The yellow metal gold has seen a phenomenal rise in both 2008 and 2009. Last year we saw active gold future prices touching historical highs of $1033.90 a troy ounce backed by the depreciating dollar, leading to an increased appeal of the gold as alternate asset class. From thereon, gold prices fell to $681 levels as dollar appreciated on back of financial and economic uncertainty and cash liquidity got squeezed in the market. In the current year, prices seem to be back on bull track as they surge by 8.8% in a span of 48 days.
Demand for gold is broadly classified into jewelry fabrication, industrial application, government and central banks, and private investors. The demand is generally concentrated in the Indian subcontinent, Turkey, and the Middle Eastern nations. Over 50% of the demand comes from the jewelry sector while industrial & dental and investment contribute to the rest. In Q308, jewelry demand constituted 58% of the total gold demand, while the remaining two categories had a share of 9% and 33%, respectively. Investment demand is other major source of demand which is more during period of uncertainty.
Although prices have increased by 8.8% on COMEX, domestic market have witnessed an increase of 11.44% as rupee depreciated by 1.52% and demand during festive season picks up. For instance, when gold reached $1033.90 levels on March 17, 2008, MCX gold prices made a high of Rs.13397 per 10 grams, while now when gold prices on COMEX are at $962.70 levels; MCX gold prices are seen quoting at Rs.15200 levels. Commodity prices in the long term generally tend move in particular trend which is observed or analyzed in order to obtain likelihood of the same. The seasonality index in this regard helps one determine and identify the periodicity of the price action. Nevertheless as truly said by William I. Tierney, Jr., Mark L. Waller and Stephen H. Amosson "Seasonals are based on past prices and may merely reflect random effects rather than any true predisposition in market performance. Also, even if seasonal patterns are well founded and appear to be statistically reliable, seasonal effects can be over-whelmed by changing fundamental (and even technical) factors."
If seen historically, gold demand during October-March is high when compared to other months, as India, the world’s largest consumer of gold; goes through the festive and marriage seasons. Demand for gold is especially more during this period as gold is regarded as an eternal
beauty by Indians. Given below is the chart showing seasonal pattern in gold prices for the period during 2002-2008.
Prices of gold started rising from the month of September, took a dip between December and January and rose again until March. Between March and September, prices have been usually on the lower side.
Showing posts with label karvy Comtrade. Show all posts
Showing posts with label karvy Comtrade. Show all posts
Monday, February 23, 2009
Wednesday, October 22, 2008
Gold still on the back foot: Standard Bank
“Gold is still on the back foot. With more dollar strength in the pipeline, the yellow metal is putting up little resistance,” said a Standard Bank report on Wednesday.
On MCX, the December contract for gold was trading at (14:54 IST) Rs12,188, down by about 1.5% from its day’s high of Rs12,317 on Wednesday.
MCX Gold December gold prices plunged to Rs12,307 levels and settled at Rs12,377 levels on Tuesday.
“Market is expected to come down and the next supports can be seen at Rs12,200 and then Rs12,050 levels,” said a Karvy Comtrade report on Wednesday.
The report also mentioned that the resistances can be seen at Rs12,400 and then at Rs12,436 levels. “If market sustains below Rs12,436 we may expect gold trading lower. We recommend taking short positions for the day,” it added.
The Standard Bank report also mentioned that after a steady opening just below $800 in Tokyo, gold moved gradually south as the euro weakened. At $790, some stops were triggered, and the metal quickly fell to $785, it said.
“With the dollar still on the rise, gold could remain under pressure today. Primary support is at $757, and a secondary support band at $742 - $720. Resistance is at $794, $810 and $818,” it said.
On MCX, the December contract for gold was trading at (14:54 IST) Rs12,188, down by about 1.5% from its day’s high of Rs12,317 on Wednesday.
MCX Gold December gold prices plunged to Rs12,307 levels and settled at Rs12,377 levels on Tuesday.
“Market is expected to come down and the next supports can be seen at Rs12,200 and then Rs12,050 levels,” said a Karvy Comtrade report on Wednesday.
The report also mentioned that the resistances can be seen at Rs12,400 and then at Rs12,436 levels. “If market sustains below Rs12,436 we may expect gold trading lower. We recommend taking short positions for the day,” it added.
The Standard Bank report also mentioned that after a steady opening just below $800 in Tokyo, gold moved gradually south as the euro weakened. At $790, some stops were triggered, and the metal quickly fell to $785, it said.
“With the dollar still on the rise, gold could remain under pressure today. Primary support is at $757, and a secondary support band at $742 - $720. Resistance is at $794, $810 and $818,” it said.
Tuesday, October 21, 2008
Analysts expect gold to resume lower trend
Market is expected to make a higher opening and the immediate resistance can be seen at Rs12,800 levels. Likewise, the supports are at Rs12,650 and then Rs12,570 levels. Analysts are expecting gold to resume lower trend after a brief higher correction.
Gold prices remained range bound and traded sideways in Monday’s session, in the absence of any major economic trigger.
The only economic data from the US was the leading indicator for the month of September, which unexpectedly rose thereby giving a lift to the dollar, said a Kravy Comtrade report.
For the day, as the market awaits no economic data, prices are likely to remain sideways. However the report also said that the strengthening US dollar is likely to put pressure on the bullion market, hence indicating a bias on the lower side.
The dollar advanced for a fifth day against the euro after Federal Reserve Chairman Ben Bernanke endorsed additional fiscal stimulus to support the US economy. The dollar traded at 18-month high levels against the euro on this act of the chairman, it said.
The MCX December contract for gold prices were seen trading sideways while closing it formed a technical Doji pattern in the daily chart and closed at Rs12,682 levels.
Gold prices remained range bound and traded sideways in Monday’s session, in the absence of any major economic trigger.
The only economic data from the US was the leading indicator for the month of September, which unexpectedly rose thereby giving a lift to the dollar, said a Kravy Comtrade report.
For the day, as the market awaits no economic data, prices are likely to remain sideways. However the report also said that the strengthening US dollar is likely to put pressure on the bullion market, hence indicating a bias on the lower side.
The dollar advanced for a fifth day against the euro after Federal Reserve Chairman Ben Bernanke endorsed additional fiscal stimulus to support the US economy. The dollar traded at 18-month high levels against the euro on this act of the chairman, it said.
The MCX December contract for gold prices were seen trading sideways while closing it formed a technical Doji pattern in the daily chart and closed at Rs12,682 levels.
Monday, October 20, 2008
US Federal testimony awaited: Karvy Comtrade
On account of weakening US dollar today bullion prices are trading higher by almost $12 on account of weakening US dollar. The dollar is seen to weaken on concern that the US Federal Chairman may forecast a prolonged downturn when he speaks today.
Ben Bernanke will testify at the House Budget Committee on the economic outlook and financial markets at 10 am in Washington. The continued poor economic data emerging from the nation has lead to poor economic outlook for the world’s largest economy.
Single-family home building sank to the slowest pace in 26 years in the US in September and the industrial production index dropping to 2.5 years lows, has increased lower economic prospects. The economic sentiment is badly hit as there seems to be no symptoms of revival in the housing sector.
No major economic data is awaited today; however the outcome of the US Federal chairman’s testimony will be crucial to watch out for. Prices are likely to remain on the sidelines for the day, on back of the weaker US dollar and uncertainty of the economic revival.
“The December contract gold on MCX traded lower and posted a lower closing at Rs12,587 levels. Market is moving lower as it is trading below the 50-day EMA in the daily chart. Market is likely to take an initial correction and the immediate resistance is seen at Rs12,624-Rs12,650 levels. If prices are sustaining below the resistance we may expect market trading lower. The supports are at Rs12,400 then Rs12,325 levels,” said a daily commodity report by Karvy Comtrade.
Ben Bernanke will testify at the House Budget Committee on the economic outlook and financial markets at 10 am in Washington. The continued poor economic data emerging from the nation has lead to poor economic outlook for the world’s largest economy.
Single-family home building sank to the slowest pace in 26 years in the US in September and the industrial production index dropping to 2.5 years lows, has increased lower economic prospects. The economic sentiment is badly hit as there seems to be no symptoms of revival in the housing sector.
No major economic data is awaited today; however the outcome of the US Federal chairman’s testimony will be crucial to watch out for. Prices are likely to remain on the sidelines for the day, on back of the weaker US dollar and uncertainty of the economic revival.
“The December contract gold on MCX traded lower and posted a lower closing at Rs12,587 levels. Market is moving lower as it is trading below the 50-day EMA in the daily chart. Market is likely to take an initial correction and the immediate resistance is seen at Rs12,624-Rs12,650 levels. If prices are sustaining below the resistance we may expect market trading lower. The supports are at Rs12,400 then Rs12,325 levels,” said a daily commodity report by Karvy Comtrade.
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