Economy News : Indian-commodity.com

COMEX Gold Just Under $940 Ahead Of New York Open - August 01, 2009

2009-08-01T14:34:00.001+05:30

Gold was seen consolidating around $940 per ounce mark in today's session as the commodity market participants eyed the steady undertone in the global markets. However, some selling pressure was seen at higher levels as traders covered their open positions ahead of the weekends. Earlier in the week, South African Trade union Solidarity signed wage agreements in both the gold and coal sectors in the Chamber of Mines yesterday.

The union says the agreements are favorable and is particularly satisfied that the agreements could be reached without strike action.

Meanwhile, in Asia today, COMEX Gold rose in tune with the global asset markets today, reconfirming a pattern, which has been in the play for the last few days.

The commodity is showing signs of re visiting $950 mark yet again given that there are overwhelming concerns that strong demand from India and China would not pull prices down much even if the dollar appreciates further.

The sustained high rupee price for gold is not having a significant impact on trade demand for the metal in the run-up to the wedding and festival demand in India, according to the World Gold Council (WGC).

Oil rose above $67 a barrel today, boosted by stock markets in Asia. The US stock futures also opened higher today signaling a potential rebound by Wall Street from the previous day's decline amid an ongoing flood of major corporate earnings data. Asian stock markets were higher Friday, buoyed by Wall Street's gains.

COMEX Gold futures for December are trading just under $940 per ounce, coming off a high of $942.70 per ounce.

MCX Gold witnessed some selling above Rs 14700 mark, coming off a peak at Rs 14728 and currently trade at Rs 14646, down Rs 50 or 0.34% from the previous close with a massive 12% drop in the open interest.

The near month August contract trades at Rs 14646, down Rs 56 with a massive decline of 23% in the open interest.

Reduced Monsoon May Dent Economic Recovery - August 01, 2009

2009-08-01T14:32:00.001+05:30

Moody''s expressed concern that a poor monsoon may dent India''s economic recovery. Thus a decline in agricultural output and a consequential fall in farm income may not just limit rural spending but widen the gap in wealth between rural and urban India, damaging its social fabric. India''s rural population accounts for a large share of total consumption hence, a generous slowdown in rural spending will limit overall consumption growth.

However, although the farm sector accounts for about 18% of the country''s gross domestic product, farm incomes is a key to the survival of about two-thirds of its population.

Moreover, a considerable fall in this year''s food grain output may activate a price rise, adding that the Reserve Bank''s upward revision of inflation risk to 5% for 2009-10 from 4% earlier is an indicator of the tough times to come.

Not only this, the farming cycle during the Rabi may be affected, raising apprehensions about a dip in output in the immediate following season as well, if the lack of improvement in rainfall stretches into August.

However, the research major feels urgent upgrading in farm technology; better irrigation facilities and major drive to overall agricultural infrastructure hold the key to sustainable food security in the country.

Bond Prices Decrease In Advance Of Auction - July 31, 2009

2009-07-31T18:03:00.001+05:30

The bond prices slipped by around 50 paise, ahead of the auction of government securities, which is scheduled on Friday. RBI is scheduled to auction government securities of Rs 12,000 crore this week. As per the statement by the Reserve Bank''s Governor that RBI will by and large stick to the OMO calendar that dampened market sentiments, said a dealer with a private bank.

The total traded volumes on the order matching system were at Rs 5,925 crore. The 6.90 per cent-10 year-2019 paper opened at Rs 9 9.90 (6.91 per cent YTM) and slipped to close at Rs 99.47 (6.97 per cent YTM) as against the previous close of Rs 99.95 (6.91 per cent YTM).

Moreover, the 7.94 per cent-12 year-2021 paper opened at Rs 105.65 (7.21 per cent YTM) and closed at Rs 105.20 (7.27 per cent YTM).

Gold Remains Down On Global Cues Of Passive Demand - July 31, 2009

2009-07-31T16:44:00.000+05:30

Being in a loss for the second straight session, due to weak global trend, gold prices on July 30 fell by another Rs 120 to Rs 14,870 per ten gram followed by silver which recorded a steep fall of Rs 300 to Rs 22,100 per kg. However, traders said that after the metal''s fall to 924.60 dollar an ounce last evening, investor sentiments in gold remained weak as the dollar firmed against the euro fading demand for the metal as an alternative investment.

Additionally, they said fall in demand at higher levels and shifting of funds from bullion to rising equity markets also weighed on the gold prices in domestic markets.

However, standard gold and ornaments fell by Rs 120 each to Rs 14,870 and Rs 14,720 per ten gram respectively, while sovereign declined by Rs 25 to 12,450 per piece of eight gram.

Precious Metals Gather Round Some Shine - July 31, 2009

2009-07-31T16:41:00.002+05:30

Precious metal prices rose on Thursday, 30 July, 2009. Prices shone today as the rebounding crude price and weak dollar increased the appeal of precious metals as a hedge against inflation. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $934.9, higher by $7.7 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.6%. Year to date, gold prices are higher by 5.5%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11.5%) since then.

On Thursday, Comex silver futures for September delivery gained 48.2 cents (3.5%) at $13.258 an ounce. Last week, silver ended higher by 3.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 21.7% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, a six-currency gauge of the greenback's value, rose modestly.

In the crude market, crude prices rose in synchronization with US stocks.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for October delivery closed higher by Rs 45 (0.3%) at Rs 14,696 per 10 grams.

Prices rose to a high of Rs 14,715 per 10 grams and fell to a low of Rs 14,631 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 274 (1.25%) higher at Rs 22,153/Kg. Prices opened at Rs 21,945/kg and rose to a high of Rs 22,238/Kg during the day's trading.

Precious Metals Go On All Sides Of Paler - July 30, 2009

2009-07-30T16:32:00.001+05:30

Precious metal prices fell on Wednesday, 29 July, 2009. The strong dollar was mainly responsible for this. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $927.2, lower by $11.9 (1.3%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.6%. Year to date, gold prices are higher by 4.7%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11.5%) since then.

On Wednesday, Comex silver futures for September delivery lost 48 cents (3.5%) at $13.26 an ounce. Last week, silver ended higher by 3.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 18.2% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar index, a six-currency gauge of the greenback's value, rose by more than 0.7%.

The euro fell by more than 1% against the dollar. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 90 (0.6%) at Rs 14,651 per 10 grams.

Prices rose to a high of Rs 14,750 per 10 grams and fell to a low of Rs 14,618 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 517 (2.3%) lower at Rs 21,879/Kg. Prices opened at Rs 22,336/kg and fell to a low of Rs 21,758/Kg during the day's trading.

Inflation By The Side Of Quarters Negative Zone - July 30, 2009

2009-07-30T16:19:00.002+05:30

The official Wholesale Price Index for all commodities for the week ended 18th July 2009 rose by 0.04% to 236.8 from 236.7 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at -1.54% for the week ended 18 July 2009 compared with 19 July 2008. India's WPI is constantly moving in negative zone, thanks to the higher base effect. However the trend is expected to reverse in near term with lower base effect setting in.

The index for primary article rose by 0.3% to 261.1 from 260.3 for the previous week. In primary article index, 'Food Articles' group index rose by 1.2% to 259.0 from 255.9 for the previous week due to higher prices of mutton (14%), arhar (9%), gram (4%), moong, jowar, fruits & vegetables and masur (3% each), bajra and urad (2% each) and maize and ragi (1% each). However, the prices of condiments & spices (1%) declined.

The index for 'Non-Food Articles' group rose by 1.7% to 242.5 from 238.4 for the previous week due to higher prices of logs & timber (35%), copra (3%), raw silk (2%) and rape & mustard seed, raw cotton and gingelly seed (1% each). However, the prices of sunflower (1%) declined.

The index for 'Minerals' group declined by 16.8% to 561.7 from 675.4 for the previous week due to lower prices of iron ore (24%) and felspar (3%).

However, the prices of vermiculite (86%), manganese ore (77%), silica sand (4%) and barytes (2%) moved up.

The index for fuel and power declined by 0.1% to 338.2 from 338.4 for the previous week due to lower prices of aviation turbine fuel (7%).

The index for manufactured group declined by 0.1% to 205.7 from 205.9 for the previous week. The index for 'Food Products' group declined by 0.4% to 232.1 from 233.0 for the previous week due to lower prices of oil cakes (3%) and cotton seed oil (1%).

However, the prices of imported edible oil (4%) and rice bran oil, coconut oil, sugar, butter, ghee and gur (1% each) moved up.

The index for 'Beverages Tobacco & Tobacco Products' group rose marginally to 304.4 from 304.3 for the previous week due to higher prices of soft drinks (all kinds) (1%).

The index for 'Textiles' group declined by 0.2% to 143.4 from 143.7 for the previous week due to lower prices of hessian cloth (3%) and hessian & sacking bags (2%).

The index for 'Chemicals & Chemical Products' group rose marginally to 227.1 from 227.0 for the previous week due to higher prices of acid (all kinds) (1%).

The index for 'Non-Metallic Mineral Products' group declined by 0.1% to 222.5 from 222.8 for the previous week due to marginal decline in the prices of cement.

The index for 'Basic Metals Alloys & Metal Products' group rose marginally to 255.1 from 255.0 for the previous week due to higher prices of foundry pig iron and basic pig iron (1% each). However, the prices of other iron steel, steel ingots and lead ingots (1% each) declined.

The WPI inflation turned negative in June 2009 due to the statistical base effect and not because of any contraction in demand.

Within WPI, inflation of primary articles, particularly food articles, are continuously rising, recording a growth of 8.57% in June 2009 over 5.94% in June 2008.

Moreover consumer price indices (CPIs) are at elevated levels, indeed have also hardened in recent months.

Growing demand and concern on supply has resulted into higher prices of essential commodities. This has again raised the expectations of rise in inflation.

In recent policy review, RBI has projected 5% inflation for end –March 2010 that is higher then 4% projected in the Annual Policy meet on 21 April 2009.

Moving further, the rising commodity prices globally and the uncertain monsoon outlook could further accentuate food price inflation.

Rupee Fall Down 21 Paise, Split Ends At 48.30 - July 30, 2009

2009-07-30T16:16:00.002+05:30

The rupee on Wednesday tumbled by 21 paisa against the US dollar amid expectations of fresh capital outflows and month end dollar demand due to the weakness in the local equity markets. In active trade at Interbank Foreign Exchange market, the rupee resumed lower at 48.30/31 per dollar as against its previous close of 48.20/21 a dollar. Reflecting a steep decline in the local equity markets, the domestic currency later hit a low of 48.52.

The BSE Sensex was down by a whopping nearly 444 points in late morning deals after China''s stock dipped most in eight months on concerns over the prospects of earnings growth.

However, at a later stage, it recovered to close lower by 158.48 points. Tracking this, the rupee also bounced back to close at 48.41/42. It touched a high of 48.26 a dollar.

However, the Reserve Bank of India (RBI) fixed the reference rate for the US dollar at Rs 48.47 while for the euro at Rs 68.45.

The rupee premiums on the forward dollar closed steady to slightly better on stray paying pressure from corporates and banks.

The benchmark six-month forward dollar premium payable in December closed hardly changed at 46-1/2-48-1/2 paise from 46-48 paise on Tuesday and the far-forwards maturing in June also shot up to 96-1/2 to 98-1/2 paise from 96-98 paise previously.

However, the rupee remained weak against the Japanese yen. The rupee shot up against the pound to close at Rs 79.22/24 from Rs 79.58/60 but it strengthened against the euro to Rs 68.34/36 from Rs 68.72/74.

Further, it eased against the Japanese yen to Rs 50.93/95 per 100 yen from Rs 50.84/86 previously.

Govt Have Access To May Disappoint Private Sector - July 29, 2009

2009-07-29T16:31:00.001+05:30

According to the Reserve Bank of India (RBI), the higher government borrowings resulting the higher bond yields might upset the private sector. The reason behind the RBI’s statement is that the higher bond yields had militated against the low interest regime required to encourage private sector investments.

This is the first statement from the central bank accepting the adverse impact of such borrowings.

The yield on the 10-year government paper has moved up from 6.81 per cent on the eve of the Union Budget, announced earlier this month, to 6.94 per cent at the close of trading on 28th July.

However, the central bank maintained that various tools available with it in the form of open market operations (OMOs) and redemption of market stabilization scheme (MSS) bonds have ensured adequate liquidity in the banking system.

Meanwhile, the central bank also stated that it has enough headroom to ensure that the borrowing programme was carried out easily.

Precious Metals Go Round Unexciting - July 29, 2009

2009-07-29T16:25:00.001+05:30

Falling crude price and strengthening dollar took their toll on precious metals on Tuesday, 28 July, 2009. Crude prices slipped for the first time after four consecutive sessions of rise. On the other hand, weak consumer confidence data strengthened the dollar. These factors reduced the appeal of precious metals as a hedge against inflation. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, gold for August delivery ended at $939.1, lower by $14.40 (1.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.6%. Year to date, gold prices are higher by 6%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Tuesday, Comex silver futures for September delivery lost 25 cents (1.8%) at $13.74 an ounce. Last week, silver ended higher by 3.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 21.7% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, a six-currency gauge of the greenback's value, rose by more than 0.4%. The dollar strengthened on weak consumer confidence data.

The Conference Board reported on Tuesday, 28 July, 2009 that consumer confidence took its second consecutive monthly drop in July, 2009.

The index dropped to 46.6 in July from an unrevised 49.3 in June. In May, the confidence gauge stood at 54.8.

The confidence measure was worse than expected. Market was expecting confidence to dip to 48 in July from the June reading.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 186 (1.2%) at Rs 14,755 per 10 grams. Prices rose to a high of Rs 14,962 per 10 grams and fell to a low of Rs 14,715 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 331 (1.5%) lower at Rs 22,396/Kg. Prices opened at Rs 22,750/kg and fell to a low of Rs 22,258/Kg during the day's trading.

Rupee Cuts 3 Sessions Of Rise Cataract Of 4 Paise - July 29, 2009

2009-07-29T16:22:00.000+05:30

The Indian rupee on July 28 fell by four paise against the dollar on account of month-end demand for the US currency as well as weakness in local equity markets. At the Interbank Foreign Exchange market, the rupee resumed lower at 48.23/24 a dollar from its overnight close of Rs 48.16/17 a dollar. The forex dealers said that importers, mainly oil refiners, were seen purchasing dollars for their month-end import payments putting some pressure on the rupee.

The rupee later moved in a range of 48.13 and 48.3050 a dollar before closing at 48.20/21. The Indian benchmark Sensex ended lower by 43.10 points or 0.28 per cent.

Moreover, the dealers further added that the investors remained sidelined ahead of the announcement of the RBI''s quarterly monetary policy review.

But after the announcement, the dealers termed it a non-event as the Central bank kept the key interest rates unchanged and increased the inflation forecast to five per cent by end March 2010 from earlier four per cent.

Precious Metals Last Part Marginally Higher - July 28, 2009

2009-07-28T16:40:00.001+05:30

Precious metal prices ended little higher on Monday, 27 July, 2009. It was a day of volatile trading for precious metals as prices swung between gains and losses. The dollar managed to gain back some of its lost ground. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Monday, gold for August delivery ended at $953.5, higher by $0.40 (0.04%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 1.6%. Year to date, gold prices are higher by 7.44%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Monday, Comex silver futures for September delivery rose 11.5 cents (0.9%) at $13.99 an ounce. Last week, silver ended higher by 3.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 23.5% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar index, a six-currency gauge of the greenback's value, gained back some of its lost ground and rose mildly higher.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 41 (0.27%) at Rs 14,941 per 10 grams. Prices rose to a high of Rs 14,972 per 10 grams and fell to a low of Rs 14,897 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 200 (0.88%) higher at Rs 22,727/Kg. Prices opened at Rs 22,550/kg and rose to a high of Rs 22,820/Kg during the day's trading.

Reserve Bank Of India Plant Life Explanation Rates Unmoved - July 28, 2009

2009-07-28T16:38:00.001+05:30

The RBI on Tuesday kept the key policy rates unchanged but increased the inflation forecast to 5 per cent. RBI kept the repo rate, at which the central bank lends cash to banks, at 4.75 per cent and the reverse repo rate, at which it absorbs surplus cash from the banking system, stays at 3.25 per cent, according to the Q1 Monetary Policy. Moreover, the RBI also kept the cash reserve ratio unchanged at 5.00 percent.

The deposit growth is seen at 19 per cent and the review has said that there is scope for the banks to slash interest rates. The SLR also remains unchanged at 24 per cent.

The GDP is expected to grow at 6 per cent while the money supply growth is seen at 18 per cent, according to the quarterly review of the economy.

Since October, RBI has cut its short-term lending rate by 425 basis points in six steps. The RBI also slashed the reverse-repo rate by 275 basis points since early December and reduced the cash reserve requirement by 400 basis points to 5 percent to keep credit flowing.

RBI Inspection Projects Higher Growth Of 6.5 Per Cent In 2009-10 - July 28, 2009

2009-07-28T16:32:00.000+05:30

Most recent round of professional forecasters’ survey of the Reserve Bank of India (RBI) has projected the country’s overall growth rate advanced at 6.5 per cent for 2009-10. However, growth rate was projected at 5.7 per cent in the previous survey.

The RBI’s Report on Macroeconomic and Monetary Developments: First Quarter Review for 2009-10 was released on Monday on the eve of the first quarter Review of the Monetary Policy.

However, the report warned that there are indications of inflation firming up by the end of the year.

It attributed price pressures to the waning base effect of last year, increase in commodity prices, delayed progress of monsoon potentially increasing food prices, and the inflationary implications of expansionary fiscal and monetary policies.

Meanwhile, the sectoral growth rate for the agriculture sector amid the delayed monsoon, has been revised downwards at 2.5 per cent (against 3 per cent in the last survey), the forecast for the industry and services sectors was revised upwards to 4.8 per cent (4.1 per cent) and 8.3 per cent (7.5 per cent), respectively.

Reserve Bank Of India May Leave Policy Rates Unchanged - July 27, 2009

2009-07-27T16:07:00.001+05:30

The central bank is likely to keep rates on hold at its policy review on Tuesday, 28 July 2009, due to a surplus liquidity in the banking system and on low demand for credit. The central bank is also likely to lay out a more clear roadmap to conduct the government borrowing programme in a smooth manner and may hike the GDP and inflation forecast for the year ending March 2010 (FY 2010).

Ahead of the review, the RBI will also release the macroeconomic and monetary developments during the quarter ended June 2009.

The Reserve Bank of India (RBI) cut the repo rate, or its key short-term lending rate, by 425 basis points to 4.75% in six steps since October 2008 as it tried to guard a slowing economy against the global financial crisis.

The central bank also slashed the reverse-repo rate by 275 basis points since early December 2008 and brought down the cash reserve requirement (the proportion of deposits that banks set aside), by 400 basis points to 5% since early October 2008 to keep credit flowing.

the government's stimulus measures late last year to counter slowdown in domestic economy have started to bear fruits.

The latest economic data indicated improving economic activity. The six infrastructure industries -- crude oil, refining, coal, electricity, cement and steel -- together grew at an annual rate of 6.5% in June 2009, faster than the previous month's rise of 2.8%, data showed on Thursday, 23 July 2009. The infrastructure sector accounts for 26.7% of India's industrial output.

Inflation based on the wholesale price index declined 1.17% in the year through 11 July 2009, compared to previous week's fall of 1.21%, data released by the government showed on Thursday, 23 July 2009.

Precious Metals Observer Diverse Closing Stages - July 27, 2009

2009-07-27T15:57:00.001+05:30

Precious metal prices ended mixed on Friday, 24 July, 2009. Gold prices ended lower for the day while silver rose. The dollar remained relatively steady against its counterparts. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, gold for August delivery ended at $953.1, lower by $1.7 (0.2%) an ounce on the New York Mercantile Exchange. For the week, gold ended higher by 1.6%. Year to date, gold prices are higher by 7.4%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Friday, Comex silver futures for September delivery rose 11 cents (0.8%) at $13.88 an ounce. For the week, silver ended higher by 3.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 22.6% this year. For 2008, silver had lost 24%.

In the currency market on Friday, the dollar index, a six-currency gauge of the greenback's value, rose mildly higher.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

RBI Likely To Maintain Status Quo On Tuesday - July 27, 2009

2009-07-27T15:41:00.002+05:30

Looking at inflation at subzero level, the Reserve Bank of India (RBI) is unlikely to go for any cut in key short- term lending as well as borrowing rates and cash reserve ratio (CRR) in the quarterly annual monetary policy review scheduled on Tuesday. The governor of Reserve Bank of India, D Subbarao met Prime Minister Manmohan Singh and Finance Minister Pranab Mukherjee, as part of the pre-policy consultations, on Friday.

The bankers felt that any cut in key-rates at this stage would serve no purpose as there was already surplus liquidity in the system.

Moreover, a still low demand for credit might also prompt the Reserve Bank to maintain a status-quo in its key rates, the bankers said.

Besides this, the Central bank may lay out a clearer roadmap to conduct the Government borrowing programme in a smooth manner and may increase the GDP and inflation forecast for FY10, bankers said.

Public Private Partnership Street Projects Get Govt Clearance - July 25, 2009

2009-07-25T13:40:00.000+05:30

The Government on Friday cleared 15 road projects totaling Rs 15,560 crore to be build under the Public Private Partnership (PPP) mode in eleven states. The 25th Public Private Partnership Appraisal Co-mmittee (PPPAC) meeting, chaired by the finance secretary, Mr Ashok Chawla, approved these projects spread over 11 states.

Since January 2006, a panel under the finance ministry has approved 116 projects worth Rs 1,15,000 crore under the public-private partnership mode.

The UPA government is giving a major thrust to the infrastructure sector in an attempt to remove bottlenecks in the Indian infrastructure and boost the economy, which is hit by slowdown.

As per government estimates, the country needs at least $500 billion during the 11th Five Year Plan period to meet the funding needs of infrastructural development.

Gold Continues To Fall Over As Dollar Increase Losses - July 25, 2009

2009-07-25T13:37:00.001+05:30

Gold futures continued to tumbled in the mid day London trades today as the US dollar started minimizing the losses against the single currency. August gold futures are expected to open floor trading in New York around $2 an ounce lower Friday, based on electronic activity ahead of the pit session at the Comex division of the New York Mercantile Exchange. In other markets that have the potential to impact metals in the short term, the euro is up to $1.4246 from $1.4203 late Thursday afternoon.

In screen trading ahead of the pit open, the September S&P 500 futures are up 1.90 points to 970.80.

The lone U.S. economic report on the calendar for Friday is the University of Michigan consumer-sentiment index at 9:55 a.m. EDT (1355 GMT).

An ounce of gold on the COMEX division of the New York Mercantile Exchange is down $ 2.6 at $ 952.2 per ounce. The $954 levels is a very crucial level for gold today.

Comex gold warehouse stocks were up 214,217 ounces at 9,136,535 ounces Thursday, while silver stocks were down 117,180 ounce

The data released so far today from Europe, that the two closely watched business confidence surveys rose more than forecast in July, while U.K. GDP contracted 5.6% annually in the second quarter.

The euro rallied against the British pound and also rose vs. the U.S. dollar on the news. The University of Michigan's consumer confidence gauge is due for release

GDP shrank by 0.8% in the second quarter, the Office for National Statistics said, in a preliminary estimate.

Compared to the same period last year, output fell by 5.6% -- the largest annual decline since current records began in 1955, the ONS said. British pound fell immediately after the data came in, pound is down 0.6% to 1.6415 per US dollar.

MCX upfront month contract is down Rs 30 at Rs 14890 per 10 grams. The counter stayed below the 14925 levels mentioned in the morning update. It may find support near Rs 14865 and 14800 levels.

Precious Metals Prepare Near The Beginning Losses - July 24, 2009

2009-07-24T15:12:00.002+05:30

Precious metal prices coughed up earlier losses and ended higher on Thursday, 23 July, 2009. Prices rose today in synchronization with US stocks and also as the dollar retreated. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $954.8, higher by $1.5 (0.2%) an ounce on the New York Mercantile Exchange.

Earlier it reached a high of $957.5. Last week, gold ended higher by 2.7%. Year to date, gold prices are higher by 7.6%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Thursday, Comex silver futures for September delivery rose 10 cents (0.8%) at $13.8 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 21.8% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, a six-currency gauge of the greenback's value, fell marginally paring early gains.

At Wall Street today, U.S. equities rose, sending the Dow Jones Industrial Average above 9,000 for the first time since January, after some companies reported earnings that topped analysts' estimates and home resales increased more than forecast.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 19 (0.13%) at Rs 14,920 per 10 grams.

Prices rose to a high of Rs 14,993 per 10 grams and fell to a low of Rs 14,901 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 43 (0.19%) higher at Rs 22,433/Kg. Prices opened at Rs 22,420/kg and rose to a high of Rs 22,579/Kg during the day's trading.

Rupee Be Glad About Marginally Against US Dollar - July 24, 2009

2009-07-24T15:09:00.001+05:30

The Indian rupee on July 23 rose by 7.50 paise to close at 48.4450/4550 against the US currency mostly on account of a smart rise in equity markets amid a weak dollar overseas. At the Interbank Foreign Exchange market, the rupee resumed higher at 48.40/42 a dollar against Wednesday''s close of 48.52/53.

The rupee later it moved in a range of 48.32 and 48.50 per dollar before concluding the day at 48.4450/4550 and the rupee gained momentum due to a smart rebound in the Indian Benchmark Sensex, which surged by 387.92 points or 2.61 per cent.

The Asian indices also displayed a firm trend at close on Thursday. Also the weakness of dollar against the major world currencies also aided rupee sentiment.

The expectation of increased capital inflows in the capital markets after firm trends in local equity markets also boosted rupee sentiment.

As per the Sebi data, in the last seven days, the capital inflows amounted to $12.30 million.

However, the Reserve Bank of India fixed the reference rate for the US dollar at Rs 48.44 while for the euro at Rs 69.07.

The rupee premiums on the forward dollar closed further lower. The benchmark six-month forward dollar premium payable in December closed at 47-1/2-49 paise, down from 49-51 paise on Wednesday while the far-forwards maturing in June also ended lower at 97-1/2-99 paise from 100-102 paise previously.

RBI Expected To Put Down Key Rates Untouched - July 24, 2009

2009-07-24T15:05:00.001+05:30

Surplus liquidity in the banking system and low demand for credit may prompt the Reserve Bank of India (RBI) to maintain a status-quo in its key rates. In the quarterly review of its annual monetary policy, the central bank is also expected to put down a clearer roadmap to conduct the government-borrowing programme in a proper way. It may also hike the GDP and inflation forecast for FY''10.

Uco Bank CMD S K Goel said that there is enough liquidity in the banking system, even though, they may keep headroom to lower the cash reserve ratio (CRR) and any cut is doubtful in the current policy. Hence, it may leave the repo and reverse repo rates unchanged.

Additionally, he said that given the difficult market conditions, the apex bank might relax the NPA norms for stress-ridden sectors and extend the deadline for loan restructuring.

The possibility of hiking the SLR (statutory liquidity ratio) requirement of banks to 25% from the current 24% cannot be completely ruled out.

Since October last year, in order to arrest the slowdown in the economy by stimulating demand the apex bank has trimmed its CRR to 5%, repo and reverse repo rates to 4.75% and 3.25% respectively.

Govt Short-Term Tax Clear Up Get Higher On 3.65 Per Cent - July 23, 2009

2009-07-23T15:07:00.002+05:30

High base effect and refunds have brought down the net direct tax collection growth to 3.65% to Rs 59,465 crore during the first quarter of the current financial year as against the direct tax collection which comprises of corporate and personal income tax, stood at Rs 57,373 crore during the April-June period the previous year.

Therefore, tax payers received Rs 17,600 crore, representing 52.01% growth over Rs 11,578 crore given in the first three months of the previous financial year.

Additionally, lower growth in net tax collection was primarily due to the higher tax refund outgo, hence, corporate tax collected during the period was also 3.31% higher at Rs 35,709 crore as compared to Rs 34,566 crore against the corresponding period last year.

However, in the personal income tax division, which includes Fringe Benefit Tax (FBT) and Securities Transaction Tax, the government collected Rs 24,564 crore, higher by 4.38% compared to last year.

The FBT collections recorded a negative growth of 7.56%. Hence, the Finance Minister proposed to abolish the tax.

Additionally, STT mop up fell 9.9% to Rs 1,462 crore in the first quarter of this financial year depicting decrease in trade at the bourses while, the net tax collection during the month of June was up marginally at Rs 35,307 crore compared to the last fiscal.

In the meantime, the government''s tax collections by way of Tax Deduction at Source recorded a growth of 12.1% in corporate TDS at Rs 19,584 crore while personal income tax TDS growth was 12.4% during the first quarter at Rs 21,188 crore as compared to last year.

The direct tax collections of the government are likely to grow by 9.2% at Rs 3, 69,575 crore during the current fiscal against Rs 3, 38,212 crore collected last fiscal.

Rupee Fall Down In Line By Means Of The Sensex - July 23, 2009

2009-07-23T15:03:00.002+05:30

Following the equity markets, the rupee closed lower by 10 paise against the US currency. In fairly active trade at the Interbank Foreign Exchange market, the rupee resumed at 48.38/40 a dollar from previous close of 48.42/44 and improved further to a high of 48.25 on account of a smart rise of nearly 307 points in the morning deals.

The forex dealers said that there was selling pressures of dollars from the exporters in early trade as the US currency was lower in Asia in the morning after Federal Reserve Chairman Ben Bernanke expressed a cautious view about the US economy that helps the rupee to recover losses.

However, a sudden bout of selling in equities weighed on the rupee and it fell to 48.63 per dollar. Later it later settled at 48.52/53 a dollar. The rupee closed down by 22 paise on Tuesday.

India Information Fall In Foreign Direct Investments Ranking - July 23, 2009

2009-07-23T14:59:00.001+05:30

This year, India has slipped to third place in global foreign direct investments (FDI) due to the economic meltdown. However, the country will continue to remain among the top five attractive destinations for international investors during the next two years, says Unctad (United Nations Conference on Trade and Development) in a new report on world investment prospects.

India was ranked second in global FDI flows after China during last year. However, China continues in the top place and the US went up to second place this year due to rise in investments by Chinese and Indian companies as they acquired some sick American firms.

Still, FDI prospects for India remain buoyant, says James Zhan, a senior Unctad official and one of the authors of the latest report.

He suggested that the Bric countries will hog most of the investment flows once FDI growth starts picking up after 2010.

Interest Rate Futures Instrument To Hedge The Risk - July 22, 2009

2009-07-22T15:27:00.002+05:30

As of now, Interest rate futures only banks have been permitted for in India, but there are lots of indications that the coverage of participants will be enhanced in due course. The credit crisis in the year 2008 has substantially increased the risk in global interest markets. In India, interest rates have been highly volatile in the last 12-18 months. There is a growing need for mitigating interest rate risk using an effective and efficient mechanism.

In this perspective, the book, ‘A guide to interest rate futures' published by MCX stock exchange, part of listed entity Financial Technologies (India) is aimed at developing awareness and understanding of the concepts and contemporary market practice of using Exchange traded interest rate futures for mitigating interest rate risk.

During the crisis, banks and financial institutions have failed but not exchange. It shows the reliability of regulator.

Inflation, government borrowing, company expansion activities are major factors having impact on interest rate movement.

In case of India, government borrowing is major factor among others. To funding higher fiscal deficit, RBI issue bonds in market to raise the money.

However bond price and bond yield have inverse relationship. Due to the huge supply bond prices are declining and yield is going up.

In this scenario, analysis of interest rate becomes essential to understand the market dynamics. Banks, primary dealers, FIIs will have great advantage by way of interest rate future trading.

A futures contract is an agreement between a buyer (seller) and an exchange or its clearinghouse in which the buyer (seller) agrees to take (make) delivery of a standard quantity of a specific asset/financial instrument at a specified price at the end of a designated period of time.

Future trading is essential as it is the best way of hedging against risk, perfect way for financial leverage and also effective management of funds. It would be the perfect way for proper price discovery.

Market regulators are planning to launch interest rate future in India very soon however proper schedule is yet to announce.

Apex bank of the country dose not have control on long term interest rate as it is determine by market force.

However instruments like interest rate future will bring more transparency in the movement of interest rate.

Role of RBI in interest rate future According to RBI's regulation, Banks/PDs/FIs, allowed to undertake FRAs/IRS for their balance sheet management or for market making, Overall swaps undertaken for market making PVBP should be within 0.25% of the net worth, Banks have been allowed to take trading positions in interest rate futures.

Banks need to disclose as a part of the notes on accounts to balance sheets the following details:

1) Notional principal amounts of exchange traded interest rate derivatives undertaken during the year.

2) Notional principal amounts of exchange traded interest rate derivatives outstanding as on year-end.

Contract Specifications:

- Underlying – 10Y coupon bearing GOI security

- Notional coupon – 7.00% s.a. (day count 30/360)

- Contract Size – Rs. 2.00 lacs

- Available Contracts – quarterly contracts expiring in the months of March, June, September and December.

- Deliverable Month – from 1st of the contract month to last day of contract month, i.e. 1 month

- Tenor – The maximum maturity of the contract is 12 months

- Last Trading day – Seventh business day preceding the last business day of the delivery month

- Last Delivery Day – Last business day of the month

- Trading Hours – 9:00 a.m. to 5:00 p.m.

Margin requirement:

Cash/Collateral deposited on fresh positions. Represents a deposit against short-term price movement.

The amount of initial margin is set by the Exchanges, in accordance with the guidelines laid down by the RBI-SEBI Technical Committee Report.

Based on a 99% VaR calculations, as per the methodology suggested by the RBI-SEBI Report. Subject to a minimum of 2.33% of the value of the futures contract on the first day of trading and L1.6% of the value of the futures contract thereafter

The Daily Settlement Price would be calculated based on the closing price of the futures contract on the trading day, which would be declared by the exchange soon after closing hours.

The closing price is calculated as the Weighted Average price of the futures contract in the last half an hour of trade.

Recently RBI has launched currency futures, which is working successfully. Interest rate is always the subject of interest of every individual.

It does have vital importance in the life of individual who is paying EMI for home loan and the banks, which approve that loan amount. Both the parties are worried for the risk, which is underlying in the trade.

To cover the risk, there is a need of perfect judgment of interest rate trend. In short, interest rate future trading will be the perfect platform for both the parties concerned in the trade.

It would be the best place where one can precisely judge the movement of upcoming interest rate. As of now, Interest rate futures only banks have been permitted for in India, but there are lots of indications that the coverage of participants will be enhanced in due course.

Bond Price Get Higher A Little Bit - July 22, 2009

2009-07-22T15:21:00.002+05:30

The bond prices witness a marginal growth on July 21 amidst thin trading volumes. The prices surged in the first half of trade after US treasury yields fell but the prices fell on account of profit booking by investors, the dealer said. The trading volumes were thin as the investors are waiting for RBI''s credit policy.

The total traded volumes on the order matching system were lower at Rs 4,190 crore (Rs 7,995 crore).

RBI will purchase government securities of Rs 6,000 crore through an open market operation on Thursday, which was announced by the central bank after the market hours yesterday.

The 6.90 per cent-10 year-2019 paper opened at Rs 100.10 (6.88 per cent YTM) and closed at Rs 99.90 (6.91 per cent YTM) as against the previous close of Rs 99.87 (6.92 per cent YTM).

The 7.94 per cent-12 year-2021 paper opened at Rs 105.32 (7.26 per cent YTM) and closed at Rs 105.26 (7.26 per cent YTM) as against the previous close of Rs 105.20 (7.27 per cent YTM).

Rupee Cataract During Tandem With Equity Markets - July 22, 2009

2009-07-22T15:15:00.002+05:30

In line with the local stock market, the Indian rupee fell by 22 paise against the dollar on July 21, on the back of importers'' demand for the US currency. Most of the Asian currencies were also weaker against the dollar, that impacting rupee sentiment.

On the Interbank Foreign Exchange market, the rupee opened slightly lower at 48.25/26 against previous day close of 48.20/21 and fell further in sync with equity markets to close the day at 48.42/44. The rupee moved in a range of 48.24 and 48.46 per dollar.

The Indian benchmark Sensex ended lower by 128.52 points or 0.85 per cent. Asian indices ended mixed while European markets resumed better yesterday.

However, the Reserve Bank of India (RBI) fixed the reference rate for the US dollar at Rs 48.27 and for the euro at Rs 68.54.

Foreign Direct Investment In May Dips By 47 Per Cent - July 21, 2009

2009-07-21T15:21:00.000+05:30

The foreign direct investment (FDI) in India fell by about 47 per cent to $2.1 billion in May on account of the global recession and the trend is likely to continue for some more months, a senior government official said yesterday. The FDI during the same month last year was $3.9 billion. The FDI in the first two months of this financial year is $4.43 billion, the official said. The government had scaled down the FDI target by $5 billion from $35 billion last fiscal.

The cumulative FDI from April 2000 to March 2009 stands near to about $90 billion. The FDI in 2008-09 was $27.3 billion as against $24.5 billion in 2007-08.

Rupee Spurts By 52 Paise To 2 Week High Of 48.20 - July 21, 2009

2009-07-21T15:17:00.001+05:30

The rupee appreciated sharply by 52 paise to close at a two-week high of 48.20/21 against the dollar on Tuesday due to the weakness of the US currency overseas and strong equity markets that powered the local unit to bounce-back. The US dollar fell to a six-week low in early trade on the London Exchange after equity markets surged on account of hopes of encouraging earnings.

In fairly active trade at the Interbank Foreign Exchange (forex) market, the rupee moved in a range of 48.18 and 48.56 after resuming stronger at 48.52/54 a dollar from its previous close of 48.72/73.

The rupee rallied to touch a two-week high of 48.18 in afternoon trade by cutting short a two-day losing streak, as the dollar slipped sharply against the euro.

The dealers said that buoyant equity markets also supported the rupee, raising the expectations of increased capital inflows in the second half of the calendar year. Moreover, the fresh signs of recovery in the economy also aided rupee sentiment.

Gold Importation Cut In Two To 12 Tonnes In June - July 21, 2009

2009-07-21T15:13:00.001+05:30

The imports of Gold imports dipped by 50 per cent in June as compared to the same period last year on account of the slowing demand amid a rise in prices. The imports of gold in June 2009 stand at 12 tonnes as against 24 tonnes in the same month last year, according to the data provided by the Bombay Bullion Association.

The demand for gold declined as the prices hovered high between between Rs 14,500 to Rs 15,000 per 10 grams level in the domestic markets, Bombay Bullion Association President Suresh Hundia said. The imports of gold in May stand at 17.8 tonnes.

The imports of Gold have been sluggish so far this year and was at 51.6 tonnes during the period between January-June 2009 as compared to 139 tonnes in the same period last year, the data stated. In January, only 1.8 tonnes of gold was imported however no imports was reported during February and March on account of lack of demand following high gold prices, which were ruling over Rs 15,000 per 10 grams level then.

Foreign Institutional Investors Inflow Crosses $6 Billion - July 20, 2009

2009-07-20T15:12:00.001+05:30

Foreign Institutional Investors have shown their confidence in the Indian markets by injecting more than $6 billion, or about Rs 29,940 crore this year, with over $1 billion coming in July alone. The overseas investors are the net purchasers of Indian stocks worth $6.18 billion (Rs 29,940.30 crore) from January to July this year.

According to the data with the Securities and Exchange Board of India, FIIs were the gross buyer of shares worth Rs 2,98,675.70 crore while the sale of equities by them valued at Rs 2,68,735.30 crore, that resulting in a net inflow of Rs 29,940.30 crore ($6.18 billion).

The FIIs in July made a net investment of Rs 5,637 ($1.16 million) in the domestic equity markets. However, during the same period, the BSE Sensex has lost nearly 2%.

Till now, FIIs are the net seller of debts worth Rs 973.60 crore ($151 million), even as the infusion by the overseas investors stood at Rs 4,485.10 crore ($932 million) so far in July, the Sebi data said.

Right Instant To Go Into Long-Term Oil Contracts Of CII - July 20, 2009

2009-07-20T15:08:00.001+05:30

The Confederation of Indian Industry (CII) has said that entering into long-term crude oil contracts and the strategically acquiring oil acreages overseas is necessary for India''s future energy security. The accelerated demand for energy makes it imperative for India to garner assured and continuous supply of energy at reasonable prices through internal efforts and acquiring international acreages.

As per CII estimates, in a business-as-usual 8% GDP growth rate scenario, the demand of Oil would be 328 Mtoe by 2030, a growth of 3.8% year-on-year.

Moreover, the chamber also emphasised that the industry, both in public and private sectors, should collaborate to secure oil equity overseas.

Even though the crude oil price has increased almost 100 per cent since February to reach $70 a barrel, it is still below $100. This is perhaps the right time to secure long-term oil supply deals at an affordable price, said the chamber.

"Ensuring India''s energy security requires active participation from the Indian industry, both public and private sectors, with support from the Government, to secure fuel supply at predictable and affordable prices," said Mr Chandrajit Banerjee, Director-General, CII.

Gold Exchange Traded Funds Investors In India Grow By 100 Per Cent - July 20, 2009

2009-07-20T15:03:00.001+05:30

With the rising of gold prices to new high almost every month, the investors in India have started to show a totally new-found interest in the gold funds. The gold exchange traded funds (ETFs) are new in India, but they have given an impressive returns of more than 20 per cent in the last one year. The gold fund managers in India say the ETFs collections are rising and investors are increasing by a 100 per cent year-on-year.

"Gold ETFs are continuing to pick up in India. Gold collection ETFs rose 24.6 per cent to 5.931 tonnes from 4.761 tonnes a year ago," Arvind Chari, fund manager, Quantum Mutual Fund that runs a gold ETF in India said. He also said that the gold ETFs are emerging as the fasting growing investment segment in India.

Gold ETFs in India, which was launched in 2007, are managed by six fund houses including Benchmark Asset Management as well as UTI Mutual Fund, Kotak Mahindra Mutual Fund, Reliance Capital Asset Management, Quantum Mutual Fund and the State Bank of India.

Despite of the fact that the Gold collections under the ETFs are growing in India year on year, they remain negligible when compared to India''s imports of around 700 tonnes annually.

The main problem for rapid growth of gold ETFs in India is said to the lack of awareness and complicated investment norms.

The five gold ETF funds put together hold just above five tonnes of gold. According to the World Gold Council, the Indian households own gold of about 15,000 tonnes that includes around 10 per cent of global stocks.

Reserve Bank Of India To Ensure Stable Interest Rates - July 18, 2009

2009-07-18T14:02:00.001+05:30

The Reserve Bank of India (RBI) today said that it would ensure a benign and stable interest rate regime to safeguard the common man''s interest as well as ensure adequate liquidity in the system. "The RBI''s effort is to ensure a benign and stable interest rate regime ... It is for ensuring adequate liquidity in the system.

We are trying to keep interest rates benign," Reserve Bank Deputy Governor K C Chakrabarty told reporters.

The banks, particularly in the private sector have to lower the lending rates in the period ahead in the face of high competition in industry, Chakrabarty said on the sidelines of the Skoch BFSI summit being held in Mumbai.

Moreover, he said that the individual conditions of banks and the inflationary situation will determine whether there will be any cut in lending rates by the banks.

He also added that if the cost of funds remains high in the system, banks tend to hike their lending rates.

Regarding the credit growth, he said that credit outflow is likely to boost in the coming quarters due to the signs of recovery in the economy. The apex bank will ensure adequate liquidity in the banking system, he said.

Gold Consolidates As $940 Looks Difficult To Breach - July 18, 2009

2009-07-18T13:59:00.001+05:30

Gold dipped in red after early gains as $940 looked difficult to breach and also as the US dollar surged against the currency rivals today. Overall the global equities were higher today with European shares up, putting markets on track for a fifth straight session of gains as major U.S. companies continued to beat earnings expectations. Asia stocks also rose, but gains were tentative ahead of the weekend.

U.S. stock futures fell after General Electric's second-quarter results, pointing to a lower opening on Wall Street.

Oil slid below $62 a barrel and base metals also declined, as traders turned away from industrial commodities amid lingering concerns over the outlook for the global economy.

Gold is seen consolidated in a narrow range these days, in the last 2 days it has traded in the range of $941 – 933.3 which is the range of $7.7.

There is no such striking factor in the markets right now, which will boost the gold very easily. It has been facing stiff resistance at the $941 levels and may continue to face it in the near term. The deflationary scenario has overshadowed all the positive factors for gold.

MCX August bullion faced stiff resistance near Rs 14790 levels as was recommended in the morning update.

It was last seen quoting at Rs 14731 up nearly Rs 20 per 10 grams. A break of days high may take it to 14825 and 14865 levels. Otherwise the supports are at 14690 and 14655 levels.

Holdings of the largest gold exchange-traded fund, the SPDR Gold Trust, inched up 0.31 tonnes on Thursday.

However, London's ETF Securities said it saw an outflow of nearly 40,000 ounces that day from its ETFS Physical Gold product.

Non-Farm Payrolls Fail To Lift Gold: June's US non-farm pay rolls bumped up, raising questions about when the US economy will bottom and brought to an end a string of improvements dating back to February.

Payrolls have been improving since the month of February 2009; June was the first month when it surged above the previous month's payrolls.

Non farm pay rolls changed the sentiments for the entire financial world, with the equities taking a downward path, Yen gaining strength, crude oil sinking to nearly 2 month lows, gold also tumbled to near $900 levels its lowest level since May 5 2009.

Precious Metals Closing Stages Diverse - July 17, 2009

2009-07-17T18:35:00.000+05:30

Precious metal prices ended mixed on Thursday, 16 July, 2009. Gold prices ended their three day winning streak and ended moderately lower. However, silver managed to gain for the day. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $935.4, lower by $4 (0.4%) an ounce on the New York Mercantile Exchange.

Before today, gold had risen by 3% in the past three sessions. Last week, gold ended lower by 1.6%. Year to date, gold prices are higher by 5.9%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Thursday, Comex silver futures for September delivery rose 4.1 cents (0.2%) at $13.235 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 17.3% this year. For 2008, silver had lost 24%.

The Philadelphia Fed's manufacturing index in US slipped to negative 7.5 in July from negative 2.2 in June.

Though market was expecting a slide, the drop was more than expected. Readings below zero in the Philly Fed diffusion index indicate contraction in activity.

The index measures the breadth of economic activity across firms. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 53 (0.35%) at Rs 14,717 per 10 grams. Prices rose to a high of Rs 14,816 per 10 grams and fell to a low of Rs 14,694 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 37 (0.17%) lower at Rs 21,821/Kg. Prices opened at Rs 21,830/kg and fell to a low of Rs 21,727/Kg during the day's trading.

Bond Prices Positive On Reserve Bank Of India Auction Plan - July 17, 2009

2009-07-17T16:03:00.001+05:30

The bond prices shot up by about 50 paise on July 16 on the back of the government''s announcement of the details regarding its borrowing programme between July and September. Although the RBI released the auction calendar after market hours, the bond prices grew during the day as the market participants were anticipating a lower weekly borrowing programme, said bond dealers.

Given the current liquidity, Rs, 50,000 crore of additional borrowing will not be very difficult for the market to absorb.

There were expectations that Rs 15,000 crore of government securities would be issued by RBI every week. But, according to the RBI''s auction calendar, it will issue Government securities worth Rs 12,000 crore every week till September.

In the last two weeks of September, the Central bank will issue securities worth Rs 7,000 crore and Rs 8,000 crore.

Rupee Be Grateful For In Opposition To Dollar - July 17, 2009

2009-07-17T15:58:00.001+05:30

Extending the previous day''s gains, the Indian rupee appreciated by 12 paise at 48.51 against the US dollar in early trade on Thursday on the back of hopes of increased capital inflows by foreign funds as markets may open notably higher in line with firming Asian bourses. At the Interbank Foreign Exchange (Forex) market, the rupee was quoted higher at 48.51 a dollar, a gain of 12 paise over the previous close of 48.63.

The rupee gained 33 paise in the previous day. The forex dealers said that the rupee continued to draw support from a sharp rally in local stocks and weakness in the dollar against the other currencies in global markets.

Precious Metals Get Higher For Third Instantly Day - July 16, 2009

2009-07-16T16:01:00.001+05:30

Precious metal prices rose for the third straight day on Wednesday, 15 July, 2009. Prices rose with higher crude price and weak dollar. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $939.4, higher by $16.6 (1.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.6%. Year to date, gold prices are higher by 6.3%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Wednesday, Comex silver futures for September delivery rose 35.5 cents (2.7%) at $13.208 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 17.1% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the U.S. dollar lost ground against most of its major rivals after data showed U.S. consumer prices rose in June at their fastest pace in nearly a year.

The dollar index, which weighs the dollar against a basket of six other currencies, fell by almost 0.7% during the day.

The Labor Department reported on Wednesday, 15 July, 2009 that U.S. consumer prices rose a seasonally adjusted 0.7% in June, 2009 matching expectations as gasoline prices jumped higher.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 114 (0.77%) at Rs 14,770 per 10 grams. Prices rose to a high of Rs 14,789 per 10 grams and fell to a low of Rs 14,631 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 325 (1.5%) higher at Rs 21,858/Kg. Prices opened at Rs 21,565/kg and rose to a high of Rs 21,990/Kg during the day's trading.

Govt To Borrow $22.6 Billion More Up To Sept: RBI - July 16, 2009

2009-07-16T15:57:00.001+05:30

The government will borrow additional Rs1.1 trillion ($22.6 billion) before the end of the first half of the fiscal that began on 1 April, a Reserve Bank of India (RBI) deputy said on Thursday, sending bond yields lower as the figure was les than the market expectation. Shyamala Gopinath told reporters that the borrowing would be done in 10 tranches and for this, a calendar would be published later today.

The government so far has borrowed Rs 1.8 trillion in the fiscal year 2009-10. Gopinath said the central bank would continue to buy back government bonds from the market, depending on liquidity conditions. It has so far bought back Rs29,850 crore in the fiscal year and the target was Rs80,000 crore.

Price Increases By The Side Of 1.21 Per Cent On July - July 16, 2009

2009-07-16T15:51:00.001+05:30

India''s inflation stood at (-) 1.21 per cent for the week ended July 4 against (-) 1.55 per cent in the previous week mainly due to higher prices of fuel items. The wholesale price index during the corresponding week a year ago was as high as 12.19 per cent. The wholesale price index for all commodities for the week ended July, 4, 2009 rose by 0.7% to 236.4 from 234.7 for the previous week.

The index for ''Food Articles'' group dipped by 0.2% to 253.6 from 254.0 for the previous week. The index for ''Non-Food Articles'' group rose by 0.3% to 237.7 from 237.0 for the previous week.

Following the government decision to raise prices of petrol and diesel by Rs 4 and Rs 2 per litre, respectively effective July 1, prices of naphtha rose 15 per cent, furnace oil 11 per cent, petrol 10 per cent, high-speed diesel 7 per cent and light diesel oil by 4 per cent.

Precious Metals Observer Of Unimportant Expand - July 15, 2009

2009-07-15T16:08:00.002+05:30

Precious metal prices registered little gains on Tuesday, 14 July, 2009. Prices rose as better than expected retail sales data in Wall Street sent some optimistic picture about the current economy. The weak dollar was also responsible for precious metal prices ending higher today. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, gold for August delivery ended at $922.8, higher by $0.30 (0.03%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.6%. Year to date, gold prices are higher by 4.5%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Tuesday, Comex silver futures for September delivery rose 7 cents (0.5%) at $12.855 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 14.4% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which weighs the dollar against a basket of six other currencies fell by almost 0.3% earlier during the day. But then, it recovered to end almost flat.

The Commerce Department reported on Tuesday, 14 July, 2009 that retail sales in US rose a better-than-expected 0.6% in June, the strongest sales report since January's 1.7% increase.

In a separate report, the Labor Department reported on Tuesday, 14 July, 2009 that U.S. producer prices rose 1.8% in June, 2009.

It climbed the most since November 2007. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 60 (0.41%) at Rs 14,656 per 10 grams.

Prices rose to a high of Rs 14,690 per 10 grams and fell to a low of Rs 14,566 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 135 (0.63%) higher at Rs 21,533/Kg. Prices opened at Rs 21,440/kg and rose to a high of Rs 21,653/Kg during the day's trading.

India Introduction Gold Significance 76 Lakh During Apr-Jan - July 15, 2009

2009-07-15T16:03:00.000+05:30

The total import of gold by India was worth Rs 76 lakh during first ten months of 2008-09 fiscal, the government informed the Parliament on July 13. The total value of imports in 2007-08 stood at Rs 67 lakh, it said. In a written reply to the Lok Sabha, Minister of State for Commerce Jyotiraditya Scindia said that the rough estimates place gold demand in the country at 700-800 tonnes per annum.

Moreover he said, "The movement in prices of gold in India in the recent period is broadly in tandem with similar movement in international markets."

The various factors that affect the gold price are the demand and supply, investor interest, interest rates, movement in the exchange rate of US dollar vis-a-vis other international currencies, he said.

Besides this, the minister said that the total rubber imports of the country stood at 44,083 tonnes during first three months of the current fiscal while the exports have remained at 834 tonnes.

Gold Rises For Third Day On Compact Global Cues - July 15, 2009

2009-07-15T15:54:00.002+05:30

The gold prices strengthened for the third day, on July 14, rose Rs 25 to close at Rs 14,830 per 10 gram in the bullion market due to buying by stockists and jewellers amid firming global cues. In line with this, the silver prices surged by Rs 200 to close at Rs 21,700 per kg due to the strong industrial demand.

According to marketmen the gold prices shot up after buying by stockists and jewellers ahead of festival season and firming overseas trends.

The gold rose for a fourth day in London as higher oil prices and a weaker dollar increased demand for bullion as an alternative investment and hedge against rising consumer prices.

On the domestic arena, the standard gold and ornaments shot up by Rs 25 each to Rs 14,830 per 10 grams and Rs 14,680 per 10 gram respectively.

In line with this, the sovereign also grew Rs 25 to Rs 12,350 per piece of eight gram. On the other hand, the silver ready surged by Rs 200 to Rs 21,700 per kg, while weekly-based delivery grew by Rs 160 to Rs 21,460 per kg.

The silver coins grew by Rs 100 to Rs 28,900 for buying and Rs 29,000 for selling of 100 pieces.

Precious Metals Get Together Various Stand Out - July 14, 2009

2009-07-14T15:56:00.001+05:30

Precious metal prices rose on Monday, 13 July, 2009. Prices rose as the dollar pared earlier gains. Prices rose in spite of crude prices slipping further lower. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Monday, gold for August delivery ended at $922.5, higher by $10 (1.1%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.6%. Year to date, gold prices are higher by 4.5%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Monday, Comex silver futures for September delivery rose 14 cents (1.1%) at $12.785 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 13.9% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the dollar fell against the euro, with the European currency trading up 0.3%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 96 (0.66%) at Rs 14,596 per 10 grams.

Prices rose to a high of Rs 14,625 per 10 grams and fell to a low of Rs 14,505 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 135 (0.63%) higher at Rs 21,398/Kg. Prices opened at Rs 21,299/kg and rose to a high of Rs 21,446/Kg during the day's trading.

Rupee Cataract To Two-Month Near To The Ground - July 14, 2009

2009-07-14T15:48:00.002+05:30

The rupee fell to a two-month low on the back of uncertainty about the economic recovery in the global markets. The rupee opened at 49.10/12 and touched a low of 49.44/46, during day trade. It closed at 49.08/10 as against the Friday''s close of 49.02. Along with this, the dollar also gained against other Asian currencies. In the forward premia market, the six-month closed at 2.32 per cent (2.41 per cent) while the one-year at 2.25 per cent (2.26 per cent).

Bond Prices Go Away Positive - July 14, 2009

2009-07-14T15:38:00.000+05:30

The bond prices shot up on July 13 after the announcement by the Reserve Bank of India (RBI) regarding the quantum of borrowing for the week, which was lower than the market expectation. RBI announced an auction of Rs 12,000 crore of government securities while the markets were expecting the amount to be Rs 15,000 crore. Moreover, the sharp fall in US treasury yields give a boost to the prices, added the dealer.

Substantial buying was witnessed in almost all the papers. The total traded volumes on the order matching system were substantially higher at Rs 13,625 crore (Rs 5,735 crore).

Precious Metals Jump Down For A Second Time - July 13, 2009

2009-07-13T16:28:00.002+05:30

Precious metal prices fell on Friday, 10 July, 2009. Prices fell in synchronization with crude price and strong dollar. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, gold for August delivery ended at $912.5, lower by $3.7 (0.4%) an ounce on the New York Mercantile Exchange. For the week, gold ended lower by 1.6%. Year to date, gold prices are higher by 3.4%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (12%) since then.

On Friday, Comex silver futures for September delivery lost 29 cents (2.2%) at $12.645 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. For second quarter, silver rose 4.5%. Year to date, silver has climbed 12.8% this year. For 2008, silver had lost 24%.

Crude oil has lost about 10% this week as a new report from the International Energy Agency reaffirmed concerns about weak demand. The dollar was higher against most of its major rivals.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year. At the MCX, gold prices for August delivery closed higher by Rs 5 (0.03%) at Rs 14,500 per 10 grams.

Prices rose to a high of Rs 14,504 per 10 grams and fell to a low of Rs 14,487 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 7 (0.03%) higher at Rs 21,263/Kg. Prices opened at Rs 21,247/kg and rose to a high of Rs 21,279/Kg during the day's trading.

Govt Borrowings Won Alteration Interest Rates - July 13, 2009

2009-07-13T14:51:00.001+05:30

Finance Minister Pranab Mukherjee assured that interest rates would not increase in the coming few months due to borrowing programme of the government. Finance Minister has projected government borrowings of Rs 4.51 lakh crore for the present fiscal. Mukherjee said, “Last fiscal also the Reserve Bank of India (RBI) was careful in debt management, and this year also we will ensure that the private sector can avail loans at affordable rates, and do not pay higher interest rate,”.

However, bankers have been expecting hike in interest rates in the next six months, due to the government borrowing and the difference between the consumer and wholesale price indexes.

Gold Recovers On Top Of Compact Significant Cues - July 13, 2009

2009-07-13T14:46:00.001+05:30

The gold prices made a sharp rebound on Saturday after declining for two days and gained Rs 20 to Rs 14,710 per ten gram in Delhi due to the emergence of buying at existing lower levels influenced by firming global trend. However, on the other hand, the silver remained under selling pressure and fell by Rs 200 to Rs 21,400 per kg. The standard gold and ornaments that remained in negative zone since last two trading sessions, gained Rs 20 each to Rs 14,710 and Rs 14,560 per ten gram respectively.

However, the sovereign remained flat at Rs 12,300 per piece of eight gram. Meanwhile, the silver remained under selling pressure, with silver ready falling by Rs 200 to Rs 21,400 per kg while the weekly delivery by Rs 180 to Rs 21,260 per kg.

Govt No Plan To In Secret Place Gilts With Reserve Bank Of India - July 10, 2009

2009-07-10T15:26:00.000+05:30

Despite the fiscal deficit projected to touch 6.8 per cent of the gross domestic product (GDP) in the year ending March, the government said that it is not planning to privately place gilts with the Reserve Bank of India (RBI) as of now. "At present, notwithstanding the 6.8 per cent fiscal deficit projected in Budget estimate 2009-10, the government does not propose to invoke the above provisions of the Fiscal Responsibility and Budget Management (FRBM) Act for facilitating RBI participation in the primary market for government securities," the finance ministry said in a statement.

The government said that the amount under OMO and the decision to buy or sell gilts in the secondary market are determined by the prevailing liquidity conditions.

The Finance Secretary Ashok Chawla, earlier this week, had said that 50 per cent of the government''s borrowing this year will have to be supported by OMO.

The Budget has pegged the government''s gross market borrowing for the current financial year at a record high of Rs 4.51 lakh crore as against the interim Budget estimate of Rs 3.62 lakh crore.

No Revolutionize During Eliminate Income Tax - July 10, 2009

2009-07-10T15:22:00.001+05:30

With the meager monsoons in the large parts of Northern India, the government has put on hold, the review of excise as well as service tax rates. Many were watching closely about this decision. In this year''s budget, there is no rollback on excise and service tax rate cuts and that could be the way Pranab Mukherjee keeps it all year.

As per the sources, the worries of a poor monsoon are likely to spook all plans to hike excise and service tax rates later in the year. There were indications that both taxes may be reviewed in September-October.

However, to bridge shortfall of the indirect tax revenue, the finance ministry was initially keen to increase the Central Excise rate to10 per cent from 8 per cent.

The view of the government is based on the premise that a poor monsoon is expected to hit hard on the goods demand, especially in rural India and under these circumstances, a correction in the mid fiscal in indirect tax rates could be counter productive.

The monsoon factor could depress the revenue collections and there could be shortfall of indirect tax due to depressed sales and unchanged of central excise and service tax. The indirect tax collections between April-May are already a negative, that is, 28 per cent.

Precious Metals Make Progress Since Two Month Lows - July 10, 2009

2009-07-10T15:18:00.002+05:30

Precious metal prices rose from their two month lows on Thursday, 09 July, 2009. Prices rose in synchronization with as crude price which ended its six day losing streak. Prices also rose due to the weak dollar. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $916.2, higher by $6.9 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.1%. Year to date, gold prices are higher by 3.8%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (12%) since then.

On Thursday, Comex silver futures for September delivery gained 8.3 cents (0.6%) at $12.935 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 15% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value fell. The euro gained more than 1% against the dollar. Crude prices ended marginally higher today breaking their six day of continuous losing streak.

Crude oil prices settled around $61 today. Crude had given up almost $13 in the past six sessions. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 15 (0.1%) at Rs 14,481 per 10 grams.

Prices rose to a high of Rs 14,525 per 10 grams and fell to a low of Rs 14,430 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 72 (0.33%) lower at Rs 21,501/Kg. Prices opened at Rs 21,589/kg and fell to a low of Rs 21,341/Kg during the day's trading.

Precious Metal Prices Drop To A Large Extent Worse - July 09, 2009

2009-07-09T16:08:00.002+05:30

Precious metal prices dropped substantially lower on Wednesday, 08 July, 2009. Slipping crude prices coupled with the dollar which remained strong erased more shine from precious metals by decreasing their appeal as a hedge against inflation. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $909.3, lower by $19.8 (2.1%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.1%. Year to date, gold prices are higher by 3%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (13%) since then.

On Wednesday, Comex silver futures for September delivery lost 36.8 cents (2.8%) at $12.852 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 14.4% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar index, a six-currency measure of the greenback's value rose.

Dollar rose against the euro. The index rose as leaders from the Group of Eight nations kicked off their meeting today.

Crude prices traded lower once again today due to the strong dollar and economic worries. Crude oil prices settled around $60 today. With today's drop crude has given up almost $13 in the past six sessions.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 108 (0.73%) at Rs 14,496 per 10 grams.

Prices rose to a high of Rs 14,624 per 10 grams and fell to a low of Rs 14,457 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 244 (1.11%) lower at Rs 21,573/Kg. Prices opened at Rs 21,761/kg and fell to a low of Rs 21,460/Kg during the day's trading.

Exports Decrease 29 Per Cent At Home June - July 09, 2009

2009-07-09T16:07:00.001+05:30

The exports of India declined by 29% in June 2009, Union minister for commerce & industry Anand Sharma told the Rajya Sabha on Wednesday. The country''s exports are experiencing a declining trend for the last nine months. The growth in exports had registered a fall of 29.2% at $11 billion in May 2009 while the fall was 34% in April 2009. As per a sample study conducted by the commerce department, 648 exporting units in India reported a loss of Rs 8,982 crore between August 2008 and April 2009.

The exporting units in 17 sectors witnessed job loss of 134,593 people during the period, another survey conducted by the department on retrenchment said.

"This does not reflect the total job losses, which would be higher," minister of state of commerce & industry Jyotiraditya M Scindia informed the House.

Mr Sharma said the pace of export fall had begun to recede and expressed optimism that the measures announced by the Finance Minister in the budget would help the export sector.

The finance minister in the budget decided to continue with the interest rate subvention (discount) scheme and the export credit guarantee scheme for exports beyond September 2009 till March 2010.

The minister also said that it is against creating barriers against imports into the country as India itself has been opposing the protectionist policies that block the flow of global trade.

Rupee Locks Of Hair By The Side Of Seven Week Low - July 09, 2009

2009-07-09T16:02:00.002+05:30

The rupee on Wednesday virtually touched the crucial 49 level before closing at a seven-week low of 48.88/89 against the US dollar, cheaper by 44 paise, backed by the weak local stocks amid heavy capital outflows. The rupee was last seen at this level in May. It had closed at 49.40/42 a dollar on May 15 and in the following trading day, it closed at 47.88/89 against the dollar.

In the domestic arena, the equity markets as the Indian benchmark Sensex declined by 401 points or 2.83 per cent on account of weakness in global stocks in the wake of rising doubts about recovery in the economy.

The rupee resumed weak at 48.76/77 a dollar against its previous close of 48.44/45 a dollar and later traded in a range of 48.73 and 48.94 during the day.

The dealers at the Interbank Foreign Exchange market said that the fall in equity market raised fears of capital outflows even as the foreign institutional investors (FIIs) pulled out sizeable funds on July 7. They said there was little dollar buying or selling during the day.

Precious Metals Closing Stages Diverse - July 08, 2009

2009-07-08T16:02:00.000+05:30

Precious metal prices ended mixed at USA on Tuesday, 07 July, 2009. Gold ended higher while silver ended lower after a full day of volatile trading. The dollar remained strong trying to erase some shine from precious metals by decreasing their appeal as a hedge against inflation. But gold managed to end higher today. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, gold for August delivery ended at $929.1, higher by $4.8 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.1%. Year to date, gold prices are higher by 5.1%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (11%) since then.

On Tuesday, Comex silver futures for September delivery lost 1.8 cents (0.1%) at $13.22 an ounce.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 17.2% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, a six-currency measure of the greenback's value stayed steady. Dollar rose against the euro.

The index rose on speculation that leaders from the Group of Eight nations will make efforts later this week to shore up the greenback.

Crude prices traded lower once again today due to the strong dollar. Crude oil prices traded lower by 2% around $62/barrel. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 85 (0.6%) at Rs 14,604 per 10 grams.

Prices rose to a high of Rs 14,620 per 10 grams and fell to a low of Rs 14,495 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 3 (0.01%) lower at Rs 21,817/Kg. Prices opened at Rs 21,850/kg and fell to a low of Rs 21,700/Kg during the day's trading.

Increasing Fiscal Shortage A Cause For Concern - July 08, 2009

2009-07-08T15:31:00.000+05:30

The global rating agency Moody''s on Tuesday expressed concern on India''s high fiscal deficit projection of 6.8 per cent for 2009-10. With out a clear road map for the disinvestment and structural reforms, the rating agency cautioned that the situation may become complicated.

"We remain cautious about how the government can hope to avoid complicating monetary management, without advancing structural reforms or re-prioritising expenditures or pushing for disinvestments more vigorously," Moody''s Vice President - Senior Analyst (Sovereign Risk Group) Aninda Mitra said from Singapore.

"We also recognise that this government has the political scope to formulate a robust response to emerging challenges and this is also incorporated into the stable outlook we maintain on the sovereign ratings," Moody''s said.

Moody''s said that the budget presented by the government is growth-oriented and contains a slightly larger than expected "headline deficit number" but the same is broadly consistent "with near-term stability in the government''s debt trajectory".

Gold Import Duty Hike May Urge Smuggling - July 08, 2009

2009-07-08T15:27:00.002+05:30

The World Gold Council (WGC), on Tuesday said that the hike in import duty of gold, which was announced by the Finance Minister in the Union Budget, may lead to additional gold smuggling, especially when there is high demand especially during the festival season. In the Union Budget for 2009-10, Pranab Mukherjee, announced a hike of 100 per cent in the customs duty on serially-numbered gold bars as well as gold coins to Rs 200 per 10 grams.

Moreover, the customs duty on other forms of gold and silver also has been doubled to Rs 500 per 10 grams while Rs 1,000 per kilogram, respectively.

"We hope that this higher duty rate does not add to significant trading through non-official channels.

The difference in price between the internationally-sourced gold and Indian domestic gold widens to 3-3.5 per cent per 10 grams due to additional taxation and this could lead to additional smuggling, especially during periods of high demand during festival season," WGC said in a statement in Mumbai.

Moreover, WGC has warned that the hike in the import duty of gold would put added pressure on the gold market.

The Indian Government in its recent Union budget announced that it will invest more in the agricultural as well as industrial and social sectors in an effort to boost consumer confidence and drive economic growth, which resulting in a budget increase of 36 per cent. To help pay for this package, the gold industry has become a tax target, WGC said.

Gold Looks Up And About On Hike In Import Duty - July 07, 2009

2009-07-07T15:57:00.001+05:30

The gold prices recovered on the bullion market on Monday due to fresh local demand. Along with this, the silver also firmed up further owing to persistent demand from industrial users. The customs duty on silver has also been increased to Rs. 1,000 a kg from Rs. 500. In the domestic market, the standard gold (99.5 purity) shot up by Rs. 80 (10 gram) to Rs. 14,535 from previous weekend''s level of Rs. 14,455.

In line with this, the pure gold (99.9 purity) also firmed up with a similar margin to Rs. 14,605 from Rs. 14,525.

The silver ready (.999 fineness) hardened by Rs. 120 to Rs. 22,120 from Rs. 22,000 a kg previously.

Rupee Tumbles By 65 Paise To A Two-Week Low - July 07, 2009

2009-07-07T15:54:00.001+05:30

The forex market even did not from the post-Budget weak stock market sentiments on July 6, with the rupee falling 1.4%-its biggest one-day drop in three months-after the government projected a higher-than-expected fiscal deficit target. The finance minister told on July 6 that the fiscal deficit of the government for the current fiscal is likely to go up to 6.8% as against 6.2% in the last year.

The partially convertible rupee closed at 48.56/59 per dollar, which is its lowest close in over a week.

The rupee fell as far as 48.57 during trade, which is its lowest since June 25. The loss was the biggest since it shed 1.5% on March 2, a day before it hit an all-time low of 52.2.

Bond Prices Fall On Higher Borrowing Plan - July 07, 2009

2009-07-07T15:52:00.000+05:30

The bond prices dipped on July 6 after the announcement by the Government of a substantially higher borrowing programme of Rs 4.5 lakh crore for the fiscal in the Budget, which was much above the market expectations. The huge borrowing programme is likely to put pressure on the interest rates. This increased borrowing may exert upward pressure in yields on a week-on-week basis, said Mr B. Prasanna, Managing Director and Chief Executive Officer, ICICI Securities Primary Dealership Ltd.

The total traded volumes on the order matching system were lower at Rs 12,395 crore (Rs 14,405 crore).

The 6.07 per cent-5 year-2014 paper opened at Rs 99.4 (6.21 per cent YTM) and closed at Rs 98.43 (6.44 per cent YTM) as against the previous close of Rs 99.3 (6.23 per cent YTM).

Moreover, the 7.94 per cent-12 year-2021 paper opened at Rs 107.45 (7 per cent YTM) and closed at Rs 105.41 (7.25 per cent YTM), down by more than Rs 2 from the previous close of Rs 107.29 (7.02 per cent YTM).

Budget Could Provide For Recapitalisation Of PSU Banks - July 06, 2009

2009-07-06T16:08:00.001+05:30

The Finance Minister Pranab Mukherjee may announce recapitalisation of public sector banks in order to help them meet the credit demand of productive sectors, especially those hit hard by the global economic downturn, in the Union Budget scheduled today. Last month, he had given an indication to this effect. "As the main shareholder of the public sector banks, the government has already announced that it wants to recapitalise public sector banks to enable them to achieve the CRAR (Capital to risk-weighted Assets Ratio) of 12 per cent," the minister had said.

Moreover, he also had said that the government will ensure that the credit growth of public sector banks does not suffer for requirement of capital.

The banks that likely to benefit include Bank of Maharashtra and Dena Bank. The capital infusion will help these banks to raise the capital adequacy to more than 12 per cent.

The government has announced capital infusion to the extent of about Rs 2,150 crore. Out of this, UCO Bank will get Rs 750 crore while Central Bank of India and Vijaya Bank will receive Rs 700 crore each.

Besides, the Cabinet has also given a green signal to the proposal for capital restructuring of United Bank of India.

Last fiscal, the government infused Rs 1,650 crore in three banks- Central Bank of India as well as UCO Bank and Vijaya Bank. UCO Bank received Rs 450 crore while Central Bank of India Rs 700 crore and Vijaya Bank Rs 500 crore.

However, the government will seek additional fund of $3 billion (about Rs 14,440 crore) from the World Bank for the recapitalisation of public sector banks.

Budget May Possibly Announce Incentives For Exporters - July 06, 2009

2009-07-06T14:51:00.000+05:30

In the backdrop of global economic slowdown, the exports front has been drastically hit and the exporters'' community can expect some incentives in the budget. The export promotion councils as well as the Federation of Indian Export Organisations (FIEO) had met Finance Minister Pranab Mukherjee and Commerce and Industry Minister Anand Sharma and proposed incentives, including credit at 7 per cent interest rate as well as income tax holiday for five years.

The country''s merchandise exports grew just 3.4 per cent to $168.7 billion in the second half of 2008-09 due to global downturn.

But on the other hand, the shipments have been dropping for eight consecutive months since October 2008, that costing 5 million jobs, as per FIEO estimates.

The exporters say they are working on thin margins and taxation of the profit leaves them with no money for modernisation and expansion of manufacturing facility.

Growing Fiscal Shortage Position To Be India Impasse - July 06, 2009

2009-07-06T14:45:00.003+05:30

As anything in excess is not good, anything in deficit is also as bad for an economy that intends to achieve inclusive growth. India has been witnessing a burgeoning fiscal deficit scenario in the past few years and the rate has worsened further with the country's fiscal deficit soaring by 64% in April 2009 as against the previous year. The present union budget will have to take strenuous efforts to reduce the growing burden if it has to ensure stability on the public finances front and achieve an optimal level of fiscal consolidation.

Fiscal deficit is an economic phenomenon, where the Government's total expenditure surpasses the revenue generated.

Off late, this particular anomaly has been fretting economies throughout the world as the great global crisis made its presence felt virtually everywhere.

In other words, mounting fiscal deficit has resulted as governments are spending beyond their means to help their respective economies emerge from the financial mayhem.

The fiscal monster has begun raising its ugly head in India as well. The enormous fiscal stimulus packages released by the Indian government by reducing different taxes and duties and also by raising expenditures have radically swelled the country's debt levels.

The cut in Cenvat rate from 14% to 10% and then to 8%, service tax from 12% to 10% and reduction in customs duty on a host of items resulted in a 17% decline in gross tax revenues.

India's fiscal deficit has been escalating in the last couple of years thanks to the global financial contagion accompanied by the largesse policies adopted by the government in the last year with the implementation of the Sixth Pay commission as well as the farm loan waiver.

S&P, a leading global rating agency has pegged India's fiscal deficit to increase 6.5% of GDP, which will be the highest in almost two decades, that is, excluding the off-budget liabilities such as fertilizer subsidies and compensation to state-run oil companies.

Together, these liabilities are estimated to be another 4% of GDP, thus taking the total deficit into double digits, which is certainly a worrisome figure.

This indeed is a matter of concern for a country like India that has managed to achieve positive growth amidst the crisis that has hammered even the most developed nations of the world.

The global financial turmoil began in 2007 with the world's largest economy, United States of America as the epicenter and later spilling into all the other economies.

This had prompted a substantial injection of capital into financial markets, fearing a credit crunch, which had begun seeing demand oozing out from economies throughout the world.

Governments and central banks throughout the globe were undertaking gargantuan borrowings to aid the economies to emerge from the mayhem, considered to be the worst since the Second World War.

Slowing growth has shrunk revenues while the unprecedented size of discretionary fiscal stimulus has bloated expenditures in most major economies.

Thus, the massive borrowing programs to spur consumption have resulted in accumulation of public debt in large quantities in most of the countries.

This has led to a situation where a secular and synchronized rise in fiscal deficit has been noted around the world.

India has been going through the issue of fiscal deficit since a couple of years. The country had witnessed some respite on the fiscal front since the reforms in 1990's and the Asian financial crisis of 1997-98.

The Indian government had undertaken fiscal reforms in 1990s as a part of economic liberalization.

Fiscal consolidation began in the early 1990s with fiscal deficit declining from 6.6 per cent of GDP in 1990-91 to 4.1 per cent of GDP in 1996-97.

However, it faltered and started deteriorating in 1997- 98 due to the Asian financial crisis and reached a level of 6.2 per cent of GDP in 2001-02.

Besides, the Fiscal Responsibility and Budget Management (FRBM) Act, 2003 regime definitely put the country on a higher growth trajectory inspiring confidence in the medium to long term prospects of the economy.

The process of fiscal consolidation had resulted in improvement in fiscal deficit from 5.9 per cent of GDP in 2002-03 to 2.7 per cent of GDP in 2007-08.

However, the global crisis has cluttered all these good efforts and the fiscal discipline has lost over the concerns triggered by an across the board slowdown in the world economic activity.

The country had already shelled out two large stimuli in the form of the farm loan waiver and the sixth pay commission that accounted for almost 2% of the total GDP.

Last but not the least, poor monsoon conditions, would consequently lower the economy's GDP in the current financial year, making it very difficult to provide any room to improve the public finances.

The officials have downgraded the 2009 monsoon to 93% of normal which is a "below normal" figure - a cautious trimming of the "near normal" 96% forecast in April.

A delayed monsoon will hit crop production immensely, which in turn would churn poor agricultural growth numbers.

All the hopes of a recovery in the economy would be rendered meaningless if the monsoons fail to revive.

Based on the current developments on the global as well as domestic front, the upcoming budget is expected to give out a number larger than that indicated in the interim budget (5.5 per cent of GDP).

The mushrooming fiscal deficit ultimately will result in large burden on to the future generations to come with higher tax rates and higher interest rates.

The new union government has a significant role to play in reducing the country's deficit and achieving enduring stable growth simultaneously.

Ideally speaking, the budget should try and contain all the ingredients to reduce the rising fiscal burden.

A rise in government spending has resulted in a crowding out of private consumption and investment.

Thus, in order to pull out the excesses infused into the system by the next two to three years, the government could resort to disinvestment of public sector units (PSU's) in order to accrue funds for narrowing down the rapidly increasing fiscal deficit.

These large stimulus packages as well as tax cuts have made it quite implicit that India would have to witness a phase of high fiscal deficit that needs to be rightly tackled.

However, we cannot deny the political pressure that would surface for the new government refuting them to go ahead and reverse some of the cuts in indirect taxes that were introduced in the second half of last fiscal.

However, the newly elected government will have to keep their political diplomacy aside for a while and think wisely over how to reduce the burden of debt the country is undergoing.

Meanwhile, the reversal of expansionary policies are also not warranted at an hour when the main ideology for the Indian as well as other governments is to reduce burden on public and inculcate them to spend more in order for the trickle down economics strategies to work.

But again they should not fail to see the future, which would burden masses ahead with high taxation in order to earn the revenue lost in the current era.

Gold Pops Positive Action Limited As US Markets Shut - July 04, 2009

2009-07-04T14:14:00.000+05:30

Gold futures popped up in the mid London trades after trading in a tight band earlier as the action remained lull on account of closure of US markets today. COMEX Gold traded in the range of $ 934.3- 927.8 per ounce. Of late it was seen quoting at $ 933.7 up $ 2.7. In the currencies and data release, euro posted little reaction to May retail sales data. Sales volume across the 16-nation euro zone fell 0.4% in May, compared to market expectations for a 0.2% decline.

Earlier, a final reading of the June euro zone purchasing managers survey showed the composite purchasing managers index rose to 44.6 from 44.0 in May, exceeding a preliminary estimate of a rise to 44.4.

The reading still indicates a contraction in activity. A figure of less than 50 signals a majority of managers saw a drop in activity, while a figure of more than 50 signals expansion. The June reading marked the smallest decline in output since September, Markit said.

The British pound traded at $1.6334 versus the dollar, little changed from Thursday. The CIPS/Markit U.K. services PMI for June slipped to 51.6 in June from 51.7 in May, signaling that growth continued for a second month in a row but at a slower pace.

MCX counter was however under pressure due to rally in the Indian Rupee. MCX August gold was down nearly Rs 20 at Rs 14467 per 10 grams. It fell to as low as Rs 14440. It may rebound from Rs 14420 levels.

Call Rate Tops By The Side Of 3.20 Per Cent - July 04, 2009

2009-07-04T14:09:00.002+05:30

The inter-bank call rate closed at 3.20-3.25 per cent, as against the previous close of 3.20-3.30 per cent. There were no bids in the three-day repo auction under the first Liquidity Adjustment Facility (LAF) conducted by the Reserve Bank of India. In the reverse repo auction, there were 43 bids for Rs 1,00,510 crore. In the second LAF, there were 49 bids for Rs 57,040 crore in the reverse repo auction. In the CBLO auction, there were 432 trades for Rs 35,272.35 crore in the range of 0.10-2.60 per cent.

Inflation Thumbs Down Longer A Concern - July 03, 2009

2009-07-03T16:55:00.001+05:30

The Economic Survey for 2008-09 was presented by Finance Minister Pranab Mukherjee in Parliament today, 2 July 2009. The FM in his annual economic survey said that inflation was no longer a concern. Real interest rates remain high despite easing of monetary policy and high bank deposit rates are proving an obstacle for lowering lending rates, the Survey indicated.

Wholesale prices fell 1.3% in the week to 20 June 2009 from a year earlier after sliding 1.14% in the previous week, data released by government said today.

The central bank Governor Duvvuri Subbarao on 20 June 2009 had clarified that falling wholesale prices were only a statistical feature and did not mean India is suffering from deflation.

The Economic Survey, which is tabled by the Finance Minister before the presentation of the Budget, provides the government's assessment of the economy, outlines the problems facing the country and suggests measures for dealing with them.

The Union Budget for 2009-10 will be presented by the Finance Minister Pranab Mukherjee in the Parliament on Monday, 6 July 2009.

Indian Economy Sheds 6 Lakh Jobs In Four Months - July 03, 2009

2009-07-03T15:20:00.001+05:30

The Indian economy witnesses job loss of more than 6,00,000 Indians, many of whom employed in the gems and jewellery sector, in just four months from October 2008 due to the impact of the global financial meltdown. While about 5,00,000 people lost their jobs in the October- December 2008 period and more than 1,00,000 in January this year, the Economic Survey said.

The crisis takes a massive shape in September following the bankruptcy of American financial services major Lehman Brothers. Since then, millions of jobs have been shed worldwide, as companies resorted to huge layoffs as part of their cost cutting measures. The report said that during the three months from October to December 2008, there was a fall in employment of about half a million workers.

The sectors, which were the most hit by the financial turmoil are gems and jewellery, transport and automobiles. The most affected sectors were gems and jewellery, transport and automobiles where employment has dipped by 8.58 per cent, 4.03 per cent and 2.42 per cent, respectively during October to December 2008, it said.

Precious Metals Go Down Shine Another Time - July 03, 2009

2009-07-03T15:13:00.001+05:30

Precious metal prices fell at USA on Thursday, 02 July, 2009. Prices lost some luster today after the dollar strengthened today following a disappointing job market report from the Labor Department. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $931, lower by $10.3 (1.1%) an ounce on the New York Mercantile Exchange.

Yesterday, prices had gone up by almost 1.5%. For the week, gold ended lower by 1.1%. Year to date, gold prices are higher by 5.3%. Trading is closed on Friday in observance of the Independence Day holiday.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Thursday, Comex silver futures for July delivery lost 35.2 cents (2.6%) at $13.408 an ounce. For the week, silver ended lower by 1.2%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 18.6% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar index, a six-currency measure of the greenback's value, rose, rose by almost 1%. The dollar index dropped by 6.4% in the second quarter and is lower by 0.5% on a y-t-d basis.

The Labor Department reported on Thursday, 02 July, 2009 that the U.S. economy shed jobs at a faster pace in June than in May.

As per the report, nonfarm payrolls shrank by 467,000 in June, 2009, higher than the 325,000 decline expected and the 322,000 jobs lost in May.

The unemployment rate ticked higher to 9.5% in June from 9.4% in the previous month. There was only a very slight 8,000-downward revision to payroll losses in April and May. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 65 (0.44%) at Rs 14,484 per 10 grams.

Prices rose to a high of Rs 14,542 per 10 grams and fell to a low of Rs 14,418 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 367 (1.7%) lower at Rs 21,624/Kg. Prices opened at Rs 21,990/kg and fell to a low of Rs 21,480/Kg during the day's trading.

Gold Surges More Than $940 As Dollar Drop Place - July 02, 2009

2009-07-02T15:29:00.002+05:30

Gold futures moved above $940 an ounce as US dollar continued to shed against the Euro. Losses exacerbated even more in the US dollar after the ADP non arm data. The U.S. private sector shed 473,000 jobs in June, according to the ADP employment report released Wednesday. The report comes one day before the Labor Department reports on nonfarm payroll growth for June.

Over the past three months, monthly employment losses have averaged 492,000. This is an improvement over the 691,000 jobs monthly job losses averaged in the first quarter.

Also due are the Institute of Supply Management's manufacturing gauge headlines a crowded release schedule for the U.S., with releases also due pending home sales, construction spending, car sales and weekly energy inventories.

MCX August bullion contract futures also jumped to as high as Rs 14532 up Rs 81 per 10 grams. Same was last seen quoting at Rs 14508 up Rs 57.

The subsequent resistance comes around Rs 14580 and 14625 levels. However the supports are at 14410 and 14365 levels.

International Bullion futures for the upfront month contract are trading at $ 938.5 up $11.1 per ounce after striking the intra session high of $ 940.1.

A move above $ 941 may take it to 947 levels. Break of $950 will be crucial and may set the trend on either

Precious Metal Prices Of Drooping Money Bolsters - July 02, 2009

2009-07-02T15:23:00.003+05:30

Precious metal prices rose at USA on Wednesday, 01 July, 2009. Prices added more luster today as the dollar fell following a worse than expected employment report from a private company, a day ahead of the employment report expected from the Labor Department. But at the same, holdings in the biggest gold exchange-traded fund fell for the first session in four, restricting the rise in price.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $941.3, higher by $13.90 (1.5%) an ounce on the New York Mercantile Exchange.

Last week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 6.4%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Wednesday, Comex silver futures for July delivery rose 16.6 cents (1.2%) at $13.74 an ounce. Last week, silver ended lower by 0.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 21.2% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar index, a six-currency measure of the greenback's value, rose, fell by almost 0.7% on reports that U.S. private sector shed 473,000 jobs in June,2009.

The report comes one day before the Labor Department reports on changes in the nation's nonfarm payrolls for June.

As per the report, employment in the service-providing sector in June fell by 223,000. The goods-producing sector declined 250,000, and employment in factories dropped 146,000.

The dollar index dropped by 6.4% in the second quarter and is lower by 1.5% on a y-t-d basis. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 98 (0.7%) at Rs 14,549 per 10 grams.

Prices rose to a high of Rs 14,581 per 10 grams and fell to a low of Rs 14,415 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 67 (0.3%) higher at Rs 22,131/Kg. Prices opened at Rs 22,000/kg and rose to a high of Rs 22,131/Kg during the day's trading.

Rupee Rises While Auto Sales Open Up Position - July 02, 2009

2009-07-02T15:15:00.001+05:30

The rupee shot up for the fourth day on June 1. The rupee reversed an earlier loss as the the BSE Sensex rose 1.1 per cent after Maruti Suzuki said that June sales climbed 23 per cent, adding to signs that demand was picking up in Asia''s third-biggest economy. The rupee also gained momentum on speculation that some exporters bought the currency.

The rupee strengthened to 47.90 a dollar at the close in Mumbai from 47.905 the previous day.

Bullion Metals Go Down Additional Shiny Finish - July 01, 2009

2009-07-01T14:57:00.002+05:30

Precious metal prices fell at USA on Tuesday, 30 June, 2009. Prices fell today as the dollar rose today after consumer confidence data showed unexpected drop for latest month. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa. On Tuesday, gold for August delivery ended at $927.4, lower by $13.30 (1.4%) an ounce on the New York Mercantile Exchange.

Last week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 4.9%.

For the month of June, 2009, gold ended down by 5.4%. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. For the second quarter, gold ended higher by 0.5%. The metal had gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Tuesday, Comex silver futures for July delivery fell 27.3 cents (1.9%) at $13.574 an ounce. Last week, silver ended lower by 0.5%.

Silver ended 13% down for the month of June, 2009. For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades.

For second quarter, silver rose 4.5%. Year to date, silver has climbed 20% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, a six-currency measure of the greenback's value, rose, heading for the first gain in four sessions, after the business-backed Conference Board in New York said consumer sentiment declined this month.

The dollar index gained 0.4% today. The dollar index dropped by 6.4% in the second quarter and is lower by 1% on a y-t-d basis.

The Conference Board reported on Tuesday, 30 June, 2009 that reading on U.S. consumer confidence relapsed in June, falling to 49.3 from a slightly downwardly revised 54.8 in May.

After a large confidence jump in May, consumers once again grew more pessimistic in June about their present and future.

The present situation index declined to 24.8 in June from 29.7 in May, while the expectations index fell to 65.5 from 71.5.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 158 (1.08%) at Rs 14,451 per 10 grams.

Prices rose to a high of Rs 14,624 per 10 grams and fell to a low of Rs 14,407 per 10 grams during the day's trading.

At the MCX, silver prices for September delivery closed Rs 432 (1.93%) lower at Rs 21,924/Kg. Prices opened at Rs 22,405/kg and fell to a low of Rs 21,817/Kg during the day's trading.

Gold Drops Additional On Weak Global Cues - July 01, 2009

2009-07-01T14:54:00.001+05:30

The gold prices fell further on the bullion market in Mumbai due to sustained selling by stockists following the weakening trend in overseas markets. Silver also followed the same trend and declined due to subdued industrial demand. The Gold futures closed slightly lower on June 28 as the US dollar fluctuated against its major rivals. The August gold dropped by 30 cents to close at $940.70 an ounce on the Comex Division of the New York Mercantile Exchange.

The Silver July also dropped by 18.1 cents or 1.3 per cent to $13.847 an ounce. In the domestic market, the standard gold (99.5 purity) declined by Rs 60 per ten grams to Rs 14,580 as against the previous closing level of Rs 14,640.

Moreover, the pure gold (99.9 purity) also dipped by Rs 65 per ten grams to Rs 14,645 from Rs 14,710 previously.

The silver ready (.999 fineness) also ended lower by Rs 75 per kilo to Rs 22,760 as against Rs 22,835 the previous day.

India External Debt Shot Up At $230 Bn - July 01, 2009

2009-07-01T14:50:00.001+05:30

The external debt of India grew 2.4 per cent or $5.3 billion to $229.9 billion for the financial year ended March 31, the Reserve Bank of India (RBI) said on Tuesday. India, which has an external debt equivalent to 22 per cent of its gross domestic product (GDP), was already the fifth most indebted country in the world in 2007, the RBI said in a statement.

The current account that includes external trade deficit and remittances from overseas, had a deficit of $29.82 billion for last fiscal as compared to a deficit of $17.03 billion in the previous year.

Moreover, the capital account that comprises of components like foreign investment as well as external loans and foreign assistance, had a surplus of $9.15 billion for 2008-09 as compared to $107.94 billion in the year-ago period.

Bullion Metals Lose Some Luster - June 30, 2009

2009-06-30T15:30:00.000+05:30

Precious metal prices fell at USA on Monday, 29 June, 2009. Prices fell today as the dollar fluctuated throughout the course of the day. The dollar traded higher against its counterparts earlier during the day but then fell. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Monday, gold for August delivery ended at $940.7, lower by $0.30 (0.03%) an ounce on the New York Mercantile Exchange. Earlier during the day, it hit a high of $943.2.

Last week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 7%.

For the month of June, 2009, gold is still down by 4% on a m-t-d basis. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Monday, Comex silver futures for July delivery fell 18.1 cents (1.3%) at $13.847 an ounce. Last week, silver ended lower by 0.5%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 28.2% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the euro strengthened against the dollar. Earlier, the dollar was slightly higher after China' central bank governor ruled out any "sudden" changes to its foreign-exchange reserves.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 34 (0.23%) at Rs 14,609 per 10 grams.

Prices rose to a high of Rs 14,649 per 10 grams and fell to a low of Rs 14,553 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 253 (1.11%) lower at Rs 22,351/Kg. Prices opened at Rs 22,530/kg and fell to a low of Rs 22,252/Kg during the day's trading.

Govt Mulls Easing Of FDI Norms - June 30, 2009

2009-06-30T15:25:00.000+05:30

The board that approves overseas investments has decided to allow the issue of warrants without board''s approval, which means saving of 40 to 60 days on deals in India. This will help to fast track the mergers and ease red tape. The government is looking to easing the process of selling stake and raising funds through the issue of warrants and partly paid shares. The finance ministry has decided that issue of warrants and partly paid up shares can go through the automatic route without the FIPB approval, which will help the foreign firms to save time in concluding their equity deals.

Besides this, the finance ministry has also plugged a major inconsistency in the policy. The Companies Act permits raising FDI through partly paid shares while the Foreign Exchange Management Act does not allow it. However, with an amendment in FEMA, now the RBI will also address this glitch.

Rupee Remained Unchanged On June In Range-Bound Market - June 30, 2009

2009-06-30T15:20:00.001+05:30

The rupee was remained unchanged on June 29 in a range-bound market. The rupee opened at 48.06 and touched an intra-day high of 47.95. Later it weakened to touch an intra-day low of 48.26, before closing at 48.10, unchanged from the previous close. However, the month-end dollar demand from importers exerted pressure on the domestic currency.

In the overseas markets, the dollar strengthened against the euro and the pound initially but weakened sharply against the euro in the second half of trade.

However, it was flat against the yen and swiss franc. In the forward premia market, the six-month premium closed marginally up at 2.75 per cent (2.7 per cent) while the one-year closed at 2.45 per cent (2.4 per cent).

Dollar Weak Pushes Up Bullion Metals - June 29, 2009

2009-06-29T14:51:00.000+05:30

Precious metal prices rose at USA on Friday, 26 June, 2009. Prices rose on Friday as the dollar index slipped for the second straight day. Dollar dropped on Friday as traders mulled over all time low interest rates in the US. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, gold for August delivery ended at $941, higher by $1.5 (0.2%) an ounce on the New York Mercantile Exchange.

Earlier during the day, it hit a high of $949. For the week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 8.2%.

For the month of June, 2009, gold is still down by 4% on a m-t-d basis. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Friday, Comex silver futures for July delivery rose 12.3 cents (0.9%) at $14.128 an ounce. For the week, silver ended lower by 0.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 29.5% this year. For 2008, silver had lost 24%.

In the currency market on Friday, the dollar was under renewed pressure after China's central bank reiterated a call to lessen the currency's role as the world's reserve currency.

The dollar also slipped on speculation about global central banks' efforts to stabilize the economy that will boost demand for higher-yielding assets.

The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell almost 0.6%. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 28 (0.2%) at Rs 14,651 per 10 grams.

Prices rose to a high of Rs 14,783 per 10 grams and fell to a low of Rs 14,612 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 79 (0.35%) higher at Rs 22,570/Kg. Prices opened at Rs 22,514/kg and rose to a high of Rs 22,793/Kg during the day's trading.

Growth In Treasury In Addition To Give Up - June 29, 2009

2009-06-29T14:46:00.002+05:30

The foreign currency assets grew by $10 million to $252.8 billion. Forex reserves grew by $ 8 million to $ 263.652 billion for the week ended June 19, as per the RBI's latest weekly statistical supplement. The total reserve comprises of foreign currencies, gold and special drawing rights with IMF. The gold and SDR reserves unchanged at $ 9.604 billion and $1 million respectively. The annual growth rate in reserve money was a mere 2% as on 19 June 2009 compared with 29.3% growth recorded last year.

The reserve money fell 1.8% from their previous week level and stood at Rs 950308 crore as on 19 June 2009.Bankers deposit with RBI, one of the major component of reserve money fell 26.9% as on 19 June 2009 compared with 55.4% growth recorded a year ago.

It recorded a negative growth of 24.9% in so far current financial year as against 8.9% decline in same period a year ago.

The annual growth rate of currency in circulation also decelerated to 14.8% as compared to 20.5% growth in a year ago.

In so far current financial year it move up 4.3% as against 6.2% increase in same period a year ago.

Net foreign exchange assets of RBI, one of the major sources of reserve money, recorded 5.7% fall on 19 June 2009 compared with 55.2% surged a year ago.

It decline 1.3% in so far current financial year compared with 8.4% increase in same period a year ago.

The Reserve bank has accepted 6 bids during the week ended 19 June 2009 under liquidity adjustment facilities.

Under the reverse repo auction, RBI has absorbed amount worth Rs 648700 crore at the cut of rate 3.25%. The weighted average rate of call money was below 4% indicating sound liquidity position.

The annual growth rate of money supply as on 20.2% as on 5 June 2009 compared with 21.7% last year.

However headline inflation is in red for two consecutive weeks. Inflation and bond yield have positive relationship.

However yield on most traded paper remain on elevated level due to the higher government borrowing.

PSU Pledge Transaction Expected Toward Gather Together - June 29, 2009

2009-06-29T14:37:00.000+05:30

As per the rough estimates, an amount to the extent of Rs 45,000 to Rs 53,000 crore could be raised through stake sale in select central PSUs over the next year, if the proposals go through. The cumulative proceeds raised till date from the divestment programme from 1991 are only Rs 53,400 crore.

Last year, the UPA Government has sought to revive plans for the divestment of stake in government-owned companies was put on hold.

BSNL, which is lined up for divestment and at Rs 300-400 a share, the company''s total worth was pegged in the range of Rs 1,50,000 crore and Rs 2,00,000 crore ($31-42 billion), in a valuation exercise cited by the Telecom Minister last year.

This is much below the original expectations of $100 billion that was quoted earlier but it is realistic given the prevailing market valuations for its nearest rival, Bharti Airtel, which has a current market capitalisation of around Rs 1,54,000 crore.

However, BSNL, with 84 million mobile subscribers'' base and landline users, reported profit of Rs 3,009 crore on revenues of Rs 38,052 crore for 2007-08.

On the other hand, Coal India could raise Rs 8,500-10,000 crore for a stake sale of 10-per cent, if it manages to command a price earnings multiple of 9-11 on current earnings, which is normal for the mining companies.

Similarly, NHPC, RITES, Oil India and United Bank may bring in the range of Rs 6,100 crore-Rs 6,850 crore.

Further stake sales as well as fresh offers by PSUs like BHEL as well as Power Grid Corporation and Rural Electrification Corporation are also likely to bring in Rs 16,000 crore, based on their current market prices.

Foreign Institutional Investors Permitted To Invest In Govt Debt - June 27, 2009

2009-06-27T13:37:00.000+05:30

SEBI has given its nod for 14 foreign institutional investors (FIIs) including Barclays Bank as well as BNP Paribas and Citicorp Investment Bank, to make an investment of Rs 10,000 crore in government debt. These FIIs will have to invest this amount within 45 days, otherwise other FIIs would be allowed to invest the amount, SEBI said in a release.

However, out of the 14, as many as eight FIIs including Bank of America Singapore as well as Barclays Bank PLc and its sub-account, Blackrock Investment Management (UK), BNP Paribas and Citicorp Investment Bank (Singapore) have been asked to invest Rs 950 crore each in the government securities.

Moreover, four sub-accounts of Kotak Mahindra (UK) Ltd have been permitted to inject Rs 250 crore each in the government securities (G-sec).

Standard Chartered Bank (Mauritius) Ltd has been allowed to make an investment of Rs 750 crore in government bonds while Rs 650 crore for JP Morgan Chase.

Fed Says Downturn Easing Inflation Not A Risk - June 27, 2009

2009-06-27T13:34:00.001+05:30

The Federal Reserve on June 24 said that there is easing of recession but that the economy likely will remain weak and keep a lid on inflation. The Fed Chairman Ben Bernanke and his colleagues said that despite easing of the recession, the economy remains frail enough to keep inflation at bay.

The Fed held a key bank lending rate at a record low of between zero and 0.25 percent, and pledged again to keep it there for "an extended period". The Fed said that the inflation will remain "subdued for some time."

The Federal Reserve defuses the Wall Street''s concerns that the aggressive actions by Fed to revive the economy will spur inflation at later stage.

Moreover, Fed also decided to stay the course on existing programs intended to drive down the rates on mortgages and other consumer debt.

Instead, the central bank again kept the option open to making changes if economic conditions warrant.

The Fed in March launched a $1.2 trillion effort to lower the interest rates to revive the lending. Meanwhile, it said it would spend up to $300 billion to buy long-term government bonds over six months and boost its purchases of mortgage securities.

So far, the Fed has bought Treasury bonds of about $177.5 billion. However, the Fed is on track to purchase securities up to $1.25 trillion issued by Fannie Mae and Freddie Mac by the end of this year or early next year.

Govt Can Increase Remove Repair Tax Rates In Budget - June 27, 2009

2009-06-27T13:32:00.000+05:30

According to the expectations of the Deloitte, the Indian government will increase excise duty and service tax in the upcoming Budget to harmonise them with the proposed Goods and Services tax, which is scheduled to be introduced from next fiscal. Deloitte is an international accounting and consulting firm.

The Government has slashed excise duty rates by six per cent and service tax by two per cent in three stimulus packages, which Deloitte expects to be partially rolled back.

"The Government may cut back indirect taxes reductions made as part of fiscal stimulus packages in December-February, as the Finance Minister is expected to discuss the roll out of GST and lay down a framework plan for the introduction of the tax in the country," Deloitte Touche Tohmatsu India Senior Director (Indirect Tax) M S Mani said.

He said the government is expected to give some directional clarity on the GST and service tax and excise duty rates could be increased to help transition to the proposed GST regime.

Precious Metals Add Further Shiny Surface - June 26, 2009

2009-06-26T15:26:00.000+05:30

Precious metal prices rose at USA on Thursday, 25 June, 2009. Prices rose today as the dollar shed much of its earlier gains. Dollar gave up gains today after the initial jobless claims data in US checked in worse than expected. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $939.5, higher by $5.1 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 8%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Thursday, Comex silver futures for July delivery rose 9.5 cents (0.7%) at $14.005 an ounce. Last week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 28.6% this year. For 2008, silver had lost 24%.

The Labor Department reported on Thursday, 25 June, 2009 that first-time filings for state unemployment benefits rose unexpectedly in the week ended 20 June, 2009.

For the week ended 20 June, initial claims rose 15,000 to 627,000. This is the highest level since the week ended 16 May, 2009. The latest four-week moving average for initial claims fell 500 to stand at 617,250.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 66 (0.45%) at Rs 14,679 per 10 grams.

Prices rose to a high of Rs 14,705 per 10 grams and fell to a low of Rs 14,617 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 121 (0.54%) higher at Rs 22,491/Kg. Prices opened at Rs 22,372/kg and rose to a high of Rs 22,575/Kg during the day's trading.

Fiscal Deficit Target Would Be Present Around HDFC Bank Report - June 26, 2009

2009-06-26T15:20:00.000+05:30

The Budget, which is to be unveiled in the first week of July may surprise with a fiscal deficit figure of around 5.5 per cent, HDFC Bank has said. We believe that the Budget will take a step towards fiscal consolidation and the fiscal deficit target will be in the neighborhood of 5.5 per cent against market expectations of 6-6.5 per cent, the bank said in its report.

The report also said that there are fears in the market of a high fiscal deficit on the back of opinion of continuing of the stimulus packages by the government to boost the growth.

The report said that the government''s net and gross borrowings was unlikely to be very different from the Rs 3,08,647 crore and Rs 3,61,782 crore figure announced earlier in the year.

Moreover, the bank predicted a roll-back (at least partially) of the indirect tax reductions announced in December 2008 and February 2009 as a part of the fiscal stimulus.

It also said that these along with the natural revenue buoyancy associated with economic recovery should keep the interim revenue target supported through FY''10.

CII Calls For Due Reforms For Promoting Industrial Growth - June 26, 2009

2009-06-26T15:18:00.000+05:30

The Confederation of Indian Industry (CII) has called for tax reforms in order to reduce the complications and unproductive time spent by the industry in tax filing. CII has recommended for one rate of corporate tax rather than many cesses and surcharge. Moreover, it has also suggested the abolition of surcharge and cess levied on corporate tax.

"To reduce complications and unproductive time spent by industry in tax filing, it is more efficient to have one rate of corporate tax rather than many cesses and surcharge," CII said in a statement.

Moreover "A component of corporate tax can be set aside for supporting the education needs of the country, without having a separate levy.

In other words, the rates need to be collapsed into the single corporate tax rate," it added.

Besides this, CII also suggested that the rate of depreciation in case of plant and machinery be raised to 25% from 15% and allow full depreciation on assets that have limited life and small costs upto Rs25,000.

Moreover, CII has also recommended bringing ''Goodwill'' under the purview of intangible assets in order to be eligible for depreciation.

It has asked for the restoration of the depreciation rate applicable to hotel buildings to 20% from 10% currently.

Along with this, CII also called for ending the multiple taxation on dividend distribution by a corporate group and its subsidiary.

It recommended that dividends received from overseas entities in the form of convertible foreign exchange in India should be fully exempted.

Precious Metals Get Higher Additional - June 25, 2009

2009-06-25T15:51:00.001+05:30

Precious metal prices rose at USA on Wednesday, 24 June, 2009 ahead of the Federal Reserve's afternoon monetary-policy statement. Traders mulled over the fact that Fed won't be able to move quickly enough to withdraw the trillions of dollars thrown at the financial system, which could lead to higher inflation. That would encourage more purchases of precious metals, an alternate source for investment. Prices rose today despite the strong dollar.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $934.4, higher by $10.1 (1%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 7.5%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Wednesday, Comex silver futures for July delivery rose 7 cents (0.5%) at $13.91 an ounce. Last week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 27.2% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar rallied after the Federal Reserve left interest rates unchanged and said it will continue to buy Treasurys and other securities as previously announced.

The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose as much as 0.8%.

Federal Reserve policy makers began a two-day meeting yesterday. The central bank has held its benchmark interest rate near zero since December. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 128 (0.88%) at Rs 14,613 per 10 grams. Prices rose to a high of Rs 14,823 per 10 grams and fell to a low of Rs 14,463 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 73 (0.32%) higher at Rs 22,631/Kg. Prices opened at Rs 22,304/kg and rose to a high of Rs 22,631/Kg during the day's trading.

Inflation Continue In Negative Zone For Second Week - June 25, 2009

2009-06-25T15:46:00.002+05:30

The official Wholesale Price Index for all commodities for the week ended 13 June 2009 rose by 0.6% to 234.2 from 232.7 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at -1.14% for the week ended 13 June 2009 as compared to -1.61% for the previous week and 11.80% during the corresponding week of the previous year. All the major components of WPI recorded an increase from their previous week level.

The index of primary articles rose by 0.1% to 256.3 from 256.0 for the previous week. Index of food and non-food articles move up from their pervious week levels.

The index for food articles group rose by 0.2% to 251.2 from 250.8 for the previous week due to higher prices of tea and jowar (2% each) and arhar (1%).

However, the prices of bajra (4%) and eggs (2%) declined. While index for non-food articles group also rose marginally to 236.0 from 235.9 for the previous week due to higher prices of raw jute (2%) and raw silk and rape & mustard seed (1% each).

The index for fuel, power, light and lubricant rose by 0.4% to 327.5 from 326.2 for the previous week due to higher prices of aviation turbine fuel (12%), light diesel oil (10%), furnace oil (3%) and naphtha (1%).

The major driver of WPI index, manufactured product rose by 1.0% to 205.8 from 203.8 for the previous week.

The index for textiles, rubber and plastic products, chemicals and chemical products, transport equipment and parts rose from their previous week level.

The index for textiles group rose by 0.7 % to 142.7 from 141.7 for the previous week due to higher prices of other cotton yarn and cotton yarn-'hanks (2% each) and cotton yarn-cones and synthetic yarn (1% each).

The index for chemicals and chemical products group rose by 4.8 % to 228.2 from 217.7 for the previous week due to higher prices of capsules other than vitamin & antibiotics (58%) and liquid chlorine (1%).

However among manufactured product the index for food products, beverages tobacco and tobacco products, non-metallic mineral products, basic metals alloys and metal products, machinery and machine tools declined from their previous week levels.

Looking at the rise in all major indices of WPI, the plunge in WPI, only have a statistical significance.

The higher base has led to a fall in WPI. However in real terms the situation is quite different. The soaring food prices, have put pressure on the daily consumption basket, reflected in the rising CPI.

In addition to this the rise in CPI for May month is the highest in more in 13 years. It is the first time in more than a decade that consumer inflation in May has crossed the 10%-mark for the month.

Point to point rate of inflation based on the CPI-AL and CPI-RL increased from 9.09% in April 2009 to 10.21% during May 2009.

Surge in CPI neutralises the effect of lower WPI for end users and is adding stress on expansionary monetary policy as well.

The rise in CPI put ceiling on further softening of the key interest rate. In addition to this, lower monsoon forecast by India Meteorological Department (IMD) raised the concern for Kharif output.

IMD downgraded rainfall over the country as a whole in the month of July 2009 which is likely to be 93% compared with 96% of its Long period average (LPA) and that in the month of August is likely to be 101% of LPA both with a model error of ± 9 %.

The dismal expectation about the monsoon adversely affects the production of major crops like paddy, jawar, maize, groundnut, sugarcane, cotton, and soyabean.

The worsen output of all these factors led to increase in the price level of agri products, which will push WPI and CPI index on elevated level.

Fiscal Deficit For April Reaches 16 Per Cent Of Govt Estimate - June 25, 2009

2009-06-25T15:35:00.001+05:30

The excise collections for April have been badly hit that resulting the fiscal deficit touching 16 per cent of target in the very first month itself. The fiscal deficit in April grew to Rs 54,100 crore or 16.3% of the projected deficit for the entire year on the back of accelerated public spending as well as a sharp fall in the revenue collection, data released by the Controller General of Accounts on Tuesday shows.

The net collections of excise turned negative at Rs 78 crore in April, according to figures released by the Controller General of Accounts. This means that refunds were more than collections.

However, only the income tax collections stood higher in April, 2009 at Rs 9,849 crore against Rs 7,905 crore a year ago.

While the service tax collections were also marginally down at Rs 2,270 crore as against Rs 2,271 crore.

All of these along with higher expenditure results in fiscal deficit of Rs 54,100 crore in April, which is 16.3 per cent of the targeted Rs 3,32,835 crore for the entire fiscal.

In the interim budget for 2009-10, the fiscal deficit is projected to be 5.5 per cent of GDP. The Fiscal deficit in April 2008 was 24.7 per cent of the projected figure for the entire 2008-09.

However, at a later stage, the deficit figure was revised to much higher six per cent when the stimulus packages were announced.

At last, the fiscal deficit turned out to be 6.2 per cent of GDP last fiscal. In absolute terms, fiscal deficit was over Rs 20,000 crore more than April last year.

Moreover, the Centre''s revenue deficit touched Rs 50,359 crore in April about 21 per cent of what is pegged by the government for the entire fiscal.

Precious Metals Position Exposed - June 24, 2009

2009-06-24T14:56:00.001+05:30

Precious metals registered modest gains at USA on Tuesday, 23 June, 2009. The weak dollar increased the appeal of precious metals as a hedge against inflation thereby pulling their prices up. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, gold for August delivery ended at $924.3, higher by $3.3 (0.3%) an ounce on the New York Mercantile Exchange.

During intra day trading, it earlier rose as high as $927.30 and dropped to a low of $913.20. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 6.5%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Tuesday, Comex silver futures for July delivery rose 14 cents (1%) at $13.85 an ounce. Last week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 26.7% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell as much as 1.3%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 23 (0.15%) at Rs 14,485 per 10 grams. Prices rose to a high of Rs 14,510 per 10 grams and fell to a low of Rs 14,410 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 35 (0.15%) higher at Rs 22,297/Kg. Prices opened at Rs 22,215/kg and fell to a low of Rs 22,074/Kg during the day's trading.

Gold Declines Additional On Weak Global Advices - June 24, 2009

2009-06-24T14:52:00.000+05:30

The gold prices fell further by Rs 45 per 10 grams to Rs 14,485 on the bullion market here on Tuesday. The silver also followed the same trend and dropped due to lack of demand from the industrial users following weak global cues. The gold futures retreated in New York to the lowest level in near six weeks, as falling oil prices and a stronger dollar reduced the appeal of gold as a hedge against inflation.

On the Comex Division of the New York Mercantile Exchange, the gold August delivery slipped by $15.20 to close at $921 an ounce.

The July silver also sank 49.7 cents to $13.703 an ounce. In the domestic market, the standard gold (99.5 purity) fell by Rs 45 per ten grams to Rs 14,485.

The pure gold (99.9 purity) also fell with a similar margin of Rs 45 per 10 grams to Rs 14,550 as against Rs 14,595 previously.

The silver ready (.999 fineness) dipped by Rs 100 per kilo to Rs 22,550 as against Rs 22,650 yesterday.

Rupee Ends 4 Paise Up And About At 48.56 - June 24, 2009

2009-06-24T14:48:00.001+05:30

The rupee bounced back from its early lows and closed dearer by four paise at 48.56/57 against the US dollar on Tuesday. After touching a five-week low of 48.94/95 against the dollar in the early trade, the rupee later traded in line with the equity market, rebounding to 48.50 level during afternoon trade. The rupee resumed weak at 48.85/86 a dollar against its previous close of 48.60/61 a dollar.

According to the provisional figures, the FIIs also were net sellers in equity on June 22. The forex dealers said that the rupee drew support as the dollar turned weak against the major world currencies during the day.

The Reserve Bank of India fixed the reference rate for the US dollar at Rs 48.91 and for the euro at Rs 67.75. The rupee premiums on the forward dollar eased on sustained receiving by exporters.

The benchmark six-month forward dollar premium payable in November closed at 58-60 paise, down from 59-61 paise on Monday and the far-forwards maturing in May also ended lower at 109-111 paise from 110-112 paise previously.

India Inc Overseas Borrowing Increases 65 Per Cent In May - June 23, 2009

2009-06-23T14:43:00.002+05:30

The overseas borrowings by India Inc grew by 65 per cent to $494 million in May compared to the previous month. The total overseas loans raised by 35 companies through external commercial borrowings (ECBs) as well as foreign currency convertible bonds (FCCB) shot up to $494 million in May from $298 million in April, an RBI release here today said.

Out of the total overseas borrowings, $326 million was raised through automatic route while $167 million was raised through approval route.

As per the ECB data for May most of the companies raised overseas funds for capital goods'' import as well as modernisation and overseas acquisition among other things.

Bhushan Steel raised $20 million for rupee expenditure while Bajaj Hindustan raised the similar amount for buyback of foreign currency convertible bonds.

Moreover, Suzlon Energy raised over $61 million under the approval route for buy back of its FCCB while Bharat Petroleum Corp raised $25 million in the month.

Rupee Split Ends By The Side Of One-Month Low - June 23, 2009

2009-06-23T14:41:00.002+05:30

The rupee closed at more than a one month low at 48.60/61 against the dollar due to persistent capital outflows on the back of weak equity markets coupled with a stronger US currency in overseas markets. At the Interbank Foreign Exchange (Forex) market, the rupee resumed lower at Rs 48.13/14 per dollar and dropped further to close at Rs 48.60/61 as against last weekend''s level of Rs 48.08/09, showing a net loss of 52 paise.

The rupee during the day hovered in a range of 48.66 per dollar and 48.13 per dollar. The Reserve Bank of India fixed the reference rate for the US dollar at Rs 48.39 while for the euro at Rs 67.09.

The rupee premiums on the forward dollar closed lower. The benchmark six-month forward dollar premium payable in November closed at 59-61 paise, down from 60-1/2-62-1/2 paise on last Friday and the far-forwards maturing in May also finished lower at 110-112 paise as against 111-1/2-113-1/2 paise previously.

In cross-currency trade, the rupee continued to fall against the pound sterling to close at Rs 79.84/86 as against last weekend''s level of 79.00/02 and it reacted downwards against the euro to Rs 67.27/29 from its previous closing level of Rs 66.98/67.00 per euro.

Moreover, it also fell against the Japanese yen to Rs 50.67/69 per 100 yen from the last week''s level of Rs 49.66/68 per 100 yen.

India Pays Penalty For Not Using Loans From Agencies - June 23, 2009

2009-06-23T14:36:00.001+05:30

According to an internal assessment of the finance ministry, many of its past projects are running far behind schedule to the extent that the government has been paying commitment charges of several hundred crores every year. At the same time India is negotiating more loans from the World Bank to fund infrastructure development and to upgrade urban transport.

India paid Rs 240 crore as commitment charges for the nondisbursed portion of sanctioned loans to World Bank and other multilateral agencies such as Asian Development Bank (ADB) and some bilateral donors in 2007-08 and 2008-09 alone.

In the five years between 2004-05 and 2008-09, the government paid around Rs 700 crore as commitment charges.

An approximation of such expenditure since 1991 puts the figure above Rs 1,400 crore.

According to the finance ministry sources, till last year, there were 231 externally aided projects of which more than 40% were paying commitment charges.

In addition, review of the ADB portfolio showed undisbursed loan amount increased from $850 million in 1999 to $3.5 billion at the end of 2006.

Fiscal Shortage Force Not Exist In Two Times Digits - June 22, 2009

2009-06-22T16:03:00.000+05:30

The Planning Commission said the fiscal deficit will be high but not in "double digits". The Planning Commission stated in order to pacify the fears of banks that high government borrowing would not allow interest rates to come down. "Bankers are always concerned about the size of the government''s borrowing. Because it is very large, many of them think that the interest rate on government debt will rise and they would rather retain liquidity now in order to invest in high-yielding government bonds," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

However, he directed bankers to wait, as it is not known that what the government borrowing would be till the Budget and added that "I feel it will be possible to accommodate a reasonable fiscal deficit".

Monsoon Revives Past Two-Week: India Meteorological Department - June 22, 2009

2009-06-22T15:03:00.000+05:30

The weather department said today, 22 June 2009 the south-west monsoon, which had been stalled since 7 June 2009, revived on 21 June 2009 and is likely to cover more parts of Maharashtra, Karnataka and Andhra Pradesh, The revived monsoon may cover Maharashtra and Madhya Pradesh by the first week of July 2009.

The India Meteorological Department (IMD) said on its website that conditions are favourable for further advance of the monsoon over some parts of the Maharashtra including Mumbai, remaining parts of Karnataka and some more parts of Andhra Pradesh during next few days.

Earlier on 18 June 2009 India Meteorological Department IMD said that monsoon rainfall during the first two weeks of June 2009 was 45% below the normal at 39.5 milimetres.