BULLION: BROKERAGE REPORT

Bullion counter may extend its upside momentum amid ongoing tensions between Russia and Ukraine, which resulted in safe haven buying.

Escalating tension in Ukraine will remain in focus for the bullion investors in the near term. Global ETF demand along with strong Chinese demand is also lifting the prices. Gold advanced 14% this year on demand for a safe haven as turmoil in Ukraine hurt emerging market assets already weakened by cuts to U.S. stimulus, while growth slowed in China, the largest consumer. Recently, President Barack Obama and Chancellor Angela Merkel have warned the ballot has no international legitimacy. Gold may move in the range of 30000-31200 in MCX while white metal silver can hover in the range of 45500-49500. 

The gold/silver ratio has moved up from 60 to 64.5 which showed that gold outperformed Silver recently. This ratio can hover in the range of 62-66 in the near term. Holdings in the SPDR Gold Trust increased to 813.3 metric tonnes yesterday the most since Dec. 20. 

The yellow metal rebounded this year, even as the U.S. Federal Reserve, which next meets March 18-19, announced reductions of bond buying in each of its past two meetings. Last year, COMEX gold slumped by 28 percent, the most since 1981, amid a U.S. equity rally to a record, muted inflation and speculation that the Federal Reserve would taper monetary stimulus. Meanwhile, physical buying, particularly out of Asia, has been subdued at best for the past few weeks.

WINNING STROKES: THINK DIFFERENT

In the morning inputs to the Paid Group, it was mentioned that if the Nifty_Spot can hold above 6220 on the upside, then  it might manage to cross 6240 during the days. The Nifty rose to 6245.95 intra-day, before closing at 6238.80 with a gain of 38.75 points. Also, the stock from the automobile sector which was recommended yesterday night, hit the buyer freeze today at Rs.58.40. The  name of the scrip will be disclosed tomorrow evening. Today, I could recommend another stock from the small cap space to the Paid Group members and to those who are trading through my recommended brokerage houses. In these kinds of markets the best strategy is to buy and keep holding, the profits are expected to come, if your choice of stocks are right, be it Manappuram Finance Ltd (Rs.22.85, recommended at Rs.18 and Rs.15) or BF Utilites Ltd (Rs.543.30, recommended at Rs.129) or MCX Ltd (Rs.524, recommended at Rs.264). 

BHEL recommended around Rs.148-149, today touched the 2nd target of Rs.162, as it hit an intra-day high of Rs.162.50. The closed at Rs.162.05 with a gain of 1.63%. You can either stay put in the stock with a SL of Rs.157 or put the same money in HINDALCO Industries Ltd at Rs.98.35. There were some reports that probably, the inter-ministerial group has cleared Mahan coal block in Madhya Pradesh, jointly held by the company, Essar Power, and DB Power, to be retained by the companies on having secured forest clearance. The immediate target is Rs.107. The SL is now Rs.97--you can take a risk of Rs.2 on closing basis and invest in the scrip. 

There is no stopping of P C Jeweler Ltd, which touched the 6th target today at Rs.103 and is  now moving towards the 7th target of Rs.109, if it is able to clear the stiff resistance zone of Rs.104-105. The scrip today closed at Rs.103.45, with a gain of 2.32%. Shree Ganesh Jewelry House (I) Ltd which was strongly recommended today to the Paid Group members, closed with a gain of 1.66% at Rs.27 .55. 

Tulip Telecom Ltd after it was recommended on Monday, hit another buyer freeze at Rs.4.09. The company is likely to be taken over by a turnover expert. Also, Entegra Ltd which repeatedly recommended here in this blog today closed at Rs.4.12. This stock will also double your returns in the next few weeks time frame. Even if you have not bought the scrip, please buy it and keep holding. 

Meanwhile both Allied Digital Services Ltd (Rs.13.77) and Glodyne Technoserve Ltd (Rs.7) closed with gains on the bourses today.  

Gold curbs to arrest CAD hit West Bengal’s artisans hard 

[Editor: As expected the poor artisans of this sector are  hit the  most, especially at  a time when the inflation is too high and the unemployment rate is increasing. P Chidambarams' draconian methods, will now perhaps completely destroy the Gems and Jewellery sector, like many others like, Infrastructure, Power, Real Estate, Automobile, Ceramics, etc. etc. The general elections are very near, and the affected people might show their anger in the ballot box]

KOLKATA: With elections round the corner, the Mamata Banerjee government is perturbed over artisans in gold trade losing jobs as there is hardly any work with jewellers due to supply crunch of the yellow metal. 

The state supplies the best artisans in jewellery trade and nearly 1 crore people from the state are engaged in the trade. 

Talking to ET, the state labour minister Purnendu Basu said, "If things take a turn for the worse, then we will try to find schemes where these artisans can be absorbed. It is a matter of great concern for us. Let's see what steps the Central government takes on gold. We will also talk to the state's jewellery trade to find out a way. We cannot allow artisans to remain jobless." 

The jewellery trade employs nearly 3.5 crore ar artisans. Among them artisans from Bengal are famous for the  their handmade jewellery, which are sold at a premium. 

Nemichand Bamalwa, member, All Indian Gem & Jewellery Trade Federation said "Nearly 15 -20 lakh artisans from Bengal are jobless right now. If this situation continues for another two to three months then they will be forced to leave the profession and look for some other profession. But that too will be difficult for them.

As of now there is hardly any demand in gold and whatever minimum work is taking place is in the recycled categories where families are redesigning their old gold to meet immediate requirements." But there seems to be no respite for the gold trade immediately. 

According to agency reports, revenue secretary Sumit Bose has said that review of gold curbs will take place by the end of March. India used to be the world's biggest importer of gold until 2012. But the swollen CAD forced the government to increase import duty on gold from 2% to 10% and rule. 

"We are more concerned about the 80:20 rule that has resulted in increased smuggling of gold through the NRI route. This rule should be removed immediately if the sector has to survive. Otherwise many will lose their living," added Bamalwa. 

On July 22 last year, the Reserve Bank of India had said that a fifth of the gold purchases by importers in every lot would have to be exclusively made available to exporters. It said only 80% of the imports could be used for domestic purposes, and that too for entities engaged in jewellery trade, bullion dealers and banks. 

In fact, Congress president and UPA chairperson Sonia Gandhi has written a letter to the commerce ministry to look into the matter following a meet with the All India Gem & Jewellery Trade Federation. Commenting on the outlook for gold, Sugandha Sachdeva, AVP (metals, energy and currency research), Religare Securities said "At MCX, Rs 29,650/10gm and Rs 29,900/10gm remain immediate supply zones, above which prices may soar towards Rs 30,500/10gm in near term. On the flip side, in case prices fail to breach the said levels, they can testRs 28,850-28,800/10gm on the lower side. 

Courtesy: The Economic Times

Gold to remain buoyant for short term on robust Chinese buying

FOMC meeting in the US and monetary policy by the RBI to determine its long term sustenance

Mumbai  January 25, 2014: Gold prices rose 6 per cent so far this month due to re-emergence of safe haven demand from risk appetite countries including China where consumers parked their large quantum of disposable income ahead of Lunar holiday. Going forward, however, gold price is likely to remain elevated at least until the shadow on economic policy gets cleared in the scheduled meeting of the Federal Open Market Committee (FOMC) on January 28 and 29; and monetary policy announcement by the Reserve Bank of India (RBI) next week.

During the period between January 1 and 25, gold recorded a sharp jump of around 6 per cent from $1,200 an oz to $1271.16 an oz in London spot market. During the same period, the yellow metal settled at Rs 30,200 per 10 grams from the level of Rs 29134 per 10 grams on January 1, a rise of 3.67 per cent. While the rupee recorded a depreciation of 1.44 per cent during the same period from the level of 61.80 to 62.69 against the dollar, the bullion in local currency term recorded a modest rise compared to that in dollar term.

“This is because of a drastic decline in the premium in India which witnessed a sharp fall from around $150 an oz on January 1 to $117 an oz on Saturday, said a leading bullion dealer in Zaveri Bazaar, India’s largest spot market for precious metals.

Meanwhile, t wo Russian gold miners - Petropavlovsk and Nord Gold - plan to cut production in 2014 as they focus on cost reduction after a slump in the gold price. Petropavlovsk expects its 2014 gold production to decline 16 percent year-on-year to 625,000 troy ounces after it sold high-cost alluvial assets.

A number of gold producers was hit badly by a 28 per cent fall in the price of gold last year - its biggest annual loss in 32 years - prompting miners to cut costs, delay new projects and hedge, selling their production forward.

Miners have set the benchmark cost of production at $1200 an oz which if gold breaches downwards then they will have no option but to cut production.

“Gold price remained high despite low investment demand due to robust Chinese buying. Also, global slide in equities followed by easing dollar index helped investors to seek a safe haven buying in gold which kept the price of the yellow metal up,” said Sugandha Sachdeva, Incharge (metals, energy & currency) Research, Religare Securities Ltd.

Breaching the level of $1287 however will see the price hitting $1325 an oz in international market translating thereby in India at Rs 30500 – 30600 per 10 grams level in futures market on the Multi Commodity Exchange.

The bullion, however, will see a strong resistance at $1275 an oz in international market and Rs 29600 per 10 grams on the MCX, she added.

Meanwhile, a recent report by the global consultancy Thomson Reuters GFMS forecast, gold price to breach $1330 an oz level this quarter.

Courtesy: The Business Standard

Gold futures likely to gain past one-month high

[Editor: India’s central bank, Reserve Bank of India (RBI), earlier partially eased restrictions on import of gold doré bar (semi pure alloy of gold and silver) by allowing refineries to import 15 % of their gross annual requirement in first two months and remaining as per export performance. “Subsequent to this, the quantum of gold doré to be imported should be determined lot-wise on the basis of export performance,” the country’s central bank noted. January has traditionally been a good month for precious metals, at least for the past three years and with this move the chief exporters of Gold Jewelries like Shree Ganesh Jewellery House (I) Ltd (SGJHIL) would be benefited the most. According to my sources, the company has made elaborate plans to boost exports, and giving less focus on the retail and other businesses. It would also benefit from the RBI's recent decision to allow Gold-loan-companies, to give higher amount of loan against gold jewellery pledged by borrowers. NBFCs can now give up to 75%, up from 60% now, of the value of the gold jewellery pledged as loan. SGJHIL is now trading at Rs.26.70]

MUMBAI Mon Jan 20, 2014 4:Gold futures in India are likely to extend gains past their highest level in a month, on the back of positive leads from overseas market, although investors will continue to monitor the rupee for directions.

The actively traded gold contract for December delivery on the Multi Commodity Exchange (MCX) was 0.22 percent higher at 29,330 rupees per 10 grams, after hitting a high of 29,390 rupees, a level last seen on December 16.

"Gold and silver looks good in the short-term on the back of Chinese buying for Lunar New year and commodity index rebalancing in favour of gold and silver," said Gnanasekar Thiagarajan, director with Commtrendz Research.

Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 7.49 tonnes to 797.05 tonnes on Friday - the first increase in a month.

Buying is advised in MCX gold on dips to 29,250 rupees, for a target of 29,600 rupees, with a stop loss at 29,025 rupees, said Thiagarajan.

Silver contract for April delivery on the MCX was 0.04 percent higher at 45,156 rupees per kg.

Buying is advised on dips in silver at 44,900, with a stop loss at 44,500, targeting 45,800 rupees, said Thiagarajan.

(Reporting by Siddesh Mayenkar; Editing by Anand Basu)

Courtesy: Reuters

Market Mantra

Punj Lloyd Ltd which was recommended yesterday, at around Rs.25, for a target of Rs.27, is now trading at Rs.28.25. Those who have invested in the scrip can book some profits and invest the same in ARSS Infrastructure Projects Ltd (BSE Code: 533163) at Rs.20, for a target of Rs.25. The stock exchanges have unnecessarily put the stock in the restricted category, when there is neither volume or movement in the counter. The government of India should remove all the inefficient people managing the exchanges. It is because of these people the scams  involving Financial Technologies, NSEL and MCX Ltd takes place. What is the need to put a stock in the T-group or make the circuit as low as 5%, when there is hardly any trading in the counter? Are the authorities insane... or blind? CLICK HERE.
The Gold Loan Companies like Manappuram Finance Ltd (Rs.15.70) and Muthoot Finance Ltd (Rs.99.60) should move up at a top speed as the companies are set to get double benefits: (i) The MSF rates has been cut (CLICK HERE), which will make the cost of funds less and (ii) The gold prices have been steady since the last couple of months and has never fallen below, 20% from the peak price. If you can remember, the LTV of the gold loan companies is only 60%. So, this will make the loans not only secure but also, give confidence to the minds of the investors. Also, since the price of the gold has steadily increased from Rs.25, 000 per 10 gm to around Rs.29, 000 plus a gram, the value of the assets of the company (gold) will also increase. Therefore, just wait for a blast to happen in the counter of the Manappuram Finance Ltd.
Geodesic Ltd (Rs.5.02) and Glodyne Tech Ltd (Rs.8.97) have also hit their respective buyer freezes. It does not make any sense, to keep the circuit as low as 5% per day, when there is no such restrictions in the F&O segment. It is because all of all these highhandedness, that we do not find any uniformity in the market--some stocks go on rising, more than 25% in a day, while in case of others their movements are restricted, to sometimes even less than 2%. This is a weird concept, which the government needs to think about seriously. The government of India should revamp the management of the stock exchanges if its want to bring the retail investors back in the stock markets. This (Retail Investor) community has gone extinct due to mistreatment given both by the brokers and the stock exchanges. 

Gold prices rebound; jewellers stocking up for festivals

Thu Oct 3, 2013: Gold futures rebounded on Thursday from their lowest level in two weeks, tracking gains in overseas prices, though a strong rupee limited the upside.

* Despite the price rise, demand improved slightly as jewellers were seen placing orders for the peak festive season.

* At 2:57 p.m., the benchmark October gold contract the Multi Commodity Exchange (MCX) was 1.21 percent higher at 29,886 rupees per 10 grams. It hit a low of 29,352 rupees on Tuesday, a level last seen on September 18.

* "Some jewellers are placing orders as they have very thin inventory. They want supplies for Dussehra and Diwali," said a dealer with a private importing bank in Mumbai.

* India will celebrate the Hindu festivals of Dussehra in the third week of October and Diwali in the first week of November, a period when buying gold is considered auspicious.

* Some banks, which are primary dealers of bullion, re-started imports after the customs department gave its approval to some lots.

* Imports had virtually stopped after the so-called 80/20 principle, which tied exports with domestic consumption, creating confusion among government officials, and prompting the commerce ministry to call a meeting to break the deadlock.

* Overseas, gold held onto sharp overnight gains in Asian trading on Thursday as weak U.S. economic data and a partial government shutdown raised hopes that the Federal Reserve would stick to its bullion-friendly stimulus for longer.

* The rupee rose 1 percent on Thursday. A strong rupee makes gold imports cheaper.

* Indian markets were closed on Wednesday for a national holiday.

(Reporting by Rajendra Jadhav; Editing by Prateek Chatterjee)

Courtesy: Reuters

Gold Survey: Survey Participants See Higher Gold Prices Next Week

[Editor: Gold closed with a gain of 3.17% in the MCX Ltd, today!! Congratulations to all the Gold Bulls.

Special thanks to John Browne (Euro Pacific Capital Economic Consultant, US), Jim Rickards (Tangent Capital Partners Senior MD, US) and Peter David Schiff (CEO and chief global strategist of Euro Pacific Capital Inc, US).....!! I was very bullish on the GOLD, after reading lot of positive reports on the same and especially when it fell below Rs.30, 000 per 10 grams in Mumbai (Bombay). I had in this connection put a number of analysis on this blog, hope some of you have read the same].

Gold prices are forecast to rise next week, a majority of participants in the weekly Kitco News Gold Survey said.

In the Kitco News Gold Survey, out of 36 participants, 19 responded this week. Of those 19 participants, 11 see prices up, while four see prices down and four are neutral or see prices trading in a range. Market participants include bullion dealers, investment banks, futures traders, money managers and technical-chart analysts.

Last week, survey participants were nominally bullish. As of noon EDT Friday, prices were up about $8 on the week. As of Sept. 13, survey participants have been correct three of the past five weeks.

Sean Lusk, director commercial hedging division at Walsh Trading, said there are a few reasons why he sees prices rising. The split views of the varied Federal Reserve governors on monetary policy suggest that uncertainty remains, which “conveys to me traders will most likely have a bullish bias,” he said.

Gold could also find safe-haven demand if next week’s nonfarm payrolls report comes out disappointing; additionally, gold could find more safe-haven demand amid the fiscal brinkmanship going on in the U.S. Congress, he added.

Mark Leibovit, editor, VR Gold Letter, said he’s giving bulls the benefit of the doubt, but is watching technical charts closely. “Under $1,285-$1,300 the chances of seeing a retest of $1,180 or even lower prices becomes a possibility. Bearish sentiment is still high and the ‘fundamental’ case presented by most analysts is bearish. This makes me more bullish, because I believe their view of the fundamental case is incorrect. Gold is a currency and with world currencies all being devalued and the fact they are essentially nothing more (than) paper is enough of a reason to be accumulating gold and to remain constructive,” he said.

Those who see weaker prices said gold’s outlook remains soft. “I think gold will be lower next week,” said Kevin Grady, owner of Phoenix Futures and Options LLC. “Although gold may hold a bid as concerns persist about a resolution to the debt ceiling, I think some mines will take advantage of any rally to start hedging. Every recent rally has been met with very aggressive selling. The taper has been postponed but it still looms heavy on gold. Once this program begins and we see interest rates rising, we should be testing our recent lows of $1,182. The mines are starting to realize this. I will be watching the forwards market for the first signs of any major hedging.”

A few market participants said they expected gold prices to hold in the current range.

“Most markets this week are being held hostage by the budget/government funding battle and it is anyone’s guess as to the outcome,” said Frank Lesh, broker and futures analyst with FuturePath Trading. “Gold posted an inside week — within last week’s range — so no new price discovery to consider…. The fundamental factors remain the same, physical buying supports on the dips and ETF liquidation limits the highs. I still view gold as range bound and whichever way it runs, you just have to go for the ride. I remain neutral.”

Courtesy: Forbes

Gold price today: Latest updates

Thursday, September 26, 2013: Gold prices failed to extend yesterday's gains and moved lower by Rs 110 to Rs 30,105 per ten grams in futures trade early Thursday as rupee strengthened against the dollar at the Interbank Foreign Exchange market.

At the Multi Commodity Exchange (MCX), gold for delivery in October declined by Rs 110 to Rs 30,105 per ten grams as against its previous close of Rs 30,215 .

Similarly, silver benchmark delivery dropped by Rs 251 to Rs 48,920 per Kg.

Gold price in overseas markets, which normally set price trend on the domestic front, traded in a narrow range and largely held on to overnight gains of nearly 1 percent as an upcoming Chinese holiday kept investors on the sidelines and their focus turned towards the US debt ceiling talks. 

Spot gold last quoted at USD 1,333.80 an ounce, down 0.02 percent, after gaining 0.8 percent in the previous session. 

In New York, gold for December delivery rose USD 19.90 to settle at USD 1,336.20 an ounce on the Comex division of the NYMEX yesterday.

Meanwhile, snapping a four-day losing streak, both precious metals gold and silver rebounded in Delhi bullion market on emergence of buying at existing lower levels to meet the coming festive season demand amid a better global trend.

While gold gained Rs 320 to Rs 30,545 per ten gram after losing Rs 585 in last four sessions, silver recovered by Rs 390 to Rs 49,330 per kg, snapping Rs 2,260 losses of four days.

Mumbai

Standard gold of 99.5 percent purity moved up by Rs 160 to close at Rs 29,980 per 10 gm from Tuesday's closing level of Rs 29,820 .

Pure gold of 99.9 percent purity also gained by Rs 160 to end at Rs 30,130 per 10 gm from Rs 29,970.

Similarly, silver ready (.999 fineness) escalated by Rs 50 to finish at Rs 49,715 per kg as compared to Rs 49,765 yesterday.

Delhi

Gold of 99.9 and 99.5 percent purity rebounded by Rs 320 each to Rs 30,545 and Rs 30,345 per ten gram, respectively, while sovereign held steady at Rs 25,000 per piece of eight gram in limited deals.

Silver ready rose by Rs 390 to Rs 49,330 per kg and weekly-based delivery by Rs 690 to Rs 49,480 per kg. 

Silver coins, however, held steady at Rs 85,000 for buying and Rs 86,000 for selling of 100 pieces. 

Futures Trade (MCX)

At the Multi Commodity Exchange (MCX), gold for delivery in October declined by Rs 110 to Rs 30,105 per ten grams as against its previous close of Rs 30,215 .

Similarly, silver benchmark delivery dropped by Rs 251 to Rs 48,920 per Kg.

International markets

Spot gold last quoted at USD 1,333.80 an ounce, down 0.02 percent, after gaining 0.8 percent in the previous session. 

In New York, gold for December delivery rose USD 19.90 to settle at USD 1,336.20 an ounce on the Comex division of the NYMEX yesterday.

Gold ETF

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.07 percent, or 0.6 tonnes, to 909.59 tonnes on Monday. 

Here are the city wise gold and silver rates:

(Gold rates per 10 gm/Silver rates per Kg)

Mumbai

GOLD: 29,970 30,130 (+160) / SILVER: Rs 49,715 (+325) 50,040

Delhi

GOLD: Rs 30,545 (+320) / SILVER: Rs 49,330 (+90)

Chennai

GOLD: Rs 29,795 / SILVER: Rs 48,860

Kolkata

GOLD: Rs 30,570 / SILVER: Rs 48,900

Bangalore

GOLD: Rs 30,478/ SILVER: Rs 49,500

Hyderabad

GOLD: Rs 30,100 / SILVER: Rs 50,000

Courtesy: Zee News

Gold may gleam on wrangling over US borrowing limit

~M.R. SUBRAMANI

CHENNAI, SEPT 26:  Gold prices on the domestic spot and futures

markets are likely to gain on Thursday as US Congressmen wrangle over raising $16.7 trillion limit for government borrowing.

According to US Treasury Secretary Jack Lew, the US will exhaust its borrowing limit on October 17. One of the solutions being contemplated is tampering with the healthcare programme introduced in 2010.

Key US data

Key US data later in the day could be mixed with jobless claims rising and GDP being better than forecast. Pending home sales and Euro Zone M3 money supply are other factors holding the key.

Currency moves could have an impact as a strong rupee against the dollar makes import of gold, crude oil and vegetable oils cheaper.

Spot gold, gold futures

In early Asian trading, spot gold rose to $1,332.68 an ounce and gold futures maturing in December to $1,332.60.

In the domestic market on Wednesday, gold for jewellery (99.5 per cent purity) ended higher at Rs 29,980 and pure gold (99.9 per cent purity) to Rs 30,130. On MCX, gold October contracts could rise above Rs 30,000.

Crude oil

Crude oil prices may head lower after a report from the US showed rise in inventories due to lower demand.

Brent crude contracts maturing in November fell to $108.15 a barrel and West Texas Intermediate crude for the same month to $102.33.

With grain prices rising on supply concerns, the oils and oilseeds complex could trade sideways.

New export orders for US soyabean and mixed harvest reports are bullish factors, while Indian harvest and possibility of higher palm oil inventories are the bearish factors.

Soyabean, crude palm oil

Chicago Board of Trade soyabean contracts maturing in November ruled higher at $13.13 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing in December opened lower at 2,280 ringgit or $707 a tonne.

Wheat, corn prizes

Prices of wheat and corn (industrial maize) could head higher as China plans to increase the import to check the rising domestic prices and fears of frost in Argentina are causing concern over crop in the South American nation.

Wheat for delivery in December on CBOT rose to $6.71 a bushel. Corn, gaining in tandem with wheat, was up at $4.53 for contracts maturing in December.

Courtesy: The Hindu Business Line

 Gold likely to yo-yo on uncertainty over stimulus package

[Editor: There is no Uncertainty in the Stimulus Package, except the media generated Hoax. It is to be understood that hereto, Dr.Ben Bernanke and his deputies stressed that the US Fed might start tapering, once the data gives positive indication. So, there is no question of the US Fed removing QE in October, 2013, since the figures do suggest the same. Those who cannot read between the lines only can make such wild guesses, that the US Fed would start to limit its bond buying program from October, 2013. Moreover, Pharma (Opto Circuits Ltd, CMP: Rs.22.30) and IT companies are still looking good at this point of time, apart from Gold Loan Companies like Manappuram Finance Ltd (Rs.15.20)]

Photo: www.afaqs.com

Chennai, Sept 25:  Gold prices on the domestic spot and futures market are likely to trade sideways on Wednesday as uncertainty over end to the US stimulus programme continues to worry the market.

Agencies reported a key decision maker as saying that the US Federal Reserve will begin cutting its $85-billion-a-month stimulus package before the year-end.

Elsewhere, US consumer confidence dropped as also rise in US home prices slowing in July.

Durable goods, home sales data

Data on US durable goods orders and new home sales later in the day could shed some light on which way the economy is heading and probably, provide some direction to the yellow metal.

Kharif crop forecast

The Indian Farm Ministry has said that the kharif or summer crop this year will be the highest over the last five years.

It remains to be seen see how the rural population reacts to a higher income, coming in at least from higher support price for foodgrains and major oilseeds. Most probably, this factor could cushion any steep fall in gold, for now.

Spot gold, gold futures

In early Asian trading, spot gold ruled at $1,324.74 an ounce and gold futures maturing in December at $1,324.90.

In the domestic market on Wednesday, gold for jewellery (99.5 per cent purity) edged marginally up at Rs 29,820 for 10 gm and pure gold (99.9 per cent purity) to Rs 29,970.

On MCX, October gold contracts could rule between Rs 29,500 and Rs 30,000.

Rupee Vs dollar

In the Indian context, the rupee’s movement against the dollar could also have a role to play since a stronger Indian currency makes the import of gold, crude oil and vegetable oils costlier.

Having dropped over the last four sessions, crude oil could edge higher on Wednesday, especially on speculation that US crude stockpiles could have dropped. Data on the stocks are expected later in the day.

Crude oil prices

Brent crude contract maturing in November was up at $108.78 a barrel and West Texas Intermediate for the same month at $103.27.

The oils and oilseeds complex is likely to head north on threat of frost in the US Midwest region besides bets that rains in that region are not enough to boost the crop. A rise on soyameal prices, too, could help the complex scale up.

Soyabean, crude palm oil

Chicago Board of Trade soyabean November contracts rose to $13.18 a bushel. Crude palm oil December contracts on Bursa Malaysia Derivatives Exchange opened higher at 2,310 ringgit or $716.50 a tonne.

Wheat, corn prices

With wheat prices rising above the 50-day moving average, technically they are likely to rise. Fundamentally, China has increased its import of US wheat and inspections for its exports are also higher.

On the other hand, Argentina, going through a dry period, could see frost in the main-growing area, threatening the standing crop further.

Corn (industrial maize), on the other hand, could drop as a higher harvest looms.

CBOT wheat for delivery in December rose to $6.59 a bushel and corn for delivery the same month to $4.49 a bushel.

Courtesy: The Hindu Business Line

Gold price today: Latest updates

Extending their early losses, gold prices dropped by Rs 230 to Rs 29,644 per ten grams in futures trade Tuesday as market participants offloaded their positions in tandem with a weakening trend overseas.

At the Multi Commodity Exchange (MCX), gold for delivery in October fell by Rs 230 to Rs 29,644 per ten grams as against its previous close of Rs 29,874.

Similarly, silver benchmark delivery moved lower by Rs 753 to Rs 48,640 per Kg.

Gold price in overseas markets, which normally set price trend on the domestic front, failed to hold early gains and moved southwards on renewed worries that the US Federal Reserve will begin cutting its bond-buying purchases as early as next month.

Spot gold last quoted at USD 1,326.36 an ounce, up 0.4 percent, after falling over 3 percent over the past three sessions.

In New York, gold for December delivery fell by USD 5.50 to USD 1,327 an ounce on the Comex division of the NYMEX.

Meanwhile, both gold and silver fell for the third straight session in Delhi bullion market on lower demand against sustained selling in line with a weak global trend.

While gold fell by Rs 250 to Rs 30,250 per ten grams, silver lost Rs 475 to Rs 49,025 per kg on reduced offtake by jewellers and industrial units.

Mumbai

Standard gold of 99.5 percent purity slid by Rs 210 to end at Rs 29,790 per 10 gm from last Saturday's closing level of Rs 30,000.

Pure gold of 99.9 percent purity also dipped by a similar margin to close at Rs 29,935 per 10 gm from Rs 30,145.

Silver ready (.999 fineness) slumped by Rs 510 to conclude at Rs 49,765 per kg as against Rs 50,275 last weekend.

Delhi

Gold of 99.9 and 99.5 percent purity fell further by Rs 250 each to Rs 30,250 and Rs 30,050 per ten grams, respectively. The yellow metal had lost Rs 310 in the previous two sessions. Sovereign shed Rs 100 to Rs 25,000 per piece of eight gram.

Silver ready dropped by Rs 475 to Rs 49,025 per kg and weekly-based delivery by Rs 575 to Rs 48,925 per kg. The white metal had lost Rs 1,700 in last two sessions.

Silver coins, however, held steady at Rs 85,000 for buying and Rs 86,000 for selling of 100 pieces in limited deals.

Futures Trade (MCX)

At the Multi Commodity Exchange (MCX), gold for delivery in October fell by Rs 230 to Rs 29,644 per ten grams as against its previous close of Rs 29,874.

Similarly, silver benchmark delivery moved lower by Rs 753 to Rs 48,640 per Kg.

International markets

Spot gold last quoted at USD 1,317.20 an ounce, down USD 6.10 or 0.46 percent, after falling over 3 percent in last three sessions.

In New York, gold for December delivery fell by USD 5.50 to USD 1,327 an ounce on the Comex division of the NYMEX yesterday.

Gold ETF

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.07 percent, or 0.6 tonnes, to 909.59 tonnes on Monday.

Here are the city wise gold and silver rates:

(Gold rates per 10 gm/Silver rates per Kg)

Mumbai
GOLD: 29,935 (-210) / SILVER: Rs 49,765 (-510)

Delhi

GOLD: Rs 30,250 (-250) / SILVER: Rs 49,025 (-475)

Chennai

GOLD: Rs 30,415 / SILVER: Rs 49,000

Kolkata
GOLD: Rs 30,610 / SILVER: Rs 49,500

Bangalore

GOLD: Rs 30,315/ SILVER: Rs 49,500

Hyderabad

GOLD: Rs 30,100 / SILVER: Rs 50,500

Courtesy: Zee Business

Physical buying may help gold edge up

Indian imports, affected by a July 22 RBI notification stipulating that at least 20 per cent of the yellow metal brought into the country should be re-exported, are likely to resume anytime now.

HENNAI, SEPT 24:  Gold prices on the domestic spot and futures market are likely to look up a little on hopes that buying in China and India may increase. However, uncertainty over the US Federal Reserve’s move on the $85-billion-a-month stimulus package is proving to be a market dampener.

Indian imports, affected by a July 22 RBI notification stipulating that at least 20 per cent of the yellow metal brought into the country should be re-exported, are likely to resume anytime now. With kharif harvest beginning and festivals ahead, rural consumers could begin buying gold.

On the other hand, buying in China is seen up ahead of holidays starting October 1. Gold purchases in Shanghai exchange increased on Monday.

But holdings of gold in electronic form in exchange-traded funds dropped. On Monday, SPDR Trust, world’s largest gold exchange traded fund, reported that its holdings dropped below 910 tonnes to 909.59 tonnes.

Data on Germany business climate, US Consumer confidence, US chain store sales and housing index could have some influence on the precious metals market later in the day. In India, any rise in the rupee’s value against the dollar will make imports of gold, crude oil and vegetable oils cheaper.

Spot gold, gold futures

In early Asian trade, spot gold rose to $1,326.63 an ounce and gold futures maturing in December at $1,326.60.

In Mumbai bullion market, gold for jewellery (99.5% purity) dropped to Rs 29,790 and pure gold (99.9% purity) to Rs 29,935.

On MCX, gold October contracts could try to scale back to Rs 30,000.

Crude Oil

Crude oil is likely to rule flat as production is rising in Nigeria and Libya. Besides, speculation that the UN could pass a resolution that will ensure that there will be no military attack by the US on Syria. This will safeguard crude oil supplies from the West Asian region.

Brent crude contracts maturing in November ruled at $108.46 a barrel and West Texas Intermediate crude for delivery the same month at $103.42.

Oils and Oilseeds

The oils and oilseeds complex could gain on bargain hunting after prices slipped last week. Besides, demand for US bean and drop in inventories could hold up the counter.

Chicago Board of Trade soyabean contracts for delivery in November rose to $13.15 a bushel. On Bursa Malaysia Derivatives Exchange, crude palm oil contracts maturing in December opened higher at 2,324 ringgit or $724 a tonne.

Grains complex

Projections of higher imports by Chinese crop agency by at least one million tonnes are likely to drive wheat prices higher in the grains complex. This is despite higher bearish bets on the grain.

Rain in North America, threatening Canadian wheat, and dry weather in Australia and Argentina, which could affect the yield, are other bullish factors aiding wheat.

On the other hand, corn (industrial maize) is under pressure after exports from the US last week dropped to less than 18 million bushels against over 20 million bushels the previous week.

CBOT wheat contracts for delivery in December increased to $6.56 a bushel and corn for delivery the same month edged marginally up at $4.54 a bushel.

Natural rubber

Natural rubber prices on spot and futures markets could be under pressure as crude prices head lower. Fears of higher imports by the user industry are also dragging the counter.

On the Tokyo Commodity Exchange, rubber to be delivered in February slipped to 277.3 yen or Rs 176 a kg.

(This article was published on September 24, 2013)

Courtesy: The Hindu Business Line

PIMCO makes bullish gold bets after Fed, sees bottom on prices

[Editor: The SEBI is over-regulating the market in places where it is not required, like unnecessarily putting stocks in the T-group and at the same time creating such illogical circuit limits as 2% and 5%. It is inactive in places where it should be or else recent sordid affairs regarding MCX Ltd and Financial Technology Ltd would not have happened. It is because of their high handedness, that the market is not going anywhere or there is no uniform rise in the share price in all space, like we used to witness in 2004-2007. These people should all be sacked and replaced with those who have some power to think independently. Since, the last 5-years, the regulators, the government of India and the RBI have turned the Indian Share Market, into a JOKE. Really, what to say, about such mediocrity! I do not understand what is the use of having 5% circuit limits in stocks when in the F & O Segment there is no such thing!! It seems some clowns have been entrusted to oversee the activities of the Indian Stock Market]

NEW YORK: US asset manager PIMCO expects that the Federal Reserve's continued bond-buying program will put a floor under gold prices for the rest of the year, PIMCO's commodities portfolio manager said.

Nic Johnson, who helps manage $30 billion in commodity assets for PIMCO, said he placed bullish bets on gold.

 The Fed's decision on Wednesday to delay the expected cut in monetary stimulus has materially reduced the downside risk for gold, Johnson said in an email to Reuters on Thursday. The Fed said it would wait for more evidence of solid growth before starting to reduce its monthly purchases of $85 billion in bonds.

As investors went on their biggest one-day buying spree in gold in over a year on Wednesday, Johnson sold some gold put options in expectation that bullion has bottomed out for now.

Put-selling is an option strategy allowing the option writer to pocket the premium in exchange for bearing the risk that gold prices might fall below the strike price. Puts give the holders the right to sell at an agreed price within a specified time.
Still, uncertainty over the timing and size of the Fed's tapering will likely keep prices relatively rangebound until the end of the year, Johnson said. The Fed's stimulus program has kept interest rates low and bolstered bullion prices for the past four years.

Buying by Asian investors and central banks will offset continued liquidation of exchange-traded funds, with the Fed actions capping gold's downside, he said.

"It is unclear if gold will extend rally, but given the action of the Fed I would say it is unlikely that gold will retest its three-year lows near $1,180 an ounce set in late June," Johnson said.

However, expectations that the Fed's delay would rekindle fund interest in bullion as a hedge against inflation and US dollar depreciation had stalled by Friday. Gold prices fell over 2 per cent to around $1,330 an ounce.

The impact on gold of any tapering by the Fed is still not clear. Some traders say it is already priced into the market after Fed Chairman Ben Bernanke raised the prospect of tapering in May. Others say lack of inflation after years of money printing by central banks has undermined gold's appeal.

Bullion is a traditional inflation hedge, particularly in cases of actions by central banks.

Johnson cited lower US real interest rates for gold's gains after the Fed announcement on Wednesday. Benchmark 10-year Treasury yields were 2.85 per cent before the Fed's announcement and have fallen to 2.73 per cent on Friday.

Institutional and retail investors have exited gold this year, reversing years of buying as they braced for the Fed ending its stimulus, putting bullion on track for a 20 per cent loss this year, its worst in over a decade.

 After gold's historic two-day selloff in April, Johnson told Reuters the firm had increased its precious metals exposure in its commodity accounts.

Pacific Investment Management Co., a unit of European financial services company Allianz SE well known for its bond investments, had $1.97 trillion in assets as of June 30, according to the company's website.

Courtesy: The Economic Times

MCX gold can consolidate sideways

[Editor: Gold has always been and will continue to remain as safe instrument of choice when people lack confidence in their governments. Lacking confidence doesn't only mean that they’re not certain that equities will perform, but it also may mean that they don’t trust their government, that it will operate in their best interests...in such a scenario Gold can be best alternative both as an investment and a trading option. The Chinese demand for Gold is constantly on the rise and it is anticipated that its gold demand may overtake India as the largest consumer in the near future. Physical demand for gold coins is still very strong globally.  Moreover, India’s traditional strong festive season and demands due to ensuring wedding season, followed by Diwali, may keep the Gold prices buoyant. However, in Comex, Gold has stiff resistances at $ 1375 and $ 1390, whereas supports can be found at $ 1350 & $1320]

In a surprise move, the US Federal Reserve retained its stimulus measures in its policy meet last week. Gold hit $1,363.7/ounce on Wednesday, up 4 per cent and closed the week at $1,325/ounce. The news that existing home sales in the US increased 1.7 per cent in August to an annual rate of 5.48 million units against the expected 5.25 million units dragged price. Silver ended the week at $22.2/ounce, down two per cent.

SUBDUED APPETITE

Investors’ appetite for gold didn’t return. The US SPDR gold trust’s holdings were reported at 910.19 tonnes on Friday, marginally lower from the previous week.

In the domestic market, gold reversed its downward track and recorded a gain despite rupee’s appreciation. MCX gold hit Rs 30,544/10 gram on Thursday and closed the week at Rs 29,277/10 gram, up one per cent. MCX silver ended at Rs 49,306/kilogram, up marginally. Rupee hit 61.64 against the US dollar on Thursday, but later lost steam and ended at 62.26.

MCX saw good trading interest in gold and silver futures contract. In gold, the average daily volume was 1.54 lakh contracts, up from the previous week’s average of 1.14 lakh contracts. In silver futures, the average volume was 1.59 lakh contracts, up 35 per cent over the previous week.

MARKET NEXT WEEK

Analysts do not see a change in Fed’s stance of continuing on stimulus at least till November. In August, the jobless rate in the US was 7.3 per cent, much higher to Fed’s comfort level of 6.5 per cent. The US GDP growth estimates have also been revised downwards to 2-2.3 per cent from around 2.3-2.6 per cent earlier. But, gold investors can’t take much comfort.

The yellow metal will remain volatile till a decision is taken on raising the debt ceiling. Failure to arrive at a consensus, though, may give gold a leg up. Next week, the flash PMI Manufacturing numbers on Monday, consumer confidence numbers on Tuesday and new home sales numbers on Wednesday will also be watched. Thursday will see the quarterly GDP estimates and the crucial jobless claims numbers from the labour department. For domestic market gold traders, rupee’s move will be key to gains/loss in portfolio. In his first monetary policy review on Friday, the RBI Governor Raghuram Rajan reduced the MSF (marginal standing facility) rate by 75 basis points reversing partially the liquidity tightening measure taken in July to save rupee.

TRADING TIPS

As indicated in our previous column, MCX gold cut its first support around Rs 31,160/10 grams last week. However, it reversed at Rs 29,277 much before the second support at Rs 28,743 on positive cues from the Fed. Now, it looks like the metal may hover sideways for sometime and then drop to Rs 29,200. The next support on the downside would be Rs 28,800.

The metal needs to gain momentum and break Rs 31,400 to see a trend reversal. For this, a drop in rupee may be of help.

MCX silver too behaved in a manner that we had forecast and cut the support at Rs 49,239/kilogram to hit a low of Rs 48,488. In the coming week, the metal may weaken further to Rs 46,713 and Rs 43,587. If price manages to rise and cut Rs 52,863, it could hit Rs 55,566.

rajalakshmi.sivam@thehindu.co.in

Courtesy: The Hindu Business Line

Investor sentiment on gold sees upswingSentiment is expected to remain bullish

[Editor: Till yesterday, this financial daily was asking all not to invest in GOLD; but today suddenly their views changed....Huh!! Now will this paper pay for the losses of those who shorted GOLD, reading the outlook of their analysts? But, on the flip side, some investors/ traders never learn from their mistakes of trusting a financial daily blindly. Once they see, a news they jump to either sell or buy the scrip, without understanding what it actually means--this is the irony. This blog  has been maintaining BULLISHNESS on GOLD, since the last few weeks]

The US Federal Reserve’s decision to continue bond-buying has lifted investor sentiment for gold and silver. After the Fed announcement, both metals went up over five per cent in the US market. In Indian market also, both metals rose, but the rise was capped because of appreciation in the dollar value of the rupee.

In the Mumbai spot market, gold climbed 0.9 per to Rs 30,280 per 10g, while silver moved up 1.8 per cent to Rs 51,815 a kg. Spot gold internationally was trading at $1,367.51 per ounce, up 0.2 per cent, while spot silver was trading flat at $22.97 per ounce. Gold on MCX in day trade stood at Rs 30,424 per 10 g, compared with Wednesday’s close of Rs 29,990 per 10g. Silver was at Rs 51,185 a kg, compared to Wednesday’s close of Rs 49,577 a kg.

Market participants say by continuing bond-buying, the Fed has ensured the dollar remains weak, which means money will flow to risker assets like equities and gold.

“Large part of liquidity will go towards equities in the US, but investors will also buy gold as it has been trading lower and international gold could go up to $1,450,” says Gnanasekar Thiagarajan, director-Commtrendz Research. “In India, however, weaker dollar means stronger rupee, which will cap the rise in gold prices.”

He believes base metals are expected to see offtake and hence prices will remain high which will also benefit silver. Because of the rising rupee, the gold price in the Indian market might not go up fast. Gnanasekar puts the Indian price target at Rs 31,000 per 10g.

Reena Rohit, an analyst with the Angel Commodities says: “Easy liquidity has been good for gold price and that was reflected today after yesterday’s (Fed) announcement. Investors are back to the market.”

While from domestic demand side, inauspicious fortnight (pitru paksha) for gold buying is beginning from Friday, retail customers will stay away from the market for the time being. However, “traders have started buying gold to remain prepared for the upcoming demand season,” says Rajiv Popley, director, Popley Group.

On the other hand, base metals traded on a negative note on Indian markets despite commodities moving up internationally, due to appreciation in the rupee.. 

Courtesy: Business Standard

WINNING STROKES: THINK DIFFERENT

Candle Stick Chart of Punj Lloyd Ltd

Manappuram Finance Ltd as expected moved up today, after Religare Securities Ltd recommended the scrip as a buy for a short term target of Rs.25. CLICK HERE. According to my closed sources, who refused to be named, "There would be better numbers going ahead, as the price of gold is buoyant. In case the company wants to recover its loan amount and forced to sell the collateral, there would less hassles; as prices are much higher, than in June, when Bullion fell a two-year low. Value of the collateral going up always helps in the lending business".  Gold futures closed at Rs.30690.00 per 10 grams in MCX yesterday. Manappuram said in a March, 2013, stock exchange filing, declining gold prices may trigger an increase in defaults and an “under-recovery of revenue on certain gold loan portfolios.” The company’s gross bad debt rose 21% in the three months ended June 30 from a year earlier. However, this is expected to come down drastically now as the gold prices are above Rs.30, 000 per 10 grams. I think the scrip should now race towards Rs.31-32. The stock exchanges should remove 5% circuit limit for the stock or put a minimum 10% circuit limit. In these kinds of scrips 5%, circuit limit is simply a hoax. 

Allied Digital Services Ltd hit the buyer freeze in the late afternoon trade. The scrip should be moving towards the next target of Rs.22-23. The company would be one of the biggest beneficiaries of the fall in INR Vs USD. Those who are holding the scrip should average it on all declines. 

With INR recovering from all time lows, both the stocks VIP Industries Ltd and SAIL recommended as a strong buy moved up yesterday in the Indian bourses. While VIP Industries Ltd touched Rs.52.05 intraday, SAIL touched Rs.51.35. Both the scrips will gain further if INR appreciates more against the USD. Last week Indian  Foreign Minister, Salman Khurshid said in an interview to a business channel that the oil minister will on 16 September 2013 announce plans for lowering fuel consumption. This is expected to have a positive effect on the INR Vs USD.
Punj Lloyd Ltd was recommended yesterday around Rs.25.50-26, in the dying hours of the trade. Punj Lloyd showed a turnaround in June, 2013 quarter, when it reported a consolidated net profit of Rs.40.41 crore in Q1 June 2013, as against net loss of Rs.13.37 crore in Q1 June 2012. Punj Lloyd's consolidated net sales rose 10.8% to Rs.3000.26 crore in Q1 June 2013 over Q1 June 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) declined 1% to Rs.293 crore in Q1 June 2013 over Q1 June 2012. The company is expected to get benefits from the recent announcements from the government. Punj Lloyd, is a leading EPC conglomerate. Punj Lloyd's scope of work includes residual basic and detailed engineering, procurement, construction, installation, pre-commissioning, commissioning and project management for the sulphur block comprising 2 x 100 TPD Sulphur Recovery Unit including Tail Gas Treatment Unit, 60 m3/hr Sour Water Stripper and 250 TPH capacity Amine Regeneration Unit on a single point responsibility basis. Last month the company, was awarded a contract worth Rs.358 crores by Chennai Petroleum Corporation Ltd (CPCL) to build the Sulphur Block of Resid Upgradation Project at its Manali refinery near Chennai. The project is expected to be commissioned in December 2015. With this contract, the order backlog for the Punj Lloyd Group on a consolidated basis has gone up to Rs.21, 226 crores, reflecting the total value of non-executed order as on June 30, 2013 and the orders received after the day. The Group's strategy has been to expand its footprint outside India and today over 65% of orders represent the growing regions of Middle East, Africa, and Asia Pacific. While revenues show a reasonable increase in challenging global macro environment, margins are set to improve as the rupee appreciates further. n the coming months, the group is actively looking at retiring high interest debt. The latest book value of the shares of the company is Rs 115.88. The share touched its 52-week high of Rs.64.10 and 52-week low of Rs.20.25 on 09 January, 2013 & 04 September, 2013, respectively. At current value, the price-to-book value of the company is 0.21. The market cap of the company at the CMP of Rs.24.75 is only Rs.821.94  Cr, which makes it look very attractive for short term investments. Earlier, National Stock Exchange of India (NSE) had decided to exclude the company from the futures and options (F&O) segment with effect from only, 1st November 2013. Therefore, there will not be much sentimental impact on the share price, due to this episode, in September, 2013. 
Jai Prakash Associates Ltd reached my 3rd target of Rs.42 (intra-day it touched Rs.43.90), yesterday. The news of selling its cement division gave a spurt in the stock price. The scrip was recommended around a couple of weeks back at around Rs.31-32.