Bullion Rebounds, Rice In A Groove, Castorseed Firms Up

After easiness, both the precious metals recovered on the Mumbai bullion market last week. Gold recovered lost ground but silver was unable to move up. However, the fall in silver was also limited in view of comparatively restricted decline in prices abroad. Activity in gold was at a very low ebb while supplies, both contraband and official, dropped because of the Ramzan-end airway strike. On the other hand, heavy receipts of gold had been reported in the south from Singapore and the prices of biscuits there dropped, quoting Rs 1,000 lower than in the city.

Overseas gold market had recovered slightly from the low of $ 353.50 per ounce, but according to analysts, there the sentiment would be a bearish one with the prospects of price going down even to the level of $ 340 per ounce, but not in a straight line. On the contrary, though the pressure of supplies in silver had been limited the prices there had not dropped below $ 4.65 cents, though it was expected to drop around $ 4.50 per ounce. After a recent set-back in gold the demand in world market had been still very limited. With the fall in prices in the south, purchases of gold and jewellry from there had stopped and on the contrary supplies had been pouring here. Standard mint gold commenced last week Rs 15 higher at Rs 4,880, but on weakness in overseas markets, gradually dropped to the low of Rs 4,840. But later on poor supplies as well as better overseas advises it recovered to end the week at Rs 4,900 per 10 gms. Gold 22 carat fluctuated between Rs 4530 and Rs 4,475. Official gold biscuits ended Rs 300

higher at Rs 57,200.

Ready Silver .999 fineness opened last week at Rs 6,805, against the previous close of R 6,800, but dropped to the low of Rs 6,705 to end at Rs 6785 per kg. Despite the start of the marriage season, demand had not picked up to expectations. Silver .916 fineness fluctuated between Rs 6,705 and Rs 6605 per kg.

Grains Weekly: The situation in wheat had not improved as supplies from Madhya Pradesh and Punjab had stopped. Small quantities had been coming from Ganga Nagar. However, distribution of wheat by co-operative societies had helped improve the tight supply position, but it would not be able to meet the requirements to a large extent both in urban and rural areas. The situation would improve after the imported supplies came to the market or new crop arrivals in Gujarat and Maharashtra would commence. In Gujarat, new crop would be delayed due to recent cold wave and exceess cold. During the rabi season the lack of rainfall had adversely affected the prospects.

Rice ruled steady at the firm levels, depsite the start of the season. In coarse grains, pressure of demand, due to high wheat prices, had increased and prices were maintained at the current high levels. Wheat Ganganagar was in demand at Rs 875-900 per quintal. FCI Punjab inferior wheat was hardly available at Rs 825-875 and one quality at Rs 1,000-1,200. In coarse grains, jowar was quoted at Rs 425-1,100 on good demand in view of the soaring prices of wheat. Bajra was demanded between Rs 600 and Rs 1,002 and maize between Rs 475 and Rs 625.

Among pulses, moong eased to Rs 1,275-1,475 and moong dal to Rs 1,900-2,100. Gram deshi, fetched Rs 1,150-1,200 and gram dal Rs 1,375-1,500.

Oilseeds: After an initial drop, castorseed futures recovered to end the last week with a steady note on the Mumbai oilseeds market. Bulls were active supporting the contract at the lower levels but turned sellers at bulges, keeping their grip on the contract. In view of the sankranti festival, the inflow had dropped but would pick up soon. On the other hand, export demand for castor oil had been very limited as foreign buyers were quoting lower rates. Exporters, are hopeful of commitments if the prices here receded to proper levels. The seasonal arrivals of castorseed in Gujarat would pick up and hence prices of castroseed and oils would recede to some extent. Meanwhile the Forward markets Commission has asked the exchange to introduce daily clearing in the castorseed contract. This would stabilitise activity and prices in the contract and speculators would not be in a position to take advantage of the fluctuations.