Both the precious metals ruled weak on the Mumbai bullion market last week. Easy overseas advices coupled with heavy inflow of both white and yellow precious metals depressed the sentiment.
Demand for the marriage season was below normal. However, the liberalisation of official imports in gold from 5 kg to 10 kg by non-resident Indians and more imports under the Special Import Licence scheme resulted in easier supply position.
Values have been lower especially due to the weakness in prices abroad. The supplies are expected to be good during the current demand season. There has been resistance in both gold and silver on every rise in advices from abroad. Traders fear more sale of gold by the central banks of Europe. Coupled to this is the fact that demand has not picked up. Dollar has strengthened and landing rate has been increased to arrest inflamatory trend of prices.
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Gold, once again, has, at times, dropped to below $340 per troy ounce. Silver, too, has been offered at a lower rate of $4.74 per troy ounce. In case the central banks of Europe take up any further sale of gold, the prices may go down below the level of $336 per troy ounce. Foreign traders have been demoralised due to persistent bearish sentiments and falling price levels. It was indicated that the inflow of gold had been more pronounced in view of the weaker trend abroad. Recently, about 100 kgs of gold had been reportedly seized at various places in the country. On account of weakness abroad, gold prices drifted over the last week dropping below the Rs 4,800 mark. Silver was below the Rs.6,900 mark. Standard mint gold commenced last week at Rs 4,830 against the previous close of Rs. 4825. In the absence of high seasonal demand along with fairly good supplies, the opening rate became the high point of the week. As the week proceeded, values dropped below Rs.4,800 to Rs.4,780 and finally closed at Rs. 4790 per 10 gms.
Gold 22 carat fluctuated between Rs.4,470 and Rs.4480. Silver .999 fineness resumed Rs.15 higher at Rs.6950, and gradually dropped to the low of Rs.6810.
Oilseeds: Mixed tendencies were seen in the Mumbai oilseeds market last week. Castorseeds futures and spot prices were easy while prices of edible oils moved up. In view of increased imported arrivals, there was a lot of pressure on offerings.
Despite bold measures announced by the Reserve Bank of India in its slack season credit and monetary policy, the commodities markets were faced with an acute financial crunch. There was little enthusiasm in extending commitments due to paucity of funds and undue delay in clearing payments.
The inflow of castorseeds from Gujarat and Hyderabad has been fairly large while receipts of groundnut oil from Saurashtra has been on the decline resulting in the upward movement of groundnut oil prices. Supplies of cottonseed oil has also been on the decline. Receipts of rapeseed has been slow and oil prices would gradually increase in the coming days.
In edible oils, groundnut oil has been ruling at high levels due to limited supplies. However, the demand for it has been affected as supplies of imported oil has been huge. After touching a low of Rs. 368, it rose to close at Rs.372.
Grains: A further firmness in the markets helped prices of different pulses to be on the higher side. With the stoppage of activities in Punjab for a week by the farmers, the supplies of wheat from that state has come to a standstill. However, with inflows from Gujarat and Madhya Pradesh, the prices were steady. The demand has been moderate, and the recent hectic purchases after the transporters' strike is over. Trading has gone back to the normal mode.
Inferior Gujarat and Mahar-ashtra wheat ruled at Rs.700-800 and superior MP-147 was quoted at Rs.800-900. Sihori pissi was in demand at Rs. 1,000-1,250 per quintal. Gram desi firmed up at Rs.1,400-1,500. Gram dal desi was quoted at Rs.1,700-2,000. and Kabuli at Rs.1,600-1800.
The sentiments in the wheat market was uncertain because of the situation in Punjab. However, with the inflow of imported wheat, the prospects of any rise in prices is ruled out.
Wheat ruled steady to slightly better with fresh supplies from the Food Corporation of India. Now, traders are keenly awaiting fresh supplies from the North. Farmers in Punjab had decided not to sell their wheat for a week to the procurement agencies and in the open market to protest against the low levels of bonus announced by the government on wheat prices. Last year's experience of cotton farmers of Punjab seems to be serving no lesson for wheat farmers. Punjab cotton traders had refused to effect deliveries in the last season and pushed up prices. However, they had to repent later when prices fell drastically. If the current agitation in the wheat market continues, the same fate can be expected because prices will fall on increased imports.
Activity in rice and coarse grains was moderate. The demand for bajra is also poor due to the summer season.
Among pulses, gram deshi shot up further as reports of fall in crop has been coming in from all over the country. Prices were on the rise at the producing centres. Gram deshi firmed up at Rs.1,400-1,500. Gram dal deshi was quoted at Rs.1,700-2,000 and Kabuli at Rs.1,600-1800.
Moong fetched Rs.1750-2000. Moong dal was quoted at Rs.2200-2500. Urad (old) sold at Rs.1,300, (new) Rs.1,400 and Urad dal sold at Rs.2,200-2,400. Peas (green) ruled better at Rs.1,421 and white at Rs. 1,125-1,150. Tur (old) was quoted at Rs. 1,200, (new) Rs.1,300, and tur dal was sold at Rs.2,200-2,700 per quintal.
Paucity of funds continued to afflict the grains markets.