Commodity Online
India’s currency futures witnessed the highest trading volumes ever this week on Wednesday with close to $4.4 billion worth of trades executed on NSE and MCX-SX put together. Dealers attributed this to the record volatility that has accompanied the rupee rising 3% in the past four sessions. MCX-SX registered a marginally higher volume than NSE at Rs 10,798 crore.

The Indian economy is expected to grow between 5.2-5.8% in 2009-10, much lower than last year as the agriculture output is estimated to decline significantly because of drought in 276 districts of the country, according to Federation of Indian Chambers of Commerce and Industry (FICCI). The GDP projections for the current fiscal made by FICCI are far dismal than the estimates of 6 % by the Reserve Bank of India (RBI) and 6.3% by the Planning Commission. Its projections are close to the assessment made by the International Monetary Fund (IMF) about the Indian economy.

The Indian Commodity Exchange (ICEX), promoted by public sector MMTC Ltd and Indiabulls Financial Services, has got recognition from the commodity market regulator, the Forward Markets Commission (FMC).

The annual Wholesale Price Index-based inflation rose 0.7 per cent during the week ended September 26, below the previous week’s annual rise of 0.83 per cent.T

MCX has signed a memorandum of understanding with Tata Power to spread the awareness on the benefits of futures trading to farmers’ doorstep .Through the alliance, the benefit of futures price information will be reached to more than 2,000 farmers across 25 villages of Maharashtra where Tata Power has its project.

Equities in Asia and USA got a boost last week as corporate earnings aided sentiments. Dow Jones Industrial Average surged to 9864.94 or 3.98% gain, the highest in a year while Asian shares were on a 14-month high on investor optimism about global economy.

The country's second-largest commodity exchange National Commodity and Derivatives Exchange (NCDEX) will extend trading time by 25 minutes for select commodities on week days from November 2 to March 13, 2010.The extension in time from 11.30 pm to 11.55 pm is only for the trading of commodities like bullion, metals, crude, polymers, coffee, carbon credits and furnace oil  Agricultural commodities, however, will continue to be traded at the usual time — from 10 am to 5 pm. Moreover, the trading hour of all commodities on Saturday will continue to remain the same as before, that is from 10 am to 2 pm.

Gold
Gold's fundamentals remain extremely bullish, and ultimately global supply & demand determine prevailing price levels. Not only is it the best-performing major asset of this decade, it will protect capital from government inflationary predation. And despite gold's quadrupling since 2001, most investors still have zero gold exposure. Worldwide, the world buys about 80 times as much gold as silver, for investment. A continuing erosion of the U.S. dollar as a stable, reliable, store of value has forced investors to have a relook at gold very closely. The central banks of China & Russia have already embarked on gold-buying programs - and some other central banks with low exposure to gold as a percentage of total official reserves are likely to join them. A gradual recovery in gold jewelry offtake reflecting the hesitant economic landscape in the main gold-jewelry consuming nations and the continued growth of China & India are supportive factors.

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The introduction and attractiveness of exchange-traded gold funds (gold ETFs) have made gold more accessible and acceptable to more investors - both retail and institutional - around the world. Rising gold investment interest is also a reflection of the metal's strong performance in the past few years relative to equities, real estate, and other financial instruments. Importantly, there are also growing numbers of investors concerned about inflation, U.S. dollar depreciation, financial-market uncertainty, and other related fears that interest in gold as a store of value, hedge, portfolio diversifier, etc. seems likely to grow by leaps and bounds, pushing the price to progressively higher highs over the next few years. Since gold and precious metals are priced and traded in US dollars, they surge in value when the US dollar declines.
As trillions in new money is printed, the dollar will fall precipitously relative to gold. In an environment where the dollar is already weak and other currencies are weaker, investors seeking to preserve and grow their wealth in 2009 must understand the impact of declining currencies on their portfolios. Prices have risen by almost 14.3% as of September 09. In domestic markets, prices shall find major support at 14550 and further below at 13400. On the upside, resistance is seen at 16150 and further upwards at 17000. Investment in Gold has been an excellent investment over past decades and we don’t see any different in coming decades either. The future of gold is as bright as ever with new highs to be scaled in times to come. Happy Investing.

Energy
Crude oil prices climbed ahead from $70 on demand hopes but dollar-rebound during the weekend capped gains. On the New York Mercantile Exchange, November crude settled up 8 cents, or 0.11 percent, at $71.77 a barrel,trading from $70.62 to $72.24 Friday. Crude prices above $71 on Thursday after closing at $69.57 previous on day was mainly on account of weaker dollar. But dollar rebounded on Federal Reserve Chairman, Ben Bernake’s remarks that US Central bank will be ready to tighten monetary policy as economic recovery takes hold. Rising equities also provided support for oil futures.
The IEA said in a monthly report that world oil demand will recover at a faster pace than previously expected for the rest of 2009 and in 2010 as the economy picks up. On a weekly basis, NYMEX November crude rose $1.82, or 2.6 percent. Nymex crude has support at $70 and resistance at $72.

Base Metals
Copper initially fell on thin and volatile trade but rose to a three-week high on Thursday at $6363 ended the week lower as doubts re-emerged about demand. Copper prices have already doubled this year on demand hopes. At LME, copper for three-month delivery was quoted at $6,230 as against 6,330 levels prevailing on Thursday. LME stocks have fallen by 250 tonnes but at 346,600 tonnes is still at five month high. Analysts pointed out that sentiments for base metals continue to be mixed with demand likely to pick up in next six months. The very recent rally in copper was aided by US data and strong earnings, positive outlook for top US aluminium producer Alcoa. Tensions related to workers problems in world’s largest copper mine Escondida and other mines including Spence, Bingham Canyn, Andina and Chuqicamata weighed on sentiments.

Analysts expect base metals to gain strength upto 2010 on increased demand and supply side risks Alluminium ended flat at $1,909 a tonne. LME inventories in the metal, used in transport and packaging, dipped 7,950 tonnes but remained in touching distance of record levels above 4.6 million tonnes.Steel-making ingredient nickel MNI3 ended at $18,750 from $19,495 while battery material lead MPB3 finished at $2,249 versus $2,285.Zinc MZN3 ended at $2,033 a tonne from $2,080 and tin MSN3 finished at $14,800 from $14,945.

Copper futures November contract at MCX ended lower at 293 levels as strong dollar hurt sentiments. On the previous trading sessionsr the red metal gained 2.7 percent.A strong dollar typically weighs on dollar-denominated copper by making it expensive for investors outside the U.S. MCX Copper may trade in range between 292-300 levels in the week ahead. Zinc November contract at MCX fell to Rs 94 per kg.

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