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Our Bureau

Kochi , Sept. 20

EVEN before the advent of the festive season, firm trends have begun to emerge in the gold futures market in India.

"The primary reason for the surge in gold futures has been the steady trends in the international markets.

The advent of the festive season demand is secondary and is expected to fully manifest in the immediate future," Mr C.J. George, Managing Director of Geojit Financial Services Ltd, said.

Gold futures have climbed to their highest level of the year on a combination of chart-related and supply/demand factors, Mr George said.

The World Gold Council and consultancy GFMS (Gold Fields Mineral Services Ltd) have put out research reports recently, citing strong physical demand for gold.

Jewellery demand has continued to rise despite higher prices. GFMS has reported that jewellery fabrication for gold in India was up 50 per cent during the first half of the year.

"Gold has also acted as a hedge against the soaring international crude and petroleum product prices.

In global markets, investment in gold is also seen as a buffer against inflation," Mr Giby Mathew, Managing Director of JRG Associates, said.

Crude oil futures have gained this week after slipping to a five-week low on NYMEX last week following reports of Paris-based International Energy Agency releasing nearly 2 million barrels oil a day and products from strategic reserves and reiteration of OPEC to increase its oil production to cover any supply shortfalls.

Edible oil prices remained weak on lack of demand from local traders amid inadequate supply from local crushing mills.

The Government statement on reduction of base price of crude soybean oil has also kept the prices soft.

Domestic edible oil prices were expected to fall after the Government announced a cut in base price and making imports cheaper.

Coffee futures fell this week, extending early losses on weak international trends amid low volumes.

It opened higher during the week but failed to consolidate due to lack of follow-through interest and heavy selling from speculators.

Domestic rubber prices were swinging in tune with the international prices and ended the week lower compared with last week.

Chilli lost further ground this week on expectations of bumper crop and availability of huge stocks. Prices are 25-30 per cent down over last year. Meanwhile good prospects of crop output in China might hamper India's exports in 2005-06 by around 20 per cent lower from the previous year. All other spices, such as cardamom, were steady, while jeera, and turmeric remained weak.

Pulses such as chana, tur and urad remained weak during the week on bearish fundamental and technical factors. Pulses were sown over 107.4 lakh hectares as of September 2005, which was an improvement over 106.3 lakh hectares sown in the same period of the previous kharif season.

Guarseed and Guargum continued its free fall during the week on good rains and improving prospects of good harvest.

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