Gold recovers from biggest dip in 5 months after Fed rate rise

LONDON: Gold rose on Friday, recovering from its biggest daily loss in five months as stocks and the dollar retreated, but remained near multi-year lows after the Federal Reservelifted US interest rates for the first time in nearly a decade.

The metal has recovered some lost ground after bottoming out on Thursday at $1,047.25 an ounce, within a few dollars of a near six-year low reached on December 3.

Spot gold was up 0.8 per cent at $1,059.80 an ounce at 1436 GMT, while US gold futures for February delivery were up $9.30 an ounce at $1,058.90.

The rate hike sparked a surge in the dollar and global stocks on Thursday, but led to a 2 per cent slide in gold. Rising rates lift the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.

Gold has tumbled 11 per cent this year as investors awaited the rate rise. Now that it is out of the way, attention is turning to other factors.

"Next year the macro picture is looking a little less negative for gold and precious," Mitsubishi analyst Jonathan Butler said. "It's hard to see, without a significant under-performance in the yen and the euro, how the dollar is going to rally very strongly next year."

"The Fed, from its forecasts, is anticipating four rate rises next year. The markets are saying something different - the Fed funds futures currently suggests there'll be just two rises, in June and December."

In other markets, global stocks fell and the dollar slipped 0.2 per cent, taking pressure off gold.

The metal could revisit $1,000 an ounce for the first time in six years if it breaks below its early December low at $1,045 an ounce, according to technical analysts.

"If we can take the low out, which I don't think is unreasonable, $1,033 is the next stop - that's the high from 2008 - and then $1,006, and the $1,000 figure is really the level you should be talking about," Credit Suisse analyst Christopher Hine said.

"It is achievable (by the end of the year)," he said.

Holdings of the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, fell another 4.5 tonnes on Thursday to 630.17 tonnes, the lowest since September 2008. That brings its monthly outflow to 25 tonnes.

Silver was up 1.5 per cent at $13.90 an ounce, while platinum was up 0.8 per cent at $850.20 an ounce and palladium was down 0.5 per cent at $551.24 an ounce.

Gold / Silver / Copper futures - weekly outlook: October 14 - 18

Investing.com - Gold futures tumbled to a three-month low on Friday, as hopes that U.S. lawmakers would reach a deal on the U.S debt ceiling impasse before the October 17 deadline reduced the safe-haven appeal of the precious metal.  

Some technical selling also contributed to losses after prices fell through key support levels.

On the Comex division of the New York Mercantile Exchange, gold futures for December delivery dropped 1.93% on Friday to settle the week at USD1,271.90 a troy ounce. 

Comex gold prices fell to USD1,259.60 a troy ounce earlier in the day, the weakest level since July 10. The December contract settled 0.79% lower at USD1,296.00 a troy ounce on Thursday.

Gold futures were likely to find support at USD1,242.35 a troy ounce, the low from July 10 and resistance at USD1,311.80, the high from October 10.

On the week, the precious metal lost 2.9%, the second consecutive weekly decline.

House Republicans and the Obama administration began a second day of negotiations on Friday on a deal to reopen the government and raise the U.S. debt ceiling for six weeks.

The federal government has been shut down since October 1. Lawmakers must raise the national borrowing limit by October 17 or run the risk of a U.S. sovereign debt default.

Technical selling also pressured gold after it fell through key support levels close to the USD1,280-level, triggering a flurry of automatic sell orders amid bearish chary signals.

An unusually large sell order at the start of the Comex floor trading session sent prices tumbling by USD30 within a minute, fuelling speculation hedge funds and large institutional investors unwound long positions.

Uncertainty surrounding the Federal Reserve's stimulus program was also in focus.

Wednesday’s minutes of the Fed’s September meeting said the decision not to begin tapering stimulus was a "close call," with all but one voting member opting to leave the program unchanged.

Concerns over economic impact of the U.S budget and debt ceiling impasse fuelled expectations that the central bank will further delay plans to start phasing out its USD85 billion a month asset purchase program.

Data released on Friday showed that U.S. consumer sentiment fell to the lowest level in nine months in October, as concerns over the impact of the government shutdown weighed.

The University of Michigan’s consumer sentiment index declined to 75.2 from a final reading of 77.5 in September, and below expectations for a reading of 76.0.

In the week ahead, investors will continue to closely monitor political developments in Washington. Gold traders will also scrutinize speeches from a number of Federal Reserve officials for clues on monetary policy.

Elsewhere on the Comex, silver for December delivery plunged 2.91% on Friday to settle the week at USD21.25 a troy ounce. Silver prices settled 0.02% higher at USD21.89 on Thursday.

On the week, silver future prices declined 2.29%, the fifth consecutive weekly loss.

Meanwhile, copper for December delivery advanced 0.63% on Friday to close the week at USD3.269 a pound. On Thursday, copper futures rose 0.54% to settle at USD3.248 a pound.

Despite gains on Friday, prices of the red metal declined 0.96% on the week, amid concerns a U.S. government shutdown will create a drag on fourth quarter economic growth.

Official data released on Saturday showed that China’s trade surplus narrowed sharply in September as exports declined unexpectedly, fuelling concerns over growth prospects in the world’s second-largest economy. 

China’s trade surplus narrowed to USD15.2 billion last month from a surplus of USD28.6 billion in August, compared to estimates for a surplus of USD27.7 billion.  

Chinese exports fell 0.3% from a year earlier, defying expectations for a 6% increase and following a 7.2% gain in August. 

Market players now looked ahead to a raft of Chinese economic data later in the week, including reports on inflation, gross domestic product, industrial production and retail sales.

The Asian nation is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

http://www.investing.com

Silver futures down 0.63% on lower global trend

NEW DELHI:

 Tracking a weak global trend, silver prices moved down by 0.63 per cent to Rs 51,450 per kg in futures trade today as speculators offloaded their positions.

At the Multi Commodity Exchange, silver for delivery in May moved down by Rs 325, or 0.63 per cent to Rs 51,450 per kg in business turnover of 5440 lots.

Similarly, the white metal for delivery in July declined by Rs 313, or 0.59 per cent to Rs 52480 per kg in 342 lots.

Market analysts said speculators offloaded their positions in tandem with a weak global trend, that mainly pulled down silver prices at futures trade.

Meanwhile, silver fell by 1.18 per cent to $ 27.65 an ounce in New York last night.

Silver Wheaton Corp’s net earnings rise 92% on record production

Silver Wheaton Corp (TSX:SLW, NYSE:SLW) has reported record revenue, earnings and operating cash flows on record production of silver at 25.4 mn silver equivalent ounces (24.6 million ounces of silver and 18,400 ounces of gold) , a 7% gain compared to 2010.

The company reported that revenue increased 73% compared to 2010, to US$730.0 million, on silver equivalent sales of 21.1 million ounces (20.2 million ounces of silver and 18,300 ounces of gold).

Peñasquito mine was the primary driver of our production growth, as the mine continued its ramp up to full design capacity of 130,000 tonnes per day. Silver Wheaton's 2011 attributable silver production from the mine was 5.3 million ounces, an increase of 39% compared to 2010.

"Silver Wheaton finished 2011 with its strongest ever quarter of production and sales," said Randy Smallwood, President and Chief Executive Officer of Silver Wheaton. "We are proud to have now grown for three consecutive years, and in 2011 we achieved record annual production levels of over 25 million silver equivalent ounces. The combination of increased silver equivalent sales and strong silver prices also generated record financial results including revenue, earnings, operating cash flows, and cash operating margins which increased a tremendous 82% to US$30.61 per ounce of silver."

"The exceptional growth in cash flows allowed us to initiate an inaugural dividend, which grew threefold by year-end, and positions the company to quickly capitalize on new acquisition opportunities. We are now stronger than at any other time in our company's history, and more capable than ever of helping mining companies achieve their production and expansion goals by providing value-enhancing silver streaming funding. And, with low fixed costs, an exceptional production growth profile, and more silver reserves than any other silver company in the world, we believe we offer the premier investment vehicle for silver investors worldwide."

2012 Outlook
-Goldcorp Inc.'s world-class Peñasquito mine is forecast to achieve full production capacity of 130,000 tonnes per day by the end of Q1 2012. This cornerstone asset is poised to become our largest contributor of silver and will drive our production growth in 2012. As a result, Silver Wheaton anticipates a 6% increase in its 2012 attributable production to approximately 27 million silver equivalent ounces, including 16,500 ounces of gold.
-Given the Company's unique business model of essentially fixed cash costs2, average cash costs in 2012 are estimated to be approximately US$4.071 per silver equivalent ounce, virtually unchanged from 2011.
-Executing on its growth strategy of acquiring additional value-enhancing silver and precious metals streams will remain Silver Wheaton's top priority in 2012.

Gold and Silver, Are you buying the weakness or selling it ?

Gold and silver appear to have bottomed yesterday on good ‘ole turn around Tuesday. Greece’s drama is just drama thatvleads to fear, but always moves forward. Greece has given traders one of the best opportunities for buying in the past 9 months. Each time Greece’s problems scare the weak hands it allows the stronger players to pick up great positions to sell into strength.

The 4 hour chart of gold shows the downtrend line being broken which usually indicates the fear selling has abated. A stop under yesterday’s lows would be a great strategy.

Silver is in the same position.

Plus, the US dollar appears to be running out of steam as there is negative divergence in the stochastic indicator as it made a lower high while prices made a higher high. This points to weakness in the rally. Below is the 4 hour chart.

And add to the fact that Warren Buffet agrees with the gold community’s reason for higher prices in gold by stating this in his newsletter:

“In the U.S., where the wish for a stable currency is strong, the dollar has fallen a staggering 86% in value since 1965, when I took over management of Berkshire. It takes no less than $7 today to buy what $1 did at that time.

In God We Trust may be imprinted on our currency, but the hand that activates our Government’s printing press has been all too human. High interest rates, of course, can compensate purchasers for the inflation risk they face with currency (dollar) based investments, and indeed rates in the early 1980′s did that job nicely. Current rates, however, do not come close to offsetting the purchasing power risk that investor’s assume. In other words, the interest rates in today’s money market accounts are not enough to offset inflation. You can’t see it, but due to inflation, if you leave cash in the bank, you will lose money every year. Investing in domestic money market accounts these days is like keeping your money under the mattress. It’s financial suicide. You don’t have to settle for that.”

Everyone please remember that gold and silver are in a BULL market which, by its very nature, is going to attempt to throw you out of your position. The best approach for many of you who write each time that a correction is occurring is twofold:

1) Don’t use margin and buy instruments like physical, non-leveraged etfs and mining shares with strong management teams.

2) Turn off your computer and stop checking your accounts for 1 week after the correction begins.

This bull market will continue until one thing changes. It will come to an end when central banks worldwide stop printing money and raise interest rates. This event is yet to occur.

Buy on weakness. Sell into strength. So simple.

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Silver antiques generate huge response at Pennsylvania auction

DENVER (Commodity  news world ): Silver antiques stole at the show at the recent Pennsylvania auction in which four pieces of circa-1882 Tiffany silver hammered nearly a quarter-million dollars.

Offered consecutively, a pair of sterling candelabra sold for $111,600 against an estimate of $60,000-$80,000; followed by a pair of silver bowls that were bid to $134,000 – more than twice the high estimate of $60,000. All four pieces exhibited the impeccable artistry for which antique Tiffany silver is so renowned.

"We knew the silver was special and of fantastic quality. There was tremendous interest, both before and during the auction," said Morphy Auctions CEO Dan Morphy. "Even when the bidding on each of the Tiffany lots reached $80,000, there were still four active players, and at $90,000, there were three."

The two-day auction of antiques, art and vintage collectibles drew 1,800 unique bidders and grossed $1,620,000, with the aforementioned Tiffany pieces earning $246,000.

After the auction, Morphy received several calls from silver aficionados who told him the candlesticks had easily outperformed an identical single example that appeared in a high-profile auction last year. "Apparently one candelabrum exactly like those in our auction sold for around $20,000 at one of the big New York auction houses several months ago. They're obviously much more desirable as a pair."

In counterpoint to the fine silver was the lifetime antique armor collection consigned by Hollywood animator and film directorFrank Andrina. "Armor is very much a European-based collectible. We were anxious to show that we could tap into the international market. As it turned out, many bidders were European, and during both the silver and armor sections of the sale, there were sometimes 14 and 15 phone lines in use," Morphy said.

A circa-1580 German two-handed sword easily exceeded expectations at $21,600; while a circa-16th-century mace constructed entirely of hand-forged steel doubled expectations at $16,800. An Italian or German Savoyard-style helmet with cut-out holes for the eyes was expected to reach $4,000-$8,000 but went the extra mile to $15,600.

Antique and vintage guns attracted so many potential bidders to the sale that both parking lots were filled to capacity. An immaculate early to mid-19th-century Leonard Reedy Kentucky rifle sold for a staggering $76,800; a powder horn from the French & Indian War made $21,600 against an estimate of $400-$800

 This is WebStory!

Copper Has Longest Bull Streak Since October

Copper traders are bullish for a fourth consecutive week, the longest streak since October, as manufacturing strengthens from China to the U.S. and stockpiles decline to the lowest in more than two years.
Thirteen of 29 analysts surveyed by Bloomberg expect the metal to gain next week and six were neutral. Inventories tracked by the London Metal Exchange fell to 289,000 metric tons today, the lowest since August 2009, and orders to withdraw more metal are at an almost eight-year high, bourse data show.
Manufacturing from China to the U.S. is expanding as the American recovery strengthens and European leaders work to contain the region’s debt crisis. That’s boosting demand for raw materials from consumers and investors, with Barclays Capitalpredicting a third consecutive annual shortage in global copper supplies in 2012. Commodities beat stocks, bonds and the dollar for the first time since July last month.
“People feel that the U.S. is on a gradually improving trend and overall the tone is better,” said Carole Ferguson, an analyst at Fairfax IS in London. “If you get a demand-led story in copper then it can rally again. It’s supported by the long-term supply and demand picture.”
Copper rose 13 percent to $8,585 a ton this year on the LME, the best start to a year since 2008. The Standard & Poor’s GSCI gauge of 24 commodities climbed 9.1 percent and MSCI All-Country World Index (MXWD) of equities advanced 11 percent. Treasuries lost 0.5 percent, a Bank of America Corp. index (MXWD) shows.

Manufacturing Gains

China’s manufacturing expanded for a third month and at a faster pace in February, the statistics bureau and logistics federation said yesterday. An Indian purchasing managers’ index released by HSBC Holdings Plc and Markit Economics was near an eight-month high. A U.S. factory index showed growth last month, the Institute for Supply Management said yesterday. China consumes about 40 percent of the world’s copper and North America accounts for 11 percent of demand.
Investors are increasing bets on higher prices on mounting confidence the world will skirt another recession. About $300 million was added to wagers on industrial metals in January, taking the total across commodities to $3.7 billion, Barclays said in a Feb. 29 report. Open interest, or contracts outstanding, across 24 commodities tracked by Bloomberg rose 3.3 percent last month, extending a 9.3 percent advance in January, the first back-to-back monthly gains in a year.
Copper consumption will outpace supply by 376,000 tons this year and there will be another shortage in 2013, Barclays predicts. London-based Rio Tinto Group (RIO), the world’s third-biggest mining company, said Feb. 9 its mined copper output fell 23 percent last year because of lower ore grades.

ECB Loans

Slower growth in Europe may curb manufacturing and weaken construction, which accounts for about 40 percent of copper demand, according to the Copper Development Association. Euro-area manufacturing shrank for a seventh month in February, London-based Markit Economics said yesterday. The European Central Bank awarded 529.5 billion euros ($706 billion) in three-year loans to 800 European banks on Feb. 29, after supplying 489 billion euros to 523 institutions on Dec. 21.
There’s “less enthusiasm associated with the European longer-term refinancing operation,” said Bart Melek, the head of commodity strategy at TD Securities Inc. in Toronto. “Copper should correct next week as prices are likely higher than the fundamentals imply.”

Bernanke Comments

Copper slid 1.2 percent on Feb. 29 after Federal Reserve Chairman Ben S. Bernanke gave no signal that the central bank will take new steps to boost liquidity. He described “positive developments” in the job market while saying it’s still “far from normal” in testimony to lawmakers. Signs that growth prospects are improving in China may mean the government there will refrain from more monetary easing.
Hedge funds and other money managers cut bets on higher copper prices by 11 percent to 13,260 futures and options in the week ended Feb. 21, the first decline in six weeks, Commodity Futures Trading Commission data show. Speculators held wagers the week before at the highest level since August.
The metal’s 14-day relative-strength index is at 57.8. A level of 70 indicates to some analysts who study technical charts that a drop in prices may be imminent and a figure of 30 suggests a rebound may be due.

Gold Survey

Twenty-one of 32 traders and analysts surveyed by Bloomberg expect gold to gain next week. Futures on the Comex in New Yorkplunged 4.3 percent to $1,711.30 an ounce on Feb. 29, and gained 9.2 percent this year. It is in the 12th year of a bull marketand holdings in gold-backed exchange-traded products stand at a record 2,404.2 tons, data compiled by Bloomberg show.
Eight of 13 people surveyed expect raw-sugar prices to decline next week. The commodity climbed 7.2 percent this year to 24.98 cents a pound on ICE Futures U.S. in New York.
Fourteen of 22 people surveyed anticipate higher corn prices next week, while the same amount said soybeans will climb. Corn rose 0.9 percent to $6.525 a bushel this year as soybeans advanced 10 percent to $13.295 a bushel.
“With the second LTRO completed and considering Bernanke’s comments, monetary policy will in all likelihood become less of an immediate market driver going forward,” said Michael Widmer, the head of metals research at Bank of America Merrill Lynch in London. “The extent to which the rebound in the U.S. can be sustained may have more of an influence.”

Gold survey results: Bullish: 21 Bearish: 8 Hold: 3
Copper survey results: Bullish: 13 Bearish: 10 Hold: 6
Corn survey results: Bullish: 14 Bearish: 5 Hold: 3
Soybean survey results: Bullish: 14 Bearish: 6 Hold: 2
Raw sugar survey results: Bullish: 4 Bearish: 8 Hold: 1
White sugar survey results: Bullish: 4 Bearish: 7 Hold: 2
White sugar premium results: Widen: 5 Narrow: 5 Neutral: 3

http://www.bloomberg.com/news/2012-03-02/copper-bull-streak-extends-to-longest-since-october-on-demand-commodities.html

Silver on the upswing as gold-to-silver ratio moves down

The gold-to-silver ratio has reached its lowest level in five months and the downturn could “signal a reemergence of the long-term trend” of rising silver prices in relation to gold, said Matt Insley, editor of the Daily Resource Hunter.

The gold-to-silver ratio has reached its lowest level in five months and the downturn could “signal a reemergence of the long-term trend” of rising silver prices in relation to gold, said Matt Insley, editor of the Daily Resource Hunter.

The gold-to-silver ratio is close to 48, after hitting a high of over 80 in 2008, he said.

Silver futures posted a climb of 6.4% last week, outpacing gold’s GCJ2 2.9% week-on-week rise. Silver settled Tuesday at $37.14 an ounce in New York, while gold finished at $1,788.40 an ounce.

The metal has been “on the upswing” for the past couple of weeks, said Jeffrey Wright, senior analyst of metals and mining equity research at Global Hunter Securities.

The rise in partially related “to gold moving higher on U.S. fiscal deficits and the Obama administration’s refusal to address this mounting burden, Fed monetary policy, euro-debt crisis concerns, but also on signs of industrial demand for physical silver being strong in Q4 2011 and continuing into the present quarter.”

Silver prices could move higher in the weeks to come, he said, and won’t likely see any demand-side destruction until they reach the $45 range. So the the long-term trend for the metals points to return to the “naturally occurring” gold-to-silver ratio, said Insley.

“The naturally occurring ratio of gold to silver in the earth’s crust is 17:1, so there’s still plenty of room for silver to move higher. I believe that’s where we’re headed,” he said.

“For the price of silver to meet that naturally occurring ratio today, we’d be looking at silver over $100 an ounce. That’s a 170% increase from today’s price of $37 an ounce,” Insley said.

India again hikes gold, silver tariff value

According to an official data, gold's tariff value was raised to $573 per ten grams while that of silver raised to $1145 per kilogram.

 NEW DELHI(commodity news world): World's largest gold consumer, India on Thursday raised tariff value of gold and silver.

According to an official data, gold's tariff value was raised to $573 per ten grams while that of silver raised to $1145 per kilogram.

Brass scrap tariff value was also raised to $4143 per ton according to the notification issued by country's Central Board of Excise and Customs (CBEC).

These revised rates will also apply to gold and silver, including ornaments that are not studded, that are imported by a bonafide passenger as baggage.

India enhances import tariff value of gold to $573, silver to $1145

NEW DELHI (Commodity news world ): India Government has enhanced the import tariff value of gold from $526 per 10 grams to $573 per 10 grams while the value was enhanced from $953 per kg to $1145 per kg for silver imports.

This was announced in notification by Central Board of Excise and Customs (CBEC) under Ministry of Finance issued on February 29, according to an official release. In January this year, the government had notified ad valorem based import tariff for gold and silver at 2% and 6% respectively as against the previous flat rate of Rs 300 per 10 gm and s 1500 per kg respectively fo gold and silver.

Increase in tariff value and tariff was effected with the twin objective of preventing under-invoicing of imported precious metals and discourage import of gold to ease pressure on balance of payments. After crude oil, gold is the most imported commodity in India in terms of value.

However, the recent hikes in tariff value were opposed by bullion traders and jewellers as it would reduce demand as the increased costs have to be passed on to consumers. The current wedding season in India which began in mid-January and lasts till May has seen a drop in jewellery sales due to depreciation of rupee and higher import costs of precious metals.

Commodity Outlook for early 2012: Base metals sluggish, Silver, Oil moderately bullish

Volatility will continue in commodities and equities but commodities will continue to outperform other asset classes.  The markets will be impacted by the Eurozone crisis, US financial crisis, already the United Nations has signaled a global recessionary threat in 2012-13.

Recently, central banks in China and some European countries have lowered their interest rates, focusing on growth, which augurs well for commodities.

Commodities witnessed  $10 bn outflow of fund money in September but rebounded with $2.1 bn inflows in October. The outlook is still mixed for most commodities although precious metals may perform better in 2012.  Commodities witnessed in January to April – net inflows of $24 bn (Compared to January –April 2010 inflows of $16 bn)
May to October 2011- Net outflow of $8.5 bn. May saw acute market volatility due to strengthening of Eurozone debt worries, US financial crisis.

Rupee depreciated 17.4% in 2011 against US Dollar , Euro, GBP fell by 5.3%-- to impact India’s imports, inflation and commodity markets. Domestic inflation may sustain on higher imported cost of oil, coal, metals, minerals. Export oriented IT, textiles to benefit.

Indian commodities
Falling financial institutional infows (FII) inflows suggest weak outlook on Indian economy, Foreign Direct Investment (FDI) inflows less volatile to Eurozone worries.

Key points: Rs 115 lakh crore turnover in commodity futures trading in 2010-11 representing 50 % growth  The cumulative value of trade from 1st April, 2011 upto 31 st  October, 2011 for the financial year 2011-12 was ` 106, 36,960.76 crore.  Commodity trading volumes in India have risen close to 70% in April to November 15, 2011 at  Rs 113 lakh crore compared to Rs 67.11 lakh cr in corresponding period last year.

It is observed that at least 20 per cent of capital market traders have added commodity to their trading pattern and out of them at least 7 per cent have shifted completely to commodities from equities. (based on three years of data collection by Commodity Online)

Gold Outlook: To touch 28700 by the end of  2011, 32500 by 2012
Gold will trade positive in 2012 driven by central bank buying, India China consumption, global macro-uncertainties and higher investment demand especially through exchange traded funds (ETFs).

Gold prices surged 28% to $1923.70 in September in 11th year of bull run and with US interest rates close to zero and continuing Eurozone debt crisis  that adds to the safe haven appeal of gold.  Gold has surged 38 percent this year, touching a record 29300 rupees per 10 grams in Indian market.  Weak rupee may provide further support for prices. Commodity Online Research expects gold to touch Rs 28700 per 10 gms by end of this month and Rs 32,500 by 2012.

Gold  held in ETFs globally has climbed to a record 2,358.206 metric tons on December 6.

Global gold demand in third quarter of 2011 was strong at 1,053.9 tonnes, an increase of 6% compared to the same period last year. This equates to US$57.7bn, an all-time high in value terms. This increase was driven by investment demand which rose by 33% year-on-year to 468.1 tonnes, generating record quarterly demand of US$25.6 bn. Healthy growth in jewellery demand and modest gains in demand from the technology sector were offset by a year-on-year decline in investment, principally from ETFs and similar products.

In India, latest industry report indicates that the average assets under management for Gold ETFs is more than Rs. 9000 Crores which indicates that Gold is emerging from the shadows of equity and debt with an identity of its own as a preferred investment opportunity.

Gold has risen 20 percent annually in the past four years. In 2011, Gold has given highest return of more than 35 percent in last 10 years. This year closing prices are expected in range of 28700-900 rupees. In 2012, first quarter, gold to touch Rs 31,600 per 10 gms.

Downside momentum is expected till 28200.  Support – 26500, 27300, 28500 .Resistance – 30200, 31500, 32600.Recommendations : Buy Gold in range of 28500-28600 SL 27200. Target 31300, 32700

Silver to be moderately bullish
Silver prices may witness moderately bullish trends in 2012 on global macro-economic uncertainties and possible fall in industrial demand for the commodity. Investment demand may gain especially in India where the demand usually comes from farmers and rural households who store their savings in Silver bangles and coins. Depreciating rupee may weaken demand for precious metals as import costs rise. Higher prices may act as deterrent for buying in India.

In 2010, silver futures have outperformed all base metals and bullion commodities giving a return of 73%.  Current market prices are trading in range of 55000-57000 rupees per kilogram in India.

Silver is also having direct relationship with Euro and inverse relationship with US dollar, as the movement of EURO is generally moving in negative direction with US dollar and most of the other currencies, we may face zig zag movement in the prices of silver.

MCX Silver will trade positive at 58526 levels in the coming weeks could rise to Rs 64000 per kg by February if it breaks Rs 60,000 levels or else it could fall to Rs 46000.

Silver futures climb to more than 56 percent to 73600 rupees per kilogram. After touching all time high levels, Silver dips to 46000 rupees as Euro zone debt crisis fear market condition. Silver move downside along with base metal complex.

Overall view for Silver is moderately bullish for coming year. Short term bearishness can be considered as buying opportunity to buy this white metal at dip. As the world economy worsens, its affects Industry demand for Silver. In case, down-trend continus,  then Silver may touch bottom levels of 48000 and 42000 rupees in coming months. Supportive micro economical data will help Silver to move higher till 62000. Looking at the current market, we don’t expected much space in upper range for now.

Support : 48500, 52000, 55000
Resistance : 58000, 60000, 62500
Recommendations : Buy Silver in range of 51000-52000 SL 47000 Target 58000, 61500

Crude Oil
Crude oil prices may continue to remain bullish at the start of 2012 on geo-political tensions and possible production cuts by OPEC to be announced on December 14, 2011.  Libyan production has resumed and is expected to come back to 1.6 mn barrels per day by end of 2012, but is still lags behind pre-civil war levels.  Global oil demand is expected to decline on Eurozone debt crisis, US financial crisis and weakening of growth in emerging economies.

Hence, Crude Oil prices will trade in positive territory. MCX Crude Oil futures outlook is positive and may climb to Rs 5360 to Rs 5500 per barrel.

Base Metals to remain sluggish in 2012
Base metals will remain sluggish on slower rate of growth reported in China and Japan, the leading consumers of metals.  In India, higher inflation rates, lower IIP data and lower GDP growth is dampening the base metals market.

The ongoing Eurozone sovereign debt crisis and tighter Chinese monetary policy appear to have also had an impact on demand and confidence.

LME Copper is down 18 percent this year, and is headed for its first annual decline since 2008 when a financial crisis tripped the global economy, with demand from top copper consumer China also far from aggressive. Aluminium capacity is being idled on lack of demand and higher energy curbs in China.  Nickel   has fallen significantly in 2011 among the all base metals from its high due to increasing concerns of global economy,low demand and increasing LME stocks.

Nickel will remain bullish for coming sessions and its expected to touch the level of Rs. 1006 which is expected to touch within couple of months.

Lead market is balanced in demand and supply scenario but goiing ahead into 2012 it we believe that supply side would be steadily increasing yet structural change announced by Chinese government should be watched properly as mojor Lead producers are being stopped.

Agriculture
In the agri front, some commodities have shown immense potential in its movement in Futures market while it has also given marginal profit to producers and farmers as well. Take for instance Guar Seed, the prices of which may extend the gains in near term on expectation of lower output in 2011-12 and lower carryover stocks along with robust export demand.

At the same time a commodity like Cardamom has prices have falling by Rs.670 per k.g – from 1580 to 609 -almost 170% down from last year closing. Higher production, and some carryover stocks are some of the reasons for downside in Cardamom.

Rubber prices have shown a firm trend in recent times and rising Crude Oil prices and adverse weather in Thailand had given support for prices. The Indian tyre industry demand for further import at concessional or zero duty has been ruled out by Finance Ministry which allowed 40,000 tonnes at concessional rate of 7.5%. China buying in January may push prices. Indian prices are consolidating at 20,000 levels and is looking for fresh triggers for upside gains.  With a deficit of 75,000 metric tonnes forecast and growth in production of 2.5%, consumption by 2.5%, Rubber prices seem well supported at current levels.

In Pepper, domestic demand is moderate to strong and arrivals are weak these days. In long term, technically the break out of 37300 will take price higher to 39600 if volume supports. While in short-term the prices of future are expected to trade positive. Futures traders can enter into buying positions.

Strategic decisions in moving commodities can bring gains to Futures traders while in the case of physical traders, lack of storage facilities have put them in a dock to store agri commodities. Most traders in north are buying agri commodities and is taking advantage of the mushrooming cold storage facilities from Jaipur to Delhi corridor to store them for two to three years.

According to Futures Industry Association (FIA), number of contracts traded globally in futures and options is higher in agri-commodities compared to metals, energy and other categories.

curtsey  www.commodityonline.com