Gold moved higher last week on the Indian Markets - SMC Global

Gold moved higher last week on the domestic bourses while traded flat in COMEX. Investors sold 490.40 metric tonnes valued at $21.8 billion through ETPs since Feb 8 and the 2,124.7 tonnes left is the least they have held since April 2011. India raised the import duty on Gold to 8 percent from 6 percent on June 5 and the central bank also further restricted shipments. Overseas purchases slid to an average of $36 million a day in the 14 business days through June 7, compared with an average of $135 million a day in the 13 days through May 20. Paulson, the largest investor in the SPDR Gold Trust, the biggest ETP, had a 13 percent loss in his Gold Fund last month, which takes the decline since the start of the year to 54 percent.

Crude oil price continued its upside momentum as it tested the key level of 5600 in MCX and 96.50 in NYMEX. According to EIA, U.S. gasoline demand averaged 8.8 million barrels a day in the four weeks ended June 7, up 0.9 percent from the prior week. According to the OPEC, world oil demand would gain +0.7M bpd to 89.6M bpd in 2013. Oil consumption in developing countries would increase +1.2M bpd with demand growth in China growing by +0.4M bpd. Profit booking was seen in the base metals counter, which was due to lack of demand. The People's Bank of China added a net 92 billion yuan into the financial system last week, down from 160 billion yuan in the five days through June 7.

The southwest monsoon further advanced over some parts of Gujarat, Jharkhand, most parts of Madhya Pradesh and entire Chhattisgarh. Ample annual monsoon rains have covered half of India two days ahead of the usual date. Rainfall in the second week of the season ending June 12 was 35% above average, helping early planting of a host of summer crops, including rice, oilseeds and cotton, in many parts of the country. As regard price movement of agri commodities, the guar complex, the rain fed monsoon crop, continued to witness a steep downfall on good progress of the monsoon and hopes of a higher area under sowing. Conditions are favourable for further advancement of the monsoon in Gujarat, Madhya Pradesh, Uttar Pradesh and Rajasthan.

The bullrun in maize prices witnessed a pause owing to the profit booking from the higher levels. Among the gainers, soymeal & cotton prices on the national bourse gained a little supported by export enquiries & on weak rupee. In the latest report given by U.S Dept of agriculture, the projected world 2013/14 ending stocks was reduced marginally. Beside, global oilseed production for 2013-14 was projected down i.e 0.5 million from last month. In spices, turmeric prices on the futures platform continued its bearish trend following weak sentiments of spot markets amid lack of demand & jeera futures consolidated back on emerging demands.

Source : Equity Bulls

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