Tag Archives: bullion

Gold Heads for Biggest Weekly Gain in Two Years

12 Jul

Federal Reserve Chairman Ben Bernanke said on Wednesday that the overall message from the central bank was that a “highly accommodative policy is needed for the foreseeable future”.

mcx gold

Gold rose for a fifth session on Friday, on track for its biggest weekly gain in nearly two years on easing fears of an early end to US monetary stimulus that as boosted bullion’s appeal as a hedge against inflation.

Fundamentals

Spot gold had climbed 0.1 percent to USD 1,286.21 an ounce by 0016 GMT. It touched close to USD 1,300 on Thursday, its highest in three weeks.

Bullion has gained 5 percent so far this week, on course for its largest weekly climb since October 2011.

Comex gold and silver were also trading near multi-week highs hit on Thursday.

Federal Reserve Chairman Ben Bernanke said on Wednesday that the overall message from the central bank was that a “highly accommodative policy is needed for the foreseeable future”.

Financial markets, which had tumbled after Bernanke said last month that the Fed’s USD 85 billion in monthly bond purchases could be scaled back this year, jumped on Thursday with the Dow and S&P 500 indices hitting all-time closing highs.

Gold, still down nearly 25 percent this year, could face further headwinds as some investors jump to rallying stocks, dumping holdings in gold-backed exchange traded funds.

Investors pulled USD 998.8 million from commodities and precious metals funds, up from withdrawals of USD 92.6 million the prior week, data from Thomson Reuters’ Lipper service showed on Thursday.

Gold traders in India, the world’s biggest buyer of the metal, refrained from fresh purchases as prices climbed to their highest level in more than two weeks.

Market News

The US dollar fell to multi-week lows against the euro and yen on Thursday as traders scaled back expectations the Fed would slow its asset purchases in the coming months.

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Bullion to remain under pressure, sell on rise: Emkay

19 Jun

In an interview to CNBC-TV18, Ashok Mittal, CEO of Emkay Commodities spoke about the current trend in commodities market.

Below is a verbatim transcript of the interview:

Q: How would you approach bullion going into that Federal Open Market Committee (FOMC) meet today?

A: We are expecting that there will be a lot of pressure on bullion prices , although they have moved up little bit in the last few sessions largely in India because of the weakening of rupee. We think that USD 1400 per ounce remains a strong resistance for gold. Hence we are recommending to sell it at any upside towards USD 1375-1385 per ounce. We expect gold to come back around USD 1320 per ounce or so. Once USD 1320 per ounce breaks then we can expect further downside.

In the Indian market, Rs 28,100-28,200 per 10gm is a selling level and we expect it to come back to Rs 27,500 per 10gm and maybe lower than that.

People will be looking at what Ben Bernanke says because although we do not expect them to say that this USD 85 billion bond buying will be stopped but they might put some kind of conditions on that. If there is any kind of condition then obviously there will be further pressure on bullion prices. So overall the prices will remain under pressure.

Similarly, for silver also we think that USD 22 per ounce is a resistance and we can sell there and we expect silver prices to fall back.

In rupee terms we expect silver prices to fall somewhere around Rs 42,500-42,800 per kilogram range. So we should sell both gold and silver on the uptick.

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Q: There seems to be reports that money is flowing back into crude now as an asset class, how would you trade that particular commodity and at what kind of targets?

A: We expect that the broader long-term range for nymex crude oil will be somewhere around USD 80-100 per barrel approximately. We are on the higher band on that technically. We expect that around USD 100 per barrel Nymex crude should get strong resistance .

Today the data will be out and we expect that inventories will be lesser, we cannot see some kind of uptick happening. But overall inventory levels are quite high and right now the tension in Syria is something which is driving the prices on the higher side. Economic outlook is changing drastically, where we see a lot of demand coming in. There is a lot of supply available and there is no such thing that Organization of Petroleum Exporting Countries (OPEC) will cut down on the production side as well.

So our idea is that for short-term we might see some uptick happening but we do expect that crude oil prices also will not be rising too much and we can sell them maybe at some uptick when we see today’s data and we expect that Nymex crude should come back to around USD 95-94 per barrel.

Bullion, base metals under pressure, sell on rally: Emkay

23 May

In an interview to CNBC-TV18, Ashok Mittal, CEO of Emkay Commodities shared outlook on commodities market.

Below is a verbatim transcript of the interview:

Q: How are you mapping commodities on a day like this when we have some poor Chinese data and generally the trend has been weakish?

A: The overall trend on the commodities market – whether it is bullion or base metals or energy products – remains quite under pressure.

On base metals, Chinese data is not very supportive and hence the outlook on the entire base metal pack, especially copper, looks little negative. We think that the prices will remain under pressure on the international markets as well as on the Indian market.

The only difference, which is applicable to all commodities whether bullions or base metals etc is the depreciation of rupee. While the international markets remain under pressure and we expect the prices to remain lower for most of the commodities – the fall in India on Indian rupee terms might be comparatively lesser because of the depreciation of the rupee. Whether it is gold, silver or base metals, the advise for investors is that they should look to sell on uptick.

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Q: Give us a word on what is happening with crude as well that is beginning to blink?

A: In crude, for a long-term perspective we had been saying that we expect the range to be between USD 80 per barrel to USD 100 per barrel. Inventory levels, which came yesterday, are quite good for gasoline as well as crude oil. The expectation in terms of demand increasing is comparatively much lesser.

We expect that crude prices will remain under pressure. In short-term, we expect them to go closer to USD 91-92 per barrel and we expect it should not go above USD 97 per barrel.

On Indian market, we are suggesting to sell crude somewhere around Rs 5,300-5,320 keeping USD 1 per barrel stop loss. We expect USD 2-3 per barrel downside. That means we might see levels of around Rs 5,200 per barrel or lower.

Another very interesting analysis that we have seen on the difference between Brent crude oil and Nymex crude oil is that gas, which used to be around USD 18-20 per barrel has shrunk to around USD 8 per barrel or so. So, we expect that while there will be a lot of pressure on the overall crude oil prices, Nymex crude oil will remain more under pressure because of the factor that the supply is more on that side whereas the Brent will remain not that much under pressure. So the gap between these two will increase further to USD 12-13 per barrel. So this will be a good trade for traders to do. They can buy Brent crude oil and sell Nymex crude oil.

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