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Urad likely to see a dip; gold set to retain sheen

WEEKLY COMMODITIES OUTLOOK

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Ruchi Ahuja New Delhi
Urad: Slight correction seen while rally is expected to continue. Post the Dussehra, prices are set for a minor correction to around Rs 2,220-30 per 100 kg level, analysts said. But the upside December target remains at Rs 2,450-75 level.
 
The correction is largely technical and is likely to continue for 4-5 days just after Dusshera. A Mumbai-based analyst said, "If the prices stay above Rs 2,200 range, the next target would be Rs 2,300-2,400 level."
 
Upside movement, however, is likely to be because of two reasons. First, while quality concerns have abated, the spot market is facing a supply crunch.
 
Arrivals have been almost 50-60 per cent in main areas of Latur, Buldhana, Nanded regions. Also, no major arrivals are slated with rising import prices.Secondly, Myanmar, from where 90 per cent of India's urad imports, will begin supply from mid-January.
 
Gold: Seen up. The yellow metal is glittering and analysts feel that the bullish trend is likely to continue with no major US data, except trade deficit on Oct 13, scheduled for release this week.
 
"The rise this week is of $4-5 an ounce," said V Shivaramakrishnan, an analyst with Karvy Commodities.Domestic prices are looking at targets above Rs 7,200 (per 10 gm) levels, according to an Anand Rathi report.
 
At 1600 IST, overseas spot gold traded at $477.05/477.55 an ounce. Domestic spot gold (99.9 purity) touched an all-time high today at Rs 7,000 per 10 grams (ex-Mumbai).
 
The bullish trend is likely to get support from the festive demand and the rising inflation pressure. "Any possibility of a rise in interest rates by the European Central Bank may also turn out to be positive for gold as it may compel the euro to strengthen against the greenback," a Karvy note said. Buy on dips.
 
Gur (jaggery): Correction likely. After an upward price movement for about a month, prices are likely to see a correction this week. The downward movement is likely to be supported by the fact that new gur arrivals are likely this week.
 
According to an Anand Rathi report, Muzaffarnagar, the largest gur market, is seeing a delay in production this year because of water logging in sugarcane fields and areas around the mills. Last year, the gur production started on September 20 but this year, it is taking over a fortnight to start.
 
Prices were spiralling high as speculators felt a shortage of cane for gur output this year following expansion by mills which may also lead to a price spurt of sugarcane. Gur prices on the Ncdex have flared up over 10 per cent.

 
 

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First Published: Oct 12 2005 | 12:00 AM IST

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