gold in marriage season.

In between, gold in international markets too has climbed to a record high along with the weakening of dollar.