Posts Tagged ‘Silver prices’

COMMODITY WEEKLY COMMENTARY 6th-10th September 2010

International gold prices rose back above $1250 an ounce for the second time in a week, as government bonds ticked lower together with energy prices. Silver prices also touched a new 16-week high at $19.57 an ounce on international bourses while it made a life time high on MCX.

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Apart from bad economic news globally, a weak Rupee is also pushing up prices in India. Base metal pack also ended higher last week on positive manufacturing and improved jobless data from both China and US which pushed prices higher. However, lower dollar index also supported prices. After being top performer for many days, Nickel has marginally underperformed other base metals as inventories on LME increased. In energy counter, crude oil futures got jiggled in hands of both bulls and bears. Prices remained volatile for the week amid mixed fundamentals.

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On one hand, prices got support from improved economic data but upside was offset by building inventories. The positive sentiment was offset by the effect of the abysmal inventory status report.

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U.S commercial crude oil inventories increased by 3.4 million barrels from the previous week; at 361.7 million barrels. U.S. crude oil inventories are above the upper limit of the average range for this time of year. Total motor gasoline inventories decreased by 0.2 million barrels last week, and are above the upper limit of the average range.

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It was an action pack week for agro commodities in which they agro commodities saw big movements. Most of the spices closed on negative note bearing in mind the overseas weakness coupled with arrivals in some spices. Dip in Brazilian and Vietnamese pepper parity put pressure on Indian pepper as well and hence we saw two week continuous weakness. Similar to pepper, jeera futures also dragged down on dull spot trading. There was no respite for turmeric futures and they fell like nine pins for straight seven week on low stock buying amid the news of increase in acreage in Andhra Pradesh.

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Cardamom was sideways, while chilli was marginally up on short covering tracking the firm spot markets. Due to strong arrivals in major mandies coupled with beginning of fresh sowing of kharif pulses, chana futures surrendered their previous gain to some extent. Timely arrival of monsoon in southern and western regions has improved the sowing activity. Selling intensified in oil seeds and edible oil on the back of better crop estimate together with weakness in overseas market. Damaged crops in Russia, Europe and Canada, boosting demand for U.S. supplies to make animal feed, food and fuel revived maize futures. Guar counter was up on lower level buying.

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