Gold Prices ends Higher on Technical Buying,Crude prices robust sentiment

Gold price rose almost 1% $ to close at $961.5,supported as the dollar fell against Euro as better than expected durable goods order and Jobless claims boosted risk appetite.Moreover inflation concerns also stirred buying into Metals , Fund buying arrive after Gold Futures rose above $ 955 ,as rally in euros and technical buying also supported Metals futures. Crude prices too supported Yellow metals as crude futures prices rose above $64 per Barrel as OPEC Kept its output Unchanged.

* Comex Gold market open interest Up 1,341 lots at 398,306 Lots as of May 27, Indicating investment buying by Funds and Official Institution House.

* Gold/Oil ratio at 14.81 , lower than the 15.02 of the previous Trading session.

Silver soars to 15.35 after adding 2% close to $15.6 yesterday. The white metal continued to be the out performer in the precious metal .

Crude oil prices advanced across the energy complex taking the leading role. Crude Oil July surged to 2.6% close at 65.08(day High 65.44) OPEC announced to keep Output unchanged its production, while these were widely expected , as Saudi Oil minister commented that Oil price is capable to achieve $75- 80 bbl Mark boost market Sentiment However, better than expected economic indicators and rally in stock Markets were the Main driver to push crude oil prices above $65

We expect today’s Precious Metals will be Trading higher level ,As we said On gold above $965 it can breached $980 levels easily. Silver see good rally which could be better than in Yellow Metals. We expect silver to trade at $15.35 – 15.75 levels.
As past Trading sessions we have seen crude oil prices soars to $65 Per Barrel, well crude oil prices still has momentum level were it can breached in next trading session .it could be in range of $62 – 67$ near term expect to breached $70 bbl Mark

'Price Is Good, Market Is Good' – Crude oil surge on Saudi Arabia comments.

As expected,Y'day crude prices traded above $62.while OPEC decided to keep production unchanged again at the meeting today. The decision was made based on the organization's expectation that global oil demand will recover towards the end of the year and According to Saudi's oil minister, 'market is in good shape' and 'prices are good'.

As Saudi Arabia oil minister commented that global economy is coping with Oil price -75-80 bbl .However the comment disagreed by the IEA which said that oil price would be underpinned to economic recovery.

US' existing home sales surprisingly rose +2.85% mom to 4.68M units in April, compared with market expectation of +1.8% and -3% a month ago

Gold price trades lower at 948 in Asian morning after closing flat in the previous day while silver gained 1.8% to settle at 14.87. Marc Faber Doom boom.com Author said that he's sure the US will go into hyperinflation as 'the problem with government debt growing so much is that when the time will come and the Fed should increase interest rates, they will be very reluctant to do so and so inflation will start to accelerate'. He suggested buying as an inflation hedge, 'if you bought it in 1980 at the price of $850, then it hasn't been a good hedge against inflation, but if you bought it in 1999 at $251, then it has done very well'.

(Reuters) - High levels of scrap copper imports by Chinese traders are not a sign of healthy consumption and might present risks if global demand continues to be hit by the financial crisis, an industry analyst said on Wednesday

Over 80 percent of scrap copper imported by china is used to produced cables and wires according to cables and wires association 20 percent of manufacturing capacity has been idled.

This means that traders are now the ones buying the scrap copper of grades one and two as a hedge of their funds, so the copper is not really going to the manufactures,"
If economic crisis continues and demand will not pick up , the prices of copper will drop , therefore I don’t think hedging in copper now will be good at these levels.

Trading level for the day , I expect crude too trade in following range
$62.75 – 65$ as far near term crude oil prices May touch $67 level ,
As for Gold futures trading at higher level would be in range of $948- $962 above $965 we can expect gold to touch $980 level., but demand and Equities factors will be dropped prices.

India sugar futures likely down; expiry pressure

Singapore - India sugar futures likely to open down on unwinding of positions ahead of expiry, weak local demand. "Traders are likely to sell their positions in June contract as the exchange will reduce the position limits from tomorrow,"

says Kapil Gandhi, analyst with STCI Commodities

. Position limit for clients in near-month contract will be 6,000 tons vs 7,500 tons. Gandhi expects June contract on NCDEX to trade in INR2,320-INR2,360/100 kg. It last ended down 1% at INR2,349.

Published on 2009-05-20 09:30:28

http://www.moneycontrol.com/commodity/comm_news.php?autono=97779&type=MKT

India sugar futures flat on lack of fresh cues

Singapore - India June NCDEX sugar contract little changed at INR2,312/100 kg on lack of fresh cues; but outlook weak on fears of higher imports, rise in production due to timely arrival of monsoon. "Supplies are now enough to meet the local demand," says Kapil Gandhi, broker with STCI Commodities; expects contract to trade INR2,300-INR2,330.

Article Published on Money Control and commodities Control via.DJ source
Published on 2009-05-26 14:11:45

http://www.moneycontrol.com/commodity/comm_news.php?autono=98237&type=MKT

Improved Confidence Boosted Commodities and ETF Unchanged

*Latest N.Korea missile launch fails to budge gold
* Eyes on GM's fate, due to its impact on equities
* SPDR gold ETF holdings unchanged
* Precious Gold inches down below $950,Crude Oil prices surged above $62

Gold slipped below $950 on Wednesday as firm stock markets continued to dull some of bullion's sheen, although traders were keeping a cautious eye on the fate of General Motors Corp, for its impact on equities.

Bullion was trading largely within Wednesday's ranges, when a stronger dollar and a rally on Wall Street -- which both benefited from a jump in U.S. consumer confidence -- spurred selling of gold
The news, coming on the heels of the North's first nuclear test since 2006 earlier this week, failed to support gold despite the precious metal's traditional appeal in times of geopolitical tension.

“I think many see this as having limited regional impact, and hasn’t affected gold “

“Keeping eye on Markets which is hovering around the current level its waiting to see how the GM story unfolds”

The first notable rise in ETFs in recent months reported recently was seen as indicating a return in investment interest. , world largest Gold Exchange traded fund, SPDR Gold trust said Holdings stood at 1,118.76 tonnes as of May 26, Unchanged from the previous Trading day.

Crude oil price surged 1.3% to close at 62.45 Tuesday (currently trading at 62.5) as the US released strong consumer confidence index in May. The better-than-expected data also spurred rallies in base metals and stocks. Led by 4.8% increase in nickel price, the base metal complex surged with the exception of zinc price.

As there's not much industry-specific data for the energy market until tomorrow, oil price has been driven by sentiment and equity markets these few days

Concerning fundamentals, there's not much news pushing oil price to the current level. While the OPEC will likely keep production quota unchanged despite abundant inventory and weak demand.

Trading level for the day we expect gold would be in range of $955- $942
crude oil prices would be trading above $62 could see momentum at $64.65 trading day .

Rising Stocks, High Prices Dent Gold Demand in India

MUMBAI -- The rally in Indian stock prices since early March has spooked investment interest in gold in the world's largest market for the yellow metal.

With equity markets poised to rise further following the re-election of the Congress party-led government, the possibility of a pickup in investment interest in gold now looks remote, analysts say.

World Gold Council data showed investment demand in gold fell during the January-March quarter for the first time since it began compiling the numbers.

"As long as we can see gains in equity market, there would be asset reallocation," said Debjyoti Chatterjee, associate vice president of Admisi Commodities. "Funds will try to shift out of commodities - primarily gold - and move to equities."

India's benchmark Sensex, currently around 13,800, has advanced nearly 70% from its 2009 low of 8,160.40 on March 9, outperforming most global indices.

During the same period, high prices combined with low demand, both from investors and jewelry makers, flattened Indian gold imports to nearly zero in February and March.

Imports picked up briefly in April, but demand has again plummeted in May.

Suresh Hundia, president of the Bombay Bullion Association, said only 8-10 tons of gold have been imported so far this month. Last May, the country imported 29 tons of gold, according to the trade body.

"At this moment there is not much demand for gold," he said, adding that demand would improve only if prices fell.

Jewelry demand during the January-March quarter was the lowest in 20 years at 34.7 tons, while retail investment demand turned negative for the first time, falling by 17 tons, according to data released by the World Gold Council Wednesday.

"The trend will continue. There has been not much investment demand in the last four-five months, while jewelry off-take has been slow," said Daman Prakash, a director with bullion trading firm, MNC Bullion Pvt Ltd.

Investment demand accounted for 29% of India's total demand of 660.2 tons in 2008, according to the World Gold Council.

Unlike in the West, there were no major economic triggers in India in the last few months to prompt investors to rush to gold for safe haven buying, Mr. Prakash said.

"India is relatively better off than other world economies and investors are not in a hurry to go in for gold investments," he said.

The Indian rupee is expected to remain strong for the next couple of weeks, making local gold cheaper, but industry officials expect investment interest to remain lackluster during the April-June quarter.

The Indian rupee has appreciated about 7% against the U.S. dollar since April.

"As the equity market is going up, people seem to be shifting there (from gold)," said Kapil Gandhi, a broker with STCI Commodities.

A clear win by the Congress Party-led United Progressive Alliance has improved market sentiment and may help Indian stocks and rupee gain further on improved foreign investor sentiment, traders said.

The bullishness in the stock market and a stronger rupee are expected to weigh on domestic prices of gold, but industry officials doubt if that will be enough to lure buyers back.

The rupee's gain, in part fueled by domestic factors such as increased political stability, has also been a result of the recent weakness of the U.S dollar, which in turn has been pushing gold higher in the international market.

"Gold prices may come down to 13,800 rupees ($292)/10 grams in June if the rupee appreciates to 45 rupees to 46 rupees level," said Gandhi of STCI Commodities. At 0500 GMT, the rupee was trading around 47.13 to a dollar.

However, higher international prices will limit the benefits of a rising rupee, putting a floor below domestic prices.

Moreover, even if domestic prices fall, consumers will be cautious until "prices stabilize. Otherwise, they feel it is going to fall further," said Rajiv Popley, director of Popley Group, a large retail jewelry chain in the country.

Once domestic prices stabilize at a lower level, one can look forward to normal demand as the wedding season gets closer, he added.

"Customers are currently in a wait-and-watch mode (because) they have seen lower prices than these," said Mr. Prakash.


View on WallStreet Journal date 22nd May,2009 link as follow.

http://online.wsj.com/article/SB124297429601246675.html

Commodity Prices Trade Sideways On US and UK Holidays

Focus of the week is OPEC's meeting in Vienna on May 28. Over the weekend, Saudi Arabia Oil Minister Ali al- Naimi said that the organization will likely 'stay the course' at this meeting. When commenting about OPEC's compliance, Naimi said he's fine with the current level. Libya, another OPEC member said there's still 50% for a production cut in May.

We think it's unlikely for the OPEC to another a further output reduction at the upcoming meeting as oil price has stabilized since the previous meeting in March. In fact, oil price has risen almost 30% since then and is still trading with upside momentum. OPEC will probably find it less motivated to implement further cut at the moment particularly when some members still have rooms to improve their compliance while economies of some member countries rely heavily on oil exports. Last month, both Algeria and Qatar said that they can tolerate a price of 50/bbl, lowered from the previous informal target of 70/bbl.

Crude oil price trades narrowly around 61/62 in Asian morning as investors await more important data to be released later this week. Trading is expected to be light throughout the day due to holidays in the UK and the US

Gold price retreats after rising to 2-month high at 964.6 Friday as USD rebounds against the euro and other major currencies after the sharp fall last week. However, weakness in USD should help resume recent rally after consolidation.

The previous day gold Price was set in London at $959.75 per ounce inclining from $952.50 per ounce during the AM fixing. Also, SPDR gold trust, the world's largest exchange-traded fund backed by bullion, rose to 1,118.76 metric tons on May 22

Spot gold is now traded at $953.05 from Friday's closing of $957.50 despite North Korea's nuclear test conducted on Monday which enhanced demand on safe-haven assets such as yen and dollar. However, gold market ignored the news as the metal is overbought which induced some investors to take short positions taking advantage of the high price reached. Today is a public holiday in the U.S. and U.K. which is also lowering the volume in markets.