News

India Commodity Market Forecast

by By Vivek Gupta, CMT, Director Research, CapitalVia Global Research Limited. 26 Dec 2014, 10:00 pm

Last week MCX Gold future prices witnessed bearish movement in initial part of the week but jumped up significantly in later part due to lower prices of Gold that encouraged purchases coupled with decline in Gold imports in this month. India Gold imports have not registered significant growth this month despite Government removing Import curbs as jewellers had overstocked the yellow metal expecting more import curbs from the government. In November Gold imports surged significantly due to higher demand spurred by the festive & wedding season and low prices.

COMEX Gold future traded with bearish sentiments in initial part of the week but showed strong rally from near three weeks low ahead of encouraged demand due to lower prices. Bullion which has dropped to the lowest level since 2010 in November, doesn’t have much further to fall next year as doubts about the global economic recovery boost the metal’s appeal as a store of value. Individuals filing for initial jobless benefit decreased by 11,000 to 280,000 from estimates of 291,000, increased quarterly final GDP and personal spending data created bearish sentiments for precious metals. Assets in the SPDR Gold Trust were unchanged at 712.9 metric tons on Dec. 24 after slumping 1.6 percent, the most since June 2013.

Silver tracked the trend of gold and witnessed bearish movement in initial part of the week and bounced from lower levels in later part of the week. MCX Silver March contract fell more than 2.5 percent but could not sustain below 36000. COMEX Silver also could not sustained below its major support level of $15.50.

According to All India Gems and Jewellery Federation, Indian jewellers imported only 22 tonnes of gold in the first half of December. This figure signals a significant slump in gold shipment as the jewellers imported 151 tonnes of gold in November. The surge in import of gold in November 2014 was mainly driven by expectation of more restrictions by the Reserve Bank to control rising CAD but Indian government eased the restrictions on gold imports by withdrawing the 80:20 scheme in November end. Gold imports  surge in November due to higher demand spurred by the festive and upcoming wedding season, low prices and clarification in government's  policies reduces the Gold imports in December as jewellers do not have compulsion to re-export the imported gold as per 80:20 rule. On international cues Gold gained, post-Christmas trading on Friday as the dollar slipped against a basket of major currencies on thin volume trade as Australia, Hong Kong and Singapore were closed on Friday.

For this week, major U.S. data CB Consumer Confidence, Unemployment Claims and ISM Manufacturing PMI coupled with physical demand in Asian region will further provide direction to the bullions.