Gold Plummets Under $1200

Gold.....

MCX Gold futures dropped under Rs 25000 per 10-gram levels as the meltdown in the metal continued. The global prices tested their fresh three year lows and looked headed for further losses as $1200 per ounce mark gave up. Global markets were mixed but Gold continued to ease. The COMEX Gold futures gave up after a failed attempt to stay above $1200 in Asia and currently trades at $1193.40, down nearly 20 dollars on the day.

Euro gained from its three week low against the US dollar today as supportive data boosted the sentiments for the single currency. German retail sales were better than expected in May, as consumers returned to the shops after being kept away for months by the cold and rainy weather, data from the Federal Statistics Office showed Friday. Retail sales in May increased 0.8% from April, following three consecutive months of declines, beating economists' forecasts of a 0.3% drop in sales. The data are inflation-adjusted and also consider calendar effects.

The rise in sales comes as a robust labor market and buoyant consumer confidence boost households' spending prospects. German jobless claims in June dropped 12,000 on the month in seasonally adjusted terms, pushing down unemployment to its lowest level since December 2012, data from the country's BA labor agency showed Thursday. German consumer sentiment, meanwhile, is close to a six-month high, according to the GfK research institute.

The MCX Gold futures for August are quoting at Rs 24862, down around 25 on the day a massive rise of 10 % in open interest.
Source by Commodity Insights

Oil Rallies In Tandem With Equities

Oil........

Crude oil futures rallied to one week highs above $97 a barrel boosted by gains in equities and the positive data releases from US.
Japanese stocks shot higher Friday, as an overnight advance on Wall Street and a weakened yen combined with upbeat industrial-production data to lift sentiment, while other Asian markets also saw gains.
Japan’s Nikkei Stock Average jumped another 3.3% on top of Thursday’s 3% rally, recording a climb of more than 30% in the first half of 2013. The broader Topix improved by 3.2%, as the U.S. dollar advanced toward the ¥99-handle, with analysts eyeing further weakness for Japan’s currency.
Light sweet crude futures for delivery in August are trading up 7 cents at $ 97.14 per barrel on the New York Mercantile Exchange. It rose to one-week high on Thursday, after official data showed that U.S. jobless claims declined last week while consumer spending increased last month.
The data came after the Department of Labor said the number of people who filed for unemployment assistance in the U.S. last week fell by 9,000 to a seasonally adjusted 346,000, compared to expectations for a drop of 10,000 to 345,000.
A separate report showed that U.S. personal spending was up 0.3% in May, in line with expectations. The data also showed personal income increased 0.5%, above expectations for a 0.2% increase.
Investors had scaled back expectations that the Federal Reserve will start tapering bond purchases this year following a downward revision to U.S. first quarter growth on Wednesday.
The Fed’s stimulus program is viewed by many investors as a key driver in boosting the price of commodities as it tends to depress the value of the dollar.
Meanwhile, oil prices drew further support after official data showed that profits at China’s industrial companies jumped 15.5% in May from a year earlier, higher than April’s 9.3% gain. Market sentiment received a further boost amid improvement in China’s strained money markets.
MCX July crude oil futures may open today’s session near Rs 5855 levels with resistance near Rs 5890 levels.
Source by Commodity Insights

Economic Buzz: Global FDI Sees Massive Drop In 2012 Says UNCTAD

Global foreign direct investment (FDI) inflows dropped by 18% to US$1.35tn in 2012. Recovery to more vigorous investment levels will take longer than expected, mostly because of global economic fragility and policy uncertainty, UNCTAD's (United Nations Conference on Trade and Development) annual survey of investment trends reports stated today. Developing countries make up four of the top five host economies. Six of the top 10 prospective host countries also come from the developing world, with Mexico and Thailand appearing for the first time. Among developed countries, Japan jumped three positions largely because of reconstruction efforts after the 2011 tsunami, and recent expansionary monetary policies have together increased the country's attractiveness for foreign investment in the medium term. At the same time, Australia, the Russian Federation and the United Kingdom slipped down the rankings from last year's survey, while Germany gained two positions.
Source by Commodity Insights

Hot Commodities: Gold Continues Its Downward Trend, Plummets Under $1200

Gold.......

Gold futures continued its downward trend in the European session today with the precious metal set for solid losses for the month of June.
European stock markets opened higher on Friday, with the week set to end on a positive note, in the wake of soothing comments by U.S. Federal Reserve officials. U.S. sentiment data and another wave of Fed speakers are on the calendar for Friday. FTSE 100 index rose 0.4% to 6,265.15, while the French CAC 40 index rose 0.2% to 3,768.37. The German DAX 30 index rose 0.4% to 8,019.27.
Today, the metal is also under pressure due to gains in the global equity markets. Gold for August delivery is trading down $11.6 at $1,200 an ounce, after having hit an intraday low of $1,179.40. The yellow metal is about to end the month of June down more than $200 an ounce.
Gold prices remained on a downward spiral Thursday, even as three Federal Reserve officials suggested the markets had overreacted after Fed Chairman Ben Bernanke's remarks last week that the central bank may start slowing the pace of stimulus as early as this year.
Such a move would be based on improvement in the economy that's in line with the Fed's forecasts, Bernanke had said. Speculation that the end of Fed stimulus would arrive sooner rather than later hit gold futures hard this month, as so-called quantitative easing has been credited for supporting a rally in gold in recent years.
Wells Fargo Advisors joined the downgrades for gold along with Goldman Sachs, Credit Suisse and HSBC this week. Wells Fargo Advisors cut its year-end target range for gold, saying it now expects to see prices settle at $1,225 to $1,325 an ounce. It has previously expected prices to end the year at $1,475 to $1,525 an ounce.
Gold production in China, the world's largest producer, is expected to rise about 10% this year to a record even as bullion prices slump, the nation's mining association said, according to media reports. The country recorded output of 403 tonnes last year. Production gained 12% in the first four months from a year earlier to 122.89 tonnes, according to the producer-funded China Gold Association.
MCX August gold futures tumbled below Rs 25000 earlier today down nearly Rs 400 per 10 grams. A fall below Rs 24900 may take it towards Rs 24700 levels today.
Source by Commodity Insights

Crude Oil Manages Steady Gains In Global Markets

Oil.......

MCX Crude oil futures traded sideways as a bounce in Indian Rupee from its all time lows near 61 per US dollar undercut the gains in the overseas prices. Modest gains in Asian and European stocks kept crude supported and the WTI futures managed to hit a high above $96 per barrel. The commodity currently quotes at $95.81, up 31 cents per barrel. Prices topped out at their four-month high last week.

Stocks were supported today around the world. US gross domestic product expanded at a 1.8% annual rate in the first quarter, compared with the previously reported 2.4 percent pace, lending a cautionary note on economic recovery. This data could mean that Fed might not act in a very fleeting manner as regards unwinding of its asset buying. In a keenly awaited move, the US Federal Reserve indicated last week that it would begin to taper its bond-buying program later this year. Ben Bernanke, the Fed chief told a news conference that the Fed expects to 'moderate the monthly pace of purchases later this year'.

Meanwhile, oil remains capped on the upside. Concerns over China's economic outlook are also weighing on oil after data last Thursday showed that manufacturing activity hit a nine-month low in June. China's HSBC preliminary manufacturing purchasing managers' index fell to 48.3 in June from 49.2 in May as new orders declined, indicating that the slowdown in manufacturing is worsening.

The US dollar continued to liner around its three week high against the Euro. It oil might not rise much in evening if the dollar continues to hold on. MCX July crude oil futures are quoting at Rs 5786, down Rs 9 per barrel on the day. Prices had rose to a high of Rs 5835 per barrel earlier as the Rupee crumbled towards 61 per dollar.
Source by Commodity Insights

Agri Buzz : India Secure Strong Export Orders At $300 Per Tonne

Riding on the strictest multi-layer quality checks mounted by the Food Corporation of India (FCI), Indian wheat has secured comparatively better price in the international market, with the latest lot up for sale crossing the CBOT (Chicago Board of Trade) price by nearly 50 dollars per tonne.
According to the latest tender opened, India got 300.10 dollars per tonne for the lot offered for export as compared to the July future price of CBOT (260 dollars) as on June 3. About four million tonnes (MT) of wheat, exported so far by the FCI, have got an average price of 311.69 dollars per tonne.
An FCI official said the exports this year have proved that the corporation's wheat has a wider and higher acceptability in the international market. “We got a very good response to our wheat despite a drop in the global demand,” he added.
After a long gap, the government had this year allowed export of 4.5 million tonnes of wheat, thanks to a stupendous rise in the production and the excess stock in the country. Earlier, during 2002-04, India had exported it on a commercial basis. However, prices were not so attractive then.
Of the export target, 4.03 million tonnes has already been despatched. The reserve price for export of the initial lot of 2 million tonnes was just 228 dollars per tonne, while for the second lot it was fixed at 300 dollars per tonne.
“There is a huge demand for our wheat now,” said the FCI official. “We get prices as good as that of Australian Soft Wheat, one of the best in the world. The exports have proved the acceptability of our wheat in the international market,” he said.
The main buyers for Indian wheat are South Korea (10,01,789 mt), Ethiopia (6,80,358 mt), Bangladesh (6,75,432 mt), Yemen (3,06,519 mt), Thailand (2,71,767 mt) and Indonesia (2,10,700 mt). Besides, the buyer-countries also included Sharjah, Dubai, Sudan, Oman, Qatar, Vietnam, Malaysia and the Philippines.
FCI has exported the wheat through agencies like STC, PEC and MMTC. Mundra port in Gujarat handled the largest quantify of export, followed by Kandla — also in the Kutch area of the western Indian state. The main players in the international wheat market are USA, Canada, Ukraine, Australia, Russia and Argentina.
“We have a multi-layer quality check to ensure that the Indian wheat gets a credible brand,” the official explained. “The samples were first sent for tests at the Directorate of Wheat Research at Karnal (Haryana) for chemical parameters. Besides the tests by the buyer-representatives, FCI also made sure of tests to prevent rejection of shipments. We exported the wheat only after the buyers got satisfied themselves about the product.”
He said FCI could secure better price if the handling process was fully mechanised. “Non-mechanisation of the handling process is one factor that makes us uncompetitive in the international market. Otherwise, we get highly encouraging feedbacks from the buyers when we meet them,” he noted.
Source by Commodity Insights

Economic Buzz: U.K Q1 GDP Revised Down To 0.30%

The U.K.'s Office for National Statistics said gross domestic product expanded at a seasonally adjusted rate of 0.3% during the first quarter, in line with expectations and unchanged from a previous estimate.

Annualized GDP grew at a rate of 0.3% in the first quarter, downwardly revised from a previous forecast of 0.6% growth. Analysts expected annualized GDP to remain unchanged at 0.6%.
Source by Commodity Insights