-- Posted Tuesday, 7 July 2009 | Digg This Article
| | Source: GoldSeek.com
GENERAL MARKET CONDITIONS/FUNDAMENTAL FACTOR
What shall I comment on the markets. Stocks and the US dollar continue to dictate commodity prices. Nervous central banks are advising banks to lend more even if the security is a piece of crap. They may even increase liquidity further if things do not move as per their expectations. If the global liquidity cycle increases (which it should) then part of the same will be invested in commodities and a further flare up in commodity prices. The prices of essential food crops are on the rise. Global wheat production as well as sugar production is on the decline. The cost of living/expenses on food for the average man is on the rise with the passing of each day. The rise on food prices globally is partly due to investment demand (apart from demand supply fundamentals). The end result is a continuous decline in the value of currency linked assets and rise in value of hard assets such as gold. But the rise in the value of hard assets will be at a snails pace.
INDIAN BUDGET – EFFECT ON JEWELERS
The India budget proposed raising import duties on gold bars by INR200/10 grams and on silver bars by INR1,000/kg. Gold imports in 2009 first half estimated at 61.8 tons, down 56% on year; negligible silver imports due to high prices. This will hit demand and jewelers will be forced to sell low purity gold jewelry of 18 carat and 12 carat purity levels.
The removal of excise duty on branded jewelry will hurt very small scale jewelers and tiny shops. But at the same time will promote establishment of local brands and hallmarking. Almost all the branded jewelry is hallmarked. An increase in hallmarked jewelers sales will benefit retail buyers.
TECHNICAL VIEW
COMEX COPPER SEPTEMBER
Copper has been unable to break $233-$240 zone and has been trading in $216-$236 range for the past few weeks. Intra day we prefer to buy on dips as long as $210-$215 zone holds.
DISCLOSURE: NO POSITIONS
THIS IS JUST AND EXCERPT OF THE MAIN REPORT
Disclaimer: Any opinions as to the commentary, market information, and future direction of prices of specific currencies, metals and commodities reflect the views of the individual analyst, In no event shall Insignia Consultants or its employees have any liability for any losses incurred in connection with any decision made, action or inaction taken by any party in reliance upon the information provided in this material; or in any delays, inaccuracies, errors in, or omissions of Information. Nothing in this article is, or should be construed as, investment advice.Prepared By Chintan Karnani. Website www.insigniaconsultants.in
-- Posted Tuesday, 7 July 2009 | Digg This Article | Source: GoldSeek.com
