With the end of marriage season demand, both the precious metals ruled easy on the Mumbai bullion market last week. Recent heavy supplies of gold by sea adversely affected the sentiment and values started dropping as fresh buying support was lacking.
Silver dropped below the Rs 6,800 mark, despite limited fresh arrivals. Even upcountry centres lacked fresh demand and it seemed seasonal demand had already faded out.
Besides, it was uncertain how gold prices would move overseas. Earlier, it was felt the 340 per ounce level would not be broken. Even silver overseas had drifted lower. London Gold price had once again approached the $340 per ounce level and resistance at lower levels was poor. Demand from India is likely to drop in next two months.
There was no immediate threat of gold sale by the Central Banks in Europe or any decision by the world bank to sell the metal in the market.
Despite earlier strength, silver too started declining to low levels at $4.74 per troy ounce. Foreign markets witnessed a recent spurt in prices of platinum and palladium, which was short-lived. Both the precious metals were dragging from the recent higher levels.
Once gold drifts below the $340 per ounce level, a further fall cannot be ruled out. Silver was still above the previous low levels and would attract support at lower levels. Standard mint gold commenced last week at Rs 4,680, but on limited fresh buying support values ruled steady for the first two days. But, with lower demand overseas, stockists turned active sellers.
It touched the low of Rs 4,630 to end at Rs 4,645 per 10 gms. Gold 22 carat fluctuated between Rs 4,330 and Rs 4,280. Gold official biscuits lost Rs 500 at Rs 54,300 per 10 tolas. Ready silver .999 fineness started lower by Rs 20 at Rs 6,830, recovered to Rs 6,840, but dipped to Rs 6,695 and ended at Rs 6,710 per kg.
Oilseeds: After mid-week quiet, castorseed futures rallied on the Mumbai oilseeds market last week. With the entry of bulls coupled with higher Ahmedabad advices, sentiment changed for better and bears were forced to rush for coverings. It was indicated that the Chinese delegation visiting the Gujarat producing centres had purchased castor oil.
Export commitments of about 6,000 tonnes were finalised with European exporters.
This brightened the dismal situation in castorseed and castor oil exports. More fresh commitments are likely to follow.
However, the restraining factor was the lower price realisation. Hence, exporters were benefited only to a small extent. In edible oils, groundnut oil was on the losing side due to quiet advices from Rajkot. It was difficult o clear the inflow at higher levels, mainly because of the heavy imported supplies of palmoleine and sunflower oil. Malaysian palm oil advices were discouraging.
Castorseed June attracted no trading for about three weeks and last business took place at Rs 1,082 on May 23. No orders were reported at the beginning of June.
The September contract commenced last week at Rs 1,246.50 and in early deals, prices dropped to Rs. 1,136.50. On reports of export commitments with China for castor oil, Ahmedabad prices shot up and fresh bull support was witnessed.
With fresh commitments from Europe, the contract turned bullish with prices touching Rs 1,162 to be finally placed at Rs 1,154. Ahmedabad prices were ruling Rs 20 higher than in Mumbai.
Ready castorseed Madras small was up Rs 5 from the opening low level to close at Rs 1,099 per quintal. Castor oil commercial recovered from the Rs 247 level. The inflow in Gujarat averaged about 15,000-17,000 bags a day. With the start of monsoon, supply would drop. In edible oils, groundnut oil started the week Rs 2 lower at Rs 360 and on sluggish demand coupled with weaker Rajkot advices, drifted to the low of Rs 354 per 10 kg. Arrivals were good at 75 tonnes a day. Palmoleine was quiet following weakness in the Malaysian palm oil market.
Grains: An easier trend persisted on the Mumbai grains market last week with demand at a very low ebb. Arrivals were on the rise with an acute shortage of funds affecting the meagre turnover. Godowns were full with imported pulses, whose prices were sliding.
From the recent high levels, many pulses declined to Rs 200-250 per quintal.
Even then demand was eluding the sellers. Even in cereals, wheat drifted further under pressure of supplies from Punjab and Rajasthan, where crop was larger.
Prices ruled steady for rice on expectation that the Union government would permit import of broken rice. Basmati prices ruled firm. In coarse grains, bajra firmed up on limited supplies. With the monsoon, demand would increase.
Wheat drifted further as Punjab wheat receipts rose, while demand was limited. Punjab moist inferior varieties dropped further to Rs 525-550. Only small quantities of superior varieties were received and fetched Rs 580 - 600.
Ganganagar wheat was demanded at Rs 700-800 and MP 147 at Rs 600-800 per quintal. Shihori pissi was lifted at Rs 700-1,200 according to quality. However, demand was at a low ebb.
The sentiment was depressed due to paucity of funds.
Activity in rice was at a low ebb. In the absence of permits, SLO inflow from the border areas were reported and were sold at Rs 900-975 per quintal. Basmati fetched Rs 3,800-4,300. Gujarat-17 was quoted at Rs 1,600-1,700 and kolam at Rs 1,700-2,100.
In coarse grains, bajra firmed up as supplies from Gujarat dried up and only small quantity arrived from UP, which was sold between Rs 700 and Rs 1,000. In jowar, Sholapur jowar was quoted at Rs 650-900 and H-5 at Rs 525-575.
Among pulses, gram, moong and tur receded further. Gram deshi was quoted at Rs 1,225-1,250, gram dal at Rs 1,500-1,700 and kabli gram at Rs 1,250-1,400. Moong fetched Rs 1,400-1,700 and tur old was quoted at Rs 1,000, while new ruled easy at Rs 1,075-1,000. Tur dal was sold at Rs 1,900-2,300. Masoor was offered at Rs 1,400-1,500 and masoor dal at Rs 1600-1800 per quintal.
