A nosedive in the gold prices provided the main feature of trading on the Mumbai bullion market last week. On the other hand, on paucity of supplies, silver firmed up mid-week but receded later in sympathy with gold.
Activity was moderate in view of the marriage season. According to trade more than 70 tonnes of gold had been absorbed over the country, leaving little stocks at present.
Silver supplies were limited and short at upcountry centres. The gold sentiment had been depressed, mainly due to declining prices abroad.
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After recent small recovery abroad gold had been depressed over the week as the $300 per ounce level has been penetrated, touching recent new low levels. In view of the fall in prices now, the sentiment was further depressed and overseas analysts are predicting a further fall to $290 or even below.
Silver was gradually moving up with a reactionary fall in sympathy with gold. Silver had gone up above $5.60 level but reacted later. In view of the shortage of white precious metals silver is expected to turn bullish anytime. London gold was quoted at $296.55 and silver at $5.26 per ounce last Friday.
Standard mint gold had commenced at Rs 4,090, a previous close and on Monday touched the high of Rs 4,100 on steady foreign advices. However, with the decline in prices abroad values dipped to the low of Rs 4,020 per 10 gms. Gold 22 carat after steady start at Rs 3,780 touched the high of Rs 3,800 but drifted to the low of Rs 3,720.
Ready silver .999 fineness had commenced at Rs 7,240, against the previous close of Rs 7,290 and shot up early in the week to the high of Rs 7,370 but receded in sympathy with gold. Silver .916 fineness after resuming Rs 50 lower at Rs 7,140, went up to the high of Rs 7,270 per kg.
Oilseeds: The deadlock between traders and the authorities continued and hence there was no activity reported in castorseed futures on the Mumbai oilseeds market last week. The sentiment was depressed but spot prices ruled higher. It was painful to note that the exchange was unable to settle the issue at a time when they are preparing for the international trading programme. When internal issues are not resolved it would create wrong impression on the international traders to come forward and enter into commitments here.
In edible oils groundnut oil recovered after initial quietness. According to reports from Saurashtra the NDDB had been in the market supporting the prices and the fall was arrested. Traders would now feel comfortable to make purchases around this level or at slightly higher prices. In view of the heavy groundnut arrivals in Saurashtra the rise in prices could be ruled out at present. However, due to the absence of retail buying at the month-end early groundnut oil dropped to a low of Rs 331, from the previous week-end level of Rs 335 but firmed up later on better Saurashtra advices to touch the high of Rs 338 per 10 kg.
Good supplies of imported palmoleine arrested undue rise in prices of other edible oils.
The demand at week-end was better on apprehension that the agitation by traders would hit supplies in the city and that prices would shoot up. Palmoleine was demanded Rs 3 higher at Rs 276 per 10 kg.
Grains: In the absence of any unloading in the New Mumbai market the stocks of cereals and coarse grains depleted considerably on the Mumbai grains market last week. A paradoxical situation has been reported at consuming and producing centres.
In the absence of fresh supplies prices here had gone up sharply but at the same time declining trend set in at the producing centres. It was indicated that upcountry producing centres were despatching goods to the city to get ready cash and it would now be difficult to get cash for the products at the producing centres, resulting in declining of prices and accumulation of stocks at the producing centres.
According to wholesale traders even retailers were disinclined to lift goods paying higher prices over fears of lootings by consumers.
On and after December 1, all markets would pull down their shutters indefinitely. Also, in the present fluid political situation, the Centre would not have the time to review the situation. Traders are adamant on their agitation for the removal of the service tax from the trade.