Katrina to perk up gold, fuel gasoline

WEEKLY COMMODITIES OUTLOOK

Gold: The yellow metal's sheen is rising following the Katrina disaster. The hurricane forced the companies, including Exxon Mobil Corp and Chevron Corp, to shut operations in the Gulf of Mexico.

Katrina is plowing right through the heart of the oil and gas producing areas in the central Gulf of Mexico and the Louisiana refining system, home to about 15 per cent of the total US capacity. The hurricane's impact is pushing up gasoline prices more than that of crude oil.

"With the aftermath of Katrina still looming large, the US economy may go through a cooling off before seeing a strong growth again. Also, the consumers could cut down their spending due to rise in fuel prices," said V. Sivaramakrishan of Karvy Commodities.

Domestic prices are seen up following international prices and expected rise in demand due to upcoming festival season, starting next week.

Overseas spot prices are likely to touch $450 per ounce from last week's closing high of $447.30 per ounce. MCX October contract is likely to rise to Rs 6,450 per 10 gram from Friday's closing of Rs 6,364.

Crude oil: NYMEX crude oil futures closed on Friday at $67.57 a barrel, lower than the 29-month high of $70.80, a fortnight ago. While market players remain bullish following the Katrina disaster, the correction is likely to continue this week, prior moving to a new high of $72. Market pegs the next target (for the month-end) at $77-78. Crude oil remains a buy-on-dips till October.

Soyoil: With the crude oil prices up, talk of bio-diesel came up and kept prices firm amid weather concerns last week. However, overseas lackluster palmoil markets and limited fundbuying is likely to keep sentiment dull.

In the domestic market, prices are seen down following good weather forecast in soybean and groundnut growing regions in India around the second part of the week and early next week. Soybean growing areas of Madhya Pradesh and groundnut growing Saurashtra region of Gujarat are likely to receive good showers.

Further, domestic supply glut and huge port stock-almost amounting to 4 lakh tonne-is also likely to keep prices weak.

Market is likely to test Rs 368-per-10 kg-level.

Guarseed: Rains in Rajasthan and supply in market is likely to keep the prices lower is over, prices are expected to touch new-highs with government agencies not expected much rains for Rajasthan areas.

Market expects NCDEX September contract to touch a low of Rs 1,850 per 100 kg, before seeing an upward movement.