Uptrend in gold likely till Diwali festival

Uptrend in gold likely till Diwali festival
Highlights

Hyderabad (NVS): Indeed, it was all gold that glittered throughout the week. Silver too, shined in harmony...

Hyderabad (NVS): Indeed, it was all gold that glittered throughout the week. Silver too, shined in harmony thanks to the incessant fall of the rupee coupled with ‘strictly no mercy towards gold import’ policy of the government. Essentially these two factors were responsible for the all time high price of gold during last two months. By hiking the gold import-duty to ten per cent and also by jacking up the import cost of silver the government can take credit for the resultant significant decline in the trade gap which has widened dangerously during recent times. Following the uptrend in the international market silver also sailed in the same boat as gold.

On the other side, costlier gold at home has cheered up smugglers and hoarders of unaccounted gold. The buoyancy in both the precious metals is expected to continue until Diwali. Therefore, short term outlook for gold and silver is bright. However, technical correction in the second half of September is expected to bring some volatility. Hence, long term investors prefer to wait and watch.

During the week Standard gold (24 carats) appreciated by Rs 2,760 per 10 gm and closed at Rs 31,710 per 10 gm against previous week’s closing of Rs 28,950. Ornamental gold followed the suit and was quoted in the range of Rs 30,980-31,080 per 10 gm from its previous week’s closing mark of Rs 28,270-28,370. Silver also appreciated in tandem by Rs 8,300 (per kg) and closed at Rs 51,300 per kg from the previous week’s closing of Rs 43,000.

The principal commodities such as wheat, maize, jowar and bajra revealed a divergent trend within narrow margins. The trend in chilies, coriander, garlic and ginger was steady. On the other hand, rice, tamarind and cinnamon appreciated due to lower supplies while turmeric with good supplies ruled at lower levels. Tuar, tuar daal and urad and urad daal remained unchanged while moong, moong daal, masoor, masoor daal and gram further appreciated by Rs 20. Sugar and Jaggery remained unchanged.

The common edible oils like groundnut oil, cottonseed oil, rapseed oil and rice bran oil remained unchanged while soyabean oil, kardi oil and vanaspati recorded a marginal appreciation. The outlook for the coming week is moderate to strong undertone in almost all the common edible oils and vanaspati.

During the week the forward march in common vegetables continued unabated. Onion prices spurted nationwide by 100 per cent to 125 per cent. During the week, the overall increase in common vegetables was in the range of 40 per cent to 70 per cent. The NECC eggs gained Rs 3 during the week and closed at Rs 287 per 100 from its previous week closing mark of Rs 284.

Dr HC UPADHYAY

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