Commodity Online
The Indian economy may grow by 9 per cent in the next fiscal on the back of strong industrial growth and rising domestic consumption, according to Ernst and Young.

The European Central Bank (ECB) decision to downsize its annual gold sale in 2009 to 155 tonnes is expected to further boost yellow metal prices in 2010. The ECB has sold 400- 500 tonnes annually the last 10 years.

India’s crude oil production declined in November, led by lower output at Oil & Natural Gas Corp (ONGC), the nation’s largest explorer. Asia’s third-biggest energy consuming nation pumped 2.79 million tonnes of oil last month, 1.5 per cent less than a year earlier,according to official data. Production by non-state explorers increased 4.5 per cent to 458,000 tonnes.

Gold
Gold prices continue to hover closer to $1100 range although fundamentals that pushed gold to $1226 in December 3 seems to remain intact. On Tuesday, New York gold prices fell to $1075.20 as US existing home sales data improved dollar to three-and-a half month high. However on Wednesday, gold surged to $1093 as new US home sales data put pressure on the dollar. The trading range was $1080-1094. The yellow metal has gained significantly by 23% this year on dollar weakness, investment demand and demand from High Net Worth individuals.

MCX Gold futures touched an all time high of 18364 on December 3 tracking global trends but is now trading at 16777 levels. On Wednesday, MCX Feb gold fell to 16550 on profit booking ahead of Christmas holidays.

Going ahead, gold could get a boost in 2010 on increased Central bank buying and investment demand. Spot Gold in New York has support at $1078/1070 levels while resistance is seen at $1108/1120. Spot Silver prices shall find support at $16.85/$16.65 whereas resistance is seen at $17.45/$17.55. MCX Feb Gold has support at 16520/16410 whereas resistance is seen at 16825/16900. MCX Mar Silver shall find support at 26855/26670 whereas resistance is seen at 27450/27865 levels.

Base Metals:
In the last week, base metal prices have gained across the board as momentum based fund buying propelled metals to a robust close, especially on Wednesday. Prices gained yesterday despite poor housing data out of the US. Copper ended the session above $7,000 per tonne. The wider financial arena was broadly supportive even after US new homes sales figures disappointed as November data emerged. The dollar fell back from three-and-a-half-month highs against the euro and supported an upside in base metals.

New home sales came in much worse at 355,000 in November, much lower than expectations for 442,000. And University of Michigan Consumer Sentiment also undershot expectations at 72.5 from 74. Inflation expectations grew, however, rising 2.5 percent. Earlier in the session, personal spending and income data was mixed to neutral. On the fundamental front, looming industrial action at two locations in Chile provided downside protection for copper but, with total inventories at historical highs and rising, as well as the end of the year, fundamentals are not the major focus at the moment. This inventory overhang will need to be worked off if the global economy moves from its present patchy signs of recovery to sustained and widespread growth. For the metals, although expectations for 2010 are promising, price moves in the complex will be erratic until early next year. MCX February Copper Contract shall find a strong support at 322/314 levels and resistance at 340/346 levels.

Energy
Oil prices have gained in the last week as hopes of economic recovery led prices higher. Prices rose on Wednesday after the US Energy Department showed a larger-than-expected decline in US inventories. This signaled a fuel demand recovery in the world’s largest oil consumer. Oil inventories fell 4.8 million barrels in the week ended December 18. With crude stockpiles at their lowest point in nearly a year, investors have some hope that the worst of the glut is in the past. Refiners are attempting to run down the surplus by reducing their fuel production and importing less oil. But the recent destocking may prove to be a false start when 2010 arrives.

The bulk of the decline in oil inventories is taking place along the Gulf Coast, where companies have a strong incentive to run down stocks to avoid paying taxes on crude accumulated over the course of the year. And while demand has improved from this year's lows, it was still 1.1 per cent below year-ago levels in the four weeks ended December 18. Oil prices are expected to trade with a positive bias in the short-term on hopes of demand recovery but a sharp upside could be capped on account of the strength in the dollar. Risk aversion ahead of the year-end could lead to lower demand for higher-yielding and riskier investment assets. MCX January Crude Oil Contract shall find a strong support at 3420/3350 levels and resistance at 3720/3840 levels.

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