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Commodity markets fell on speculation that China will increase borrowing costs after the country’s exchanges increased margins to curb speculation. China consumes most commodities in huge quantities including alumi..
28 Nov 2010
Commodity Online Info Service
Commodity markets fell on speculation that China will increase borrowing costs after the country’s exchanges increased margins to curb speculation. China consumes most commodities in huge quantities including aluminum, zinc, copper, coal and iron ore.Commodities dropped on speculation that China, the biggest consumer of everything from aluminum to zinc, will increase borrowing costs and after the country’s exchanges increased margins to curb speculation.

Commodities also fell on mounting military tension on the Korean peninsula and as a stronger dollar increased the cost of commodities denominated in the currency. South Korea said North Korea may have conducted artillery drills, after its neighbor warned of retaliation to any encroachment of its sovereignty. The greenback rose to a two-month high against a six-currency basket, Bloomberg reported.

Major Headlines
GM IPO now world's biggest
General Motors Co's initial public offering became the world's biggest at $23.1 billion after underwriters swiftly took up additional shares following last week's IPO.

Food inflation dips to near 3-month low
Food inflation continued its downward trend for the sixth straight week, dipping to a near three-month low in mid-November.

India to start power trade with Sri Lanka by 2014
The government’s initiative to have trading of electricity with Sri Lanka is likely to bear fruit by mid-2014, with the commissioning of a high capacity power transmission link between the two countries.

Futures turnover up 74%
The turnover of the five national and 17 regional exchanges in the country rose 73.9 per cent on year to Rs 5.50 lakh crore during November 1-15, according to an official at the Forward Markets Commission (FMC).

Govt incentives RE generation, trading
The government has come out with a slew of measures for promoting power generation using renewable sources. These incentives will coincide with trading in renewable energy (RE) receipts on power exchanges that will begin in the next couple of months.

Tyre industry contests Rubber Board's stock estimate
With rubber prices peaking to over Rs 200 a kg, a worried industry has questioned the amount of stock available in the country. “In our considered view the natural rubber stock, as projected by the Rubber Board, is much higher than the actual stock according to the assessment of the industry and other stakeholders, including dealers and traders,”

Tyre companies challenge Rubber Board data
Tyre companies have criticised the state-run Rubber Board for inflating rubber stock position and stated that the board's claim of sitting on stocks of more than 3 lakh tonne was merely 'on paper'.

COMMODITY ANALYSIS

Gold
Gold futures declined at the end of the week as demand in China may slow and the dollar’s rally reduced the appeal of the metal as an alternative investment. Silver fell 3 percent. On Friday, Gold futures for February delivery fell $10.70, or 0.8 percent, to settle at $1,364.30 an ounce on the Comex in New York.

Among other precious metals, Silver futures for March delivery slid 83.1 cents to $26.772 an ounce. The price has jumped 59 percent this year. Platinum futures for January delivery dropped $13.20, or 0.8 percent, to $1,645.20 an ounce on the New York Mercantile Exchange. Palladium futures for March delivery declined $18.60, or 2.7 percent, to $678.85 an ounce.

Chief market strategist at CMC Markets said in a report that the prospect of a likely Chinese rate hike was limiting gold's ability to exploit its position as a safe haven from the Korean tensions and European debt crisis. Investors are concerned that one or more rate hikes to dampen rising Chinese inflation could hit demand for the commodities, Bloomberg reported.

India's gold market is still in the midst of its busy season after the Dhanteras and Diwali festivals earlier this month as many weddings are to take place till December, when demand for the yellow metal tends to go up. In the quarter to September, India imported 214 tonnes of gold, up 21.6 percent on year, the WGC said.MCX Gold December opened the week at 20,099 and moved sharply higher at 20.557 but weakened and closed Rs 208 higher at 20,310. Support for gold is seen at Rs 20.075 for the week ahead. MCX Silver prices fell sharply by Rs 615 to Rs 40,855 tracking global trends.

Crude Oil
Crude oil fell at the end of the week on concern Ireland’s debt crisis and on strong dollar. NYMEX Crude oil gained 2.2 per cent this week and Brent crude also zooms 1.5 per cent this week. On Friday, Crude oil for January delivery slipped 10 cents to settle at $83.76 a barrel on the New York Mercantile Exchange. Brent crude oil for January settlement declined 52 cents to end the session at $85.58 a barrel on the London-based ICE Futures Europe exchange.

Crude supplies rose 1.03 million barrels to 358.6 million in the week ended Nov. 19, according to the Energy Department report. In London, ICE January Brent crude fell 52 cents to settle at $85.58 a barrel.

As the euro was kept under pressure and the dollar strengthened amid the euro zone debt crisis, European officials denied reports on Friday that Portugal faced pressure to seek a bailout and Spain ruled out needing help to manage its finances.

A stronger dollar typically pressures oil prices as it boosts the value of greenbacks paid to producers for dollar-denominated oil while making it more expensive for consumers with other currencies. Crude oil for January at Nymex rose 2.76% for the week at $83.76 after hitting a low of $82.78.

Oil prices at $100 a barrel will only trigger action from the Organization of Petroleum Exporting Countries if they are accompanied by a supply shortage, the group’s secretary-general said.

MCX December crude oil prices had strong support at Rs 3699 levels and closed Rs 108 higher for the week at Rs 3861. Support for the coming week seen at Rs 3817.

Base Metals
Base metals continued to weaken this week in global markets on concern that demand of metals will decline as China moves to curb speculation and cool inflation. Copper futures also fell tracking other metals. Copper futures fell 2.1 per cent this week. Copper futures for March delivery fell 0.4 cent, or 0.1 percent, to settle at $3.7625 a pound at 1:23 p.m. on the Comex in New York, on Friday. On the London Metal Exchange, copper for delivery in three months dropped $101, or 1.2 percent, to close at $8,239 a ton ($3.74 a pound).

Copper may trade around $3.70 by the end of the year as Chinese concerns cap price gains, Streible said. The price has climbed 12 percent this year, reaching a 30-month high of $4.0875 on Nov. 11.

MCX February Copper fell Rs 5.75 for the week at Rs 382.15 and had strong support at 372.90 levels.

Major Indices

 

 

Closing Data for Friday, 26th Nov 2010

 

 

Percentage Change

 

 

Dow Jones   

 

 

11092

 

 

-0.78

 

 

BSE Sensex  

 

 

19136.61

 

 

-3.01

 

 

NSE

 

 

5750.20

 

 

-4.50

 

 

Continuous Commodity Index (CCI)

 

 

563.27

 

 

-0.01

 

 

Reuters Jeffrey/CRB Index

 

 

301.13

 

 

1.03

 

 

MCX Comdex

 

 

3062.26 (Saturday 27, Nov)

 

 

-1.75

 

 


Compiled by Commodity Online Info Service
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COMMENTS (1)
Subir
29 Nov 2010
am i buy zinc 100.20 plz suggest me...
Saam hold zing t1 102.80 t2 106.80 t3 110.80
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