Commodities round up

ET gives a round up of commodities viz. gold, silver, copper, jeera and crude oil.


GOLD: Gold prices today recovered by Rs 125 to Rs 18,600 per 10 gram in Delhi’s spot market on the back of a firming trend in the global markets. August gold futures were steady in the range of Rs 18,325-18,399.

At 5:15 pm they traded at Rs 18,371 per 10 gm. Gold price in global markets, which usually sets the trend at the domestic level, rose to $1195.70 an ounce at 1117 GMT. Gold firmed in Europe today after a weak Portuguese debt auction raised concerns over the fragility of the euro zone banking sector, knocking the euro, but gains were limited by softer investment demand.

A 6.1-tonne fall in holdings of the world's largest gold-backed exchange-traded fund, the SPDR Gold Trust, on Tuesday, their biggest one-day decline since December, indicated the waning investor confidence in the metal, analysts said. Gold is expected to move up later in the day, taking international cues.

SILVER: Silver also gained Rs 80 to Rs 28,980 per kg on increased industrial offtake. Silver futures prices, in agreement with the broad firming trend, gained max to Rs 179 and made high of Rs 28,839 per kg. At 05:20 pm, it traded at 28,779. Comex silver remained range bound in the last trading session.

Silver prices were supported by gold's movement, but gains were capped by the weak data released from across the globe. There was weak US housing data which is pointing towards slow recovery of economy. At COMEX it ended marginally in the green at $17.70. Spot silver touched 17.83 per ounce in today’s trading sessions.

COPPER: Copper made 3-week high in international market today as strong physical and Chinese buying coupled with falling inventories boosted prices, but gains were capped by the uncertain outlook for economic growth.

By 1133 GMT, copper for 3-month delivery on the LME traded at $6,795 a tonne from $6,637 at the close on Tuesday and compared with a session high at $6,830. On the other hand, global copper market recorded a surplus of 73,000 tonnes from January to May 2010, versus a deficit of 56,200 tonnes in the same period last year, the World Bureau of Metal Statistics (WBMS) said today.

But buying is strong from the stockists’ side, so it won’t put pressure on the copper prices to go southwards. India copper futures are 25 up near their today’s high and going to hit its 3-week high tracking overseas leads where in August contract made high of Rs 321.20 per kg. "Buying copper on correction is recommended at 316, for short-term target of 326/340," said Pranav Mer, senior analyst with Mangal Keshav Commodities.

OTHER METALS: At LME zinc traded at near two week highs at $1,895 a tonne from $1,875. India Zinc July futures was trading 1.61 percent higher at Rs 88.45 per kg. “Zinc may see an upside of 90 levels", said Pranav Mer. Battery material lead was at near two month highs at $1,865 from $1,837, while lead for July delivery on MCX was trading 1.87 percent higher at Rs 87.15 per kg.

"Lead is looking positive at 90/91, buy on correction to Rs 86," said Mer. China also gave estimates for lead supply, that’s its deficit for the first time, Reuters reported. Steel-making ingredient nickel traded at three month highs at $19,340 from $19,125 at LME during today trading sessions, "Nickel for July delivery was trading 1.24 percent higher at Rs 913.10 per kg. Nickel may trade in the range of Rs 900-930”, said Mer.


CRUDE OIL: There is optimism in the market considering strong equity markets, therefore oil rose above $78 a barrel today, a day after buoyant US corporate earnings which raised optimism over the strength of economic recovery in the world's largest economy.

US crude for September, the front-month contract after Tuesday's expiry of August, rose 60 cents to $78.18 a barrel at 1129 GMT. India crude futures got strong leads from overseas market. August contract at MCX was trading at Rs 3,692 (05:50 pm) per barrel, 0.60% up as compared to yesterday close of Rs 3670.

SUGAR: Indian spot sugar was steady for a seventh straight day on Wednesday as millers firmly held prices even as demand dwindled at current levels, dealers said. Demand from bulk buyers reduced. "Trading was negligible in spot market. Buyers were postponing purchases. They were expecting correction in prices," said Harakhchand Vora, vice-president of the Bombay Sugar Merchants Association.

In Kolhapur, a key market in top producer Maharashtra, the most traded S-variety sugar nudged down by a rupee to Rs 2,599 ($55) per 100 kg. India's sugar stocks at the start of the new season in October will rise to 5.9 million tonnes, the Indian Sugar Mills Association said on Tuesday.

The country's 2010/11 sugar output is expected to be around 25 million tonnes, up from 18.8 million in 2009/10, Vinay Kumar, managing director of India's National Federation of Cooperative Sugar Factories, said. Internationally raw sugar futures on ICE were firmer in a range-bound market, with the trading band seen barely moving in the days ahead.

The white sugar market was underpinned by supply tightness that helped to widen the nearby premiums. International dealers kept a close watch on weather in top consumer India with weak monsoon rains in recent days not yet seen as a major cause for concern.

JEERA: Jeera futures rose to a fresh contract high in afternoon trade today as robust domestic demand, firm global prices and poor stocks strengthened sentiment, analysts said. "Syria and Turkey have raised prices in the international market, diverting overseas demand to India," said Sudha R. Acharya, analyst at Kotak Commodities.

The most active August jeera contract last traded at Rs 15,491 per kg, 4% up. Jeera exports in April-May 2010 fell 12 percent to 8,300 tonnes from the same period a year ago and traders said there has been a pick-up in shipments since. At Unjha spot market, jeera gained Rs 415.50 to Rs 14,567 per 100 kg. Jeera outlook is positive as demand is strong from all sides.