Gold Takes The Plunge, Castorseeds Up, Grains Weak

A steep fall in gold was the highlight of trading on the Mumbai bullion market last week. Silver too receded, but only to a small extent. It was reported that large parcels of gold were received by sea as well as air at a time when overseas advices were discouraging and prices were on the decline on fresh buying support abroad.

Consequently, gold on easier supply position coupled with the fall in seasonal demand, affected sentiment. It declined below the Rs 4,700 mark, while gold official biscuits lost Rs 1,000 at Rs 54,800 per 10-tolas. Silver also received limited fresh buying support as most of the purchases for marriage season were over.

In the international market, gold crossed the $345 mark and silver was up $4.85 per troy ounce. However, fall in the silver price was limited as lower levels attracted demand from industrial users. On the other hand, gold lacked fresh investment support at higher levels. Still, apprehension of gold sale by the central banks of Europe and World Bank kept fresh buying support at bay.

Standard mint gold commenced last week at Rs 4,770, declined to Rs 4,670 and ended at Rs. 4,680 per 10 grammes. Silver .999 commenced Rs 10 lower at Rs 6,830, rose to Rs. 6,815 and ended at Rs 6850 per kg.

Oilseeds: After an initial quiet trend, castorseed futures firmed up on hectic buying by a bull operator in the Mumbai oilseeds market last week. The sentiment changed for better.

Despite start of trading unofficially in Masjid Bunder, activity was at a low ebb during mid-week. However, with an entry of a bull operator coupled with rising trend in Ahmedabad, the morale of the market was boosted and prices shot up in the week-end.

It was also felt that a prominent local bull operator had now accumulated sizeable long position in the Ahmedabad market, resulting in prices ruling Rs 25 higher. Under the circumstances, spot-houses and shippers rushed to cover short position.

Consequently, exporters were hopeful of sizeable demand for castor oil in the coming days.

In edible oils, groundnut oil was better, but palmolein and sunflower imported oils were easy. Malaysian palmolein advices were weak. Hence, sellers were disposing off the same even at reduced rates. About two lakh tonnes of supplies would be on the cards for June.

Castorseed June attracted no business. In view of the settlement of most of the outstanding positions, fresh business as well as orders had stopped in the maturing month. The September contract opened at Rs 1,141.50. In poor activity till Wednesday, the contract receded to Rs 1,138.

In the absence of fresh offering and higher Ahmedabad advices, the declining trend was arrested by bear covering. Later, a prominent bull started accumulating long position and the contract shot up suddenly to to close at Rs 1,163.

In edible oils, despite the start of supplies of rabi groundnut crop in Gujarat, prices were still not affected. Groundnut oil ended at Rs 362. On good supplies and weaker Malaysian advices, palmolein declined from Rs 276 to Rs 268. Cottonseed and other refined oils were also available at lower rates.

Grains: Financial difficulties coupled with poor fresh demand adversely affected the prices of wheat and pulses on the Mumbai grains market last week. Traders were worried about the poor return of outstandings from upcountry centres, which added to the difficult position.

Imported arrivals in pulses and poor fresh demand worsened the situation and traders were forced to cut prices. Wheat declined as supplies from Punjab, UP and Ganganagar increased. MP wheat arrivals were normal. Activity in rice was moderate.

Wheat reported good arrivals of Punjab inferior moist variety.

Demand was very poor, which affected prices. Punjab inferior moist wheat was offered at Rs 575-625 per quintal. Ganganagar whet ruled at Rs 650-800, MP-147 at Rs 675-825 and Shihori pissi at Rs 900-1,200 per quintal.