Precious metals are rallying, going against the conventional wisdom that US Fed’s tapering of QE will be bad for gold and silver. continued expansion of the global economy is driving up bullion prices. The latest US data showed a better-than-expected retail sales and jobless claims data. Bullion prices are also rebounding because of excessive pessimism that had gripped the precious metals last year. Over the past 10 days, silver prices on the MCX fell 2.63%, to Rs46,771/kg on 12th March from Rs48,035/kg on 3rd March, but seem poised to rally.
Oil prices have been trading in the negative over the past few trading sessions mainly due to a slew of data releases from China showing distress signs in the economy. Along with this, with the tension brewing again in Ukraine ahead of referendum in Ukraine’s Crimea region, investors have become wary. On the MCX, crude prices have fallen 1.6%, to Rs6021/bbl (barrel) from Rs6,119/bbl for the week ended 13th March.
Industrial metals had a violent week after the Asian markets tanked on 14 March 2014 over a bond default in China which added to growing concerns about slowing economic growth and demand from the world’s biggest consumer of the metal. Data showed that China recorded a sharp decline in exports. On the MCX, March future prices of lead have fallen by almost 5% for the week ended 13th March, to Rs123/kg from Rs129/kg.
In January, the harvesting of chana commenced but, due to the unseasonal heavy rains, arrivals have been disrupted. Unseasonal rainfall in Maharashtra and neighbouring states has raised fears of substantial damage to the chana crop. Market estimates that chana output may be lower than the government’s forecast also supported prices. Over the week, chana March futures prices closed 0.95% up at Rs3,281/quintal on 13th March.