Series of economic data amid Indian Union Budget resulted in erratic price movements in commodities throughout the week. Market participants indulged actively themselves in the market. Bullions cut some of their losses in the later part of the week on short covering.
Expiry of February contract of base metals also made them very volatile. Most of them surrendered their previous gain on poor outcome of economic data.
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Strong dollar together with the most recent signs that the U.S. economy is still struggling to recover, led bearishness in all base metals. On the date of expiry, lead closed down and the gap between lead and zinc narrowed down to 90 paisa. Similar to base metals, even energy complex drifted lower on negative economic releases in the middle of strong dollar.
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A stronger dollar makes oil and other commodities less affordable for holders of other currencies. On MCX, it touched the 3722 and moved down towards the level of 3600 on profit booking. Rising number of rigs coupled with rising mercury in Midwest cooled down natural gas prices further. On Friday, commodities recovered marginally on improved US GDP.
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Bears were seen active in agro-commodities last week as most of the future contracts on NCDEX settled in red zone on weekly basis. Guar pack settled in red territory as weak domestic and export demand hammered maize prices on future bourses.
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In oil seeds section, soyabean also ended the week with negative impression as the Indian market moved in line with weak overseas market. Continuation of subdued demand for soy meal from South East Asian countries and ample stocks of edible oil kept prices under check during the week.
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Mustard seed futures traded range bound. Lack of demand and improvement in weather condition had a bearish impact on market in the week gone by.
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