Commodity Online
Poor monsoon rains this year may have taken a toll on summer crop and driven up food prices to scary highs, but it hasn’t impacted rural India’s bubbling craze for shampoos, toothpastes and hair-oils. Demand for these personal care products grew faster in rural areas than urban areas during April-September, a period that includes the peak monsoon months, according to market research organisation, A C Nielson.

India imported 25.18 lakh tonnes of sugar during the 2008-09 season to augment domestic supply. Imports of raw and white sugar in the 2008-09 sugar season were 22.93 lakh tonnes and 2.25 lakh tonnes, respectively. The country is reeling under high prices due to lower output as sugarcane acreage has fallen.

Interest Rate Futures have failed to take off in National Stock Exchange with average daily turnover declining from Rs 267 crore at launch to Rs 13 crore. IRF volumes on the National Stock Exchange (NSE), the only exchange that hosts trading, have recorded a significant fall since the launch on August 31. Market players said this could be attributed to poor response from foreign banks and insurance companies.

The National Commodity & Derivatives Exchange (NCDEX) launched futures trading in platinum to widen its presence in the metal segment. A total of four contracts in platinum were offered for trading on the inaugural day, of which the first contract will expire next month, while the rest three in March, June and September next year, the exchange circular said.

Gold
Gold prices touched a high of $1,153/oz in the last week and prices traded higher on the back of bullish sentiments related to higher investment demand for the yellow metal. Prices could continue to trade with a positive bias in the coming week but will also take cues from the movement in the Dollar Index. The dollar strengthened this week and put pressure on the yellow metal as it made it look expensive for holders of other currencies. Though the short term trend in Gold remains up, we feel that even slight strength in the dollar could put pressure on prices. Investment demand from central bankers is on the rise and this factor is expected to be positive for the yellow metal. If more news on gold buying by central bankers is released in the coming days then prices could test new highs.

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US interest rates are expected to remain low for an extended period and that may continue to trigger a downside in the Dollar Index from the short-term perspective. Gold prices have risen around 30% since the start of the year and weakness in the dollar has been a major aid to the rally. Gold prices come under selling pressure as the dollar strengthens but fundamentals like low interest rates would continue to be bearish for the dollar and further buying in gold could emerge as investment demand has emerged. Doubts about a nascent economic recovery and jitters among central banks, some of which have diversified away from the dollar, have raised gold's allure as a safe haven asset. MCX December Contract shall find a strong support at 16850/16540 and resistance at 17320/17750 levels in the coming week.

Copper:
In last week, Copper prices touched a high of $6,992 but couldn’t test a major $7,000 psychological mark. Rumbles in the South American labour arena continued to offer support. Workers at Chile’s giant Chuquicamata mine are seeking a 7.5 percent wage increase, although at the Cerro Colorado mine, employees appear likely to accept an early wage deal offered by BHP Billiton and avoid a strike. BHP has evacuated the Spence mine following worker sabotage. Clearly, the threat of strikes remains a major feature of the industry, particularly in South America, and is contributing to the current pricing environment. Ongoing labour worries continue to provide upside support to prices. Even is the dollar strengthens, copper prices may not decline sharply as supply issues will come to the support. Even if inventories are rising, these issues will help the red metal trade with a positive bias in the coming week. MCX November Contract shall find a strong support at 311/303 and resistance at 320/328 levels in the coming week.

Crude Oil:
Oil prices came under pressure in the last week as demand concerns coupled with a stronger dollar put pressure on prices. Risk aversion also led to lower demand for higher-yielding and riskier investment assets. Oil prices have risen 74% this year but it fell during the week as investors closed off positions before the end of the year. US refinery utilization rates fell for the third consecutive week to 79.4% last week. Refineries are running at a low rate in the export markets like Korea, Taiwan, Singapore and that indicated that demand globally is weak. But the OECD has doubled its growth forecast for the leading developed economic next year and predicted a further acceleration in 2011 as China power a global recovery. Oil prices could continue to trade with a negative bias in the coming week as even slight strength in the dollar could exert selling pressure. MCX December Contract shall find a strong support at 3550/3450 and resistance at 3760/3930 levels in the coming week.

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