GOLD
HIGHLIGHTS OF THE WEEK:
- Investment demand for gold accelerated in the second half of 2007 after some weakness in first half. Gold holdings of the world's largest gold exchange-traded fund, streetTRACKS have surged from 464.37 tonnes at the end of June to 615.90 tonnes on December 13.
- India's gold jewelry exports rose 13% in the first eight months of the financial year that started in April to $3.87 billion according to the Gem and Jewelry Export Promotion Council. In the financial year ended March, India exported around $5 billion worth of gold jewelry, half of which went to the US.
- Canadian miner Barrick Gold Corp's Bulyanhulu gold mine in Tanzania is back to full production following a strike that paralyzed work there.
- U.S. gold imports fell 26.7% to 7.766 tonnes in October from the previous month, whereas exports fell 4.9% during the month to 28.9 tonnes, according to the Commerce Department. Further, Papua New Guinea gold miner Lihir Gold Ltd cut its 2007 production forecasts by 7% to 700,000 ounces due to unplanned maintenance shutdowns.
- Crude oil prices remained volatile during the week as tightening supplies, volatile dollar, easing geopolitical tensions and uncertain economic outlook kept the energy market shaky. Nymex WTI January crude traded as in the range of $87.09-94.85 a barrel during the week before closing at $89.27 per barrel with a gain of $2.2.
MARKET COMMENTARY:
Gold retreated after initial firmness during the week as weakness in crude oil prices and renewed firmness in dollar hammered the prices. Concerns over economic slowdown eased a bit after recent cut in interest rate by Fed and efforts of central banks to inject liquidity in the financial markets, reducing the safe haven demand for gold. Gold for February delivery at COMEX climbed to the highs of $822.80 on Wednesday before closing the week with a modest loss of $2.2 at $800.20 an ounce. February gold on MCX closed at Rs 10153 per 10 gm on Friday.
FUNDAMENTAL OUTLOOK:
Gold is likely to see volatile movement on shaky currency and energy market; yearend profit booking might contain any recovery in the prices.
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