MC:Gold, Silver, base metals may trade on a positive note
Angel Commodities has come out with its report on international commodities. According to the research firm gold prices are expected to trade higher on account of upbeat global market sentiments coupled with dollar weakness.
� Hopes of reversal in Chinese monetary policy boost global equities
� Nymex crude oil prices trading above the crucial $100/bbl mark.
� Gold and silver imports duty in India raised to 2% and 6%.
Global equities are trading in the green today as expectations are doing rounds that China could move forward to reverse its currently tight monetary policy. China's GDP for the fourth-quarter 2011 rose 8.9 percent as against 9.1 percent in the previous quarter, but fell below the 9 percent growth mark for the first time since mid-2009. Decline in growth can be attributed to moderated export growth and a cool down in the property market.
The Indian government has increased imports duty on gold and silver in percentage terms to 2 percent and 6 percent respectively. This move has come in at a time when the Indian economy is grappling with economic slowdown and this introduction would help increase government revenue if imports sustain.
The concern of rising fiscal deficit would also be tackled through this government initiative. Although a direct fundamental impact on consumer demand for gold should be negative, we feel that markets would factor in the same and consumers would return to the jewellery market once the scenario stabilizes.
Gold is trading on an upbeat note today as dollar weakness in the international markets coupled with upbeat risk sentiments supported upside in prices. In the Indian markets, the move by the government to increase import duty on gold and silver both also supported gains in the domestic markets.
Base metals are also trading in the positive territory today as China, driver of base metals demand is expected to ease its monetary policy after growth slows below 9 percent for the 4Q2011.
Nymex crude oil prices increased by 2.2 percent today on news that France is pushing a ban on Iranian oil imports. This coupled with expectations that China will increase monetary stimulus, thus supporting demand for crude oil also pushed prices higher.
Additionally, a weaker dollar also acted as a positive factor for the commodity.
Prices were trading around $100.91/bbl after touching an intra-day high of $100.96/bbl till 4:30pm today. On the MCX, prices increased around by 0.1 percent on the back of Rupee appreciation and were hovering around Rs.5132/bbl after touching an intra-day high of Rs.5144/bbl till 4:30pm today.
