Precious Metals Go Round Unexciting - July 29, 2009

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

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

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

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

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

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

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

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

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.