>10 grams of GOLD price history for the last 86 years

RISH TRADER

>Impact of higher Brent prices- Why Brent crude prices soaring??

INCREASING BRENT………HAMPERING GROWTH

The ICE Brent Crude futures contract is a deliverable contract based on Exchange of Futures for Physical (EFP) delivery with an option to cash settle. Introduced in 1988, the ICE Brent Crude futures contract is the leading benchmark for light sweet crude oil, including grades in Africa, the Middle East and Asia. Brent crude is actually a combination of crude oil from fifteen different oil fields located in the North Sea. It contains about 0.37 percent of sulfur making it slightly less "sweet" than WTI. It is primarily used in the Northwestern European market and its price is leading global price benchmark in Asia and Europe and two thirds of the worlds internationally traded crude oil supplies. The Brent crude had touched $128.40 on March 1, 2012, its highest level since July 2008.


Why Brent crude prices soaring??
■ Escalating tensionwith Iran,which have resulted in sanctions by the US and a deferred oil embargo until July 1 imposed by the European Union and shutdown of three Petroplus refineries in Belgium, France and Switzerland, leading to a loss in European capacity of around 300,000 bpd has resulted in higher Brent premium.


■ Iran has threatened to block shipments through the Strait of Hormuz in the Persian Gulf, transit route for about 20 percent of the world's globally traded oil.


■ Iran's decision to stop selling oil to Britain and France sent Brent crude prices soaring. Europe uses about 500,000 barrels a day of Iranian oil.


■ Recently the news of approval of bailout package to Greece supported Brent prices.


■ Due to increasing tension between the West and Iran the major Asian oil consumers are looking anxiously at their meagre strategic oil stocks. The world's second-largest oil importer China has a lot less emergency oil is increasing its strategic oil stockpile capacity.


■ The production of Brent crude in North Sea is declining. North Sea oil and gas output passed its peak at the start of the last decade as the larger and easier-to-tap deposits were pumped out.


Impact of higher Brent prices
•Recently high Brent prices are fast threatening the biggest danger to growth in Asia as taking a knife to exports and reigniting inflation.


•Increasing Brent prices is also a headache for central banks as it makes it harder to use easy monetary policy to cushion growth.


•And any threat to Asia is a danger to all, as world market considers that the region's growth can offset the recession in Europe and a fitful recovery in the United States.


•Asia is the largest consumer of the commodity with an account ofmore than 31% of world demand.Asia is a home to four of the world's 10 largest oil-consuming countries in China, Japan, India and South Korea. So increasing Brent prices can hamper the growth of region
and demand for commodity as well as.


•Any increase in Brent would add up more burdens on region's; higher import bill indeed. Excluding Japan, Asia spent a net USD 447 billion on imports of oil and petroleum last year, up from USD 329 billion in 2010.


•China has cut its growth target to 7.5 per cent in 2012, a third straight reduction as the world's number two economy is buffeted by ongoing troubles in the West and high oil prices. India's growth is also tottering.


•Higher oil prices are also threatening the inflation and thus process of monetary easing in developing countries. If prices stabilize at current level, the inflation would be relatively modest and should not trouble monetary policy too much. But if prices spike to USD 150 a barrel then inflation could become much more of a restraint to monetary easing in China, India, South Korea and Taiwan.


RISH TRADER

>OUTLOOK ON FERROUS AND NON-FERROUS METALS

Base metals may remain on volatile path as movement of Greenback,q concerns about euro zone, easing Chinese growth and inflation figures will give keep the sentiment cautious. China's annual inflation is seen decelerating to a 1-1/2-year low of 3.4 percent in February, and coupled with expectations that factory output for January-February would be at the lowest since August 2009, should give Beijing more scope to loosen monetary policy to spur growth. Copper prices may trade in range of 410-430 in MCX while nickel may trade in range of 900-980. The world's No. 3 copper mine, Chile's Collahuasi expects output this year to beat the 453,000 tonnes produced in 2011. China's copper demand will growby at least 6 percent in 2012 given the power sector's unflagging appetite for the metal.Aluminum prices can trade in range of 108-113 in near term while lead can trade in range of 103-110. Chinese Premier Wen Jiabao cut his nation's growth target to 7.5 percent for 2012 to give the economy more room to slowdown if neededwhile the government carries out promised economic and welfare reforms ahead of a looming leadership transition. Production at the Zambian flagship copper mine of Canada's First Quantum Minerals has ground to a halt because of a strike over wages. Increasing cost of raw material is expected to support the steel long prices as it can test 35500 per tonnes in NCDEX soon.


RISH TRADER

>OUTLOOK ON ENERGY COMPLEX

Iran tensions coupled with hope of amicable resolution of Greece crises have given support to the crude oil prices. Oil has climbed this year amid concern that sanctions against Iran will lead to military conflict in the Middle East, where more than half of the world's crude reserves are located. Oil may get support from a reduction in OPEC supplies. The Organization of Petroleum Exporting Countries will reduce crude exports by 0.6 percent this month as seasonal refinery maintenance in Asia erodes demand, according to tanker-tracker Oil Movements. Also crude oil prices are susceptible to profit booking at higher levels as negotiations between nuclear powers and Iran can reduce tension. Iran's Supreme Leader Ayatollah Ali Khamenei welcomed the comments by President Barack Obama that there is room for diplomacy in the international community's standoff. Crude oil can trade in range of 5100-5500 in MCX. Natural gas prices continue to register fresh lows in MCX and are expected to trade in range of 110-125 in near term. Forecasts for mild March weather that was expected to limit demand and concerns over record high U.S. inventory levels continue to keep the natural gas prices on back foot. The weather forecaster added that it sees no change to a "super-warm" outlook for the next 11-to-15-days, with the entire continental U.S. except for the west coast expecting much higher than- normal temperatures.


RISH TRADER

>OUTLOOK ON BULLIONS

Optimism regarding bond swap deal of Greece capped the downside in bullion counter but the events taking place in Greece and the movement of dollar index will continue to guide the movement in near term. A group of 30 banks and funds representing 40.8% of Greece's 206 billion Euros of outstanding debt said that they would take part in the deal, joining other Greek and foreign banks and pension funds which have already pledged to accept the offer. Gold can trade in range of 27500-28400 in MCX while COMEX gold can trade in range of $1610-1750 in near term. White metal silver can trade in range of 57000-61500. Next week US retail sales, US and EU industrial production data will be keenly watched, which gauge the risk sentiment in the market. Meanwhile stronger local currency Rupee will continue to support prices. The gold silver ratio continue to hover around the 50 level as it recently dipped below 48. The Greek government's deadline for the biggest sovereign restructuring in history passed with a majority of investors signaling their readiness to participate in the debt swap. While Greece would prefer a voluntary deal, the government has said it will use so called collective action clauses to force holders of Greek law bonds into the swap, if the private sector involvement falls short and it gets approval from investors to change the bonds' terms.


RISH TRADER

>OUTLOOK ON OILSEEDS

Domestic oilseeds may trade higher taking advantage of the gap between the global oilseeds production and consumption which is expected to remain tight in days to come.Moreover, tracking the domestic scenario, persistent wedding have led demand for edible oils which in turn has improved the oilseeds buying. Soybean futures may continue to post gains as the solvent extractors are seen keen on buying the seeds even at higher quotes to meet the improved oil demand during the period.Adding to the bullishness, the oil meal prices are seen to remain strong due to the good domestic demand from poultry feed industry. Mustard futures may show some decent upside moves due to surge in edible oil demand owing to auspicious Hindu wedding dates. Moreover, the Solvent Extractors Association of India, in its latest report, has estimated India's RM seed 2011/12 crop at 62.65 lakh tonnes as compared to 68.5 previous season, a fall of about 8.5 per cent due to lower sown area this season. On the international platform, U.S soybean futures are expected to maintain their upside moves boosted by the export demand, including China, and expectations for a smaller South American crop due to drought. Investors would be eyeing the World Agricultural Supply and Demand Estimates to be
released by USDA. CPO futures (Mar) may touch 585 levels supported by heightened Malaysian prices on the basis that slowing production growth in Indonesia and Malaysia is likely to tighten global supplies.


RISH TRADER

>OUTLOOK ON SPICES

Pepper futures may consolidate near their all time high price levels as exchange has imposed additional margin of 10% on both sides. The April futures contract may remain above 40,000 levels supported by the bullish fundamentals.The growers are holding back the stocks & squeezing supplies at a time when the output is expected to be lower. There are estimates that the domestic production may be around 43,000-45,000 tonnes, compared with 49,000 tonnes last year. Cardamom futures (Apr) is expected to maintain its consolidation with upside being capped owing to the special margin of 10% being levied on buy side & sluggish exporters demand at higher levels. Any large downside may remain arrested as harvesting for the current season crop is nearing its end. Moreover, arrival of the next crop will be in July, four months to go. Jeera futures (Apr) may trade in range bound carrying a weak bias. The counter may touch 13260 level in days to come as new crop arrivals of 15,000-20,000 bags of 60 kg have started which is reported to be good due to favourable weather conditions. Turmeric futures (Apr) is expected to show some bounce back owing to some lower level buying & exporters demand from Europe, US, West Asia and Japan. Chilli futures (Apr) may remain below 6300 levels on account of peak arrivals, which have started in M.P.


RISH TRADER

>Crude Oil: Geopolitical tensions around Iran driving prices higher •

Oil prices have risen amidst increasing geopolitical tensions around Iran
Oil markets have increasingly focused on the escalating geopolitical tensions over the Middle East in general and Iran in particular. Iran is the second largest oil producer in OPEC, with an output of around 3.5 million barrels per day (mbpd), accounting for almost 4% of global oil production. In response to rising geopolitical concerns, the front-month Brent oil price has risen by around 12% in the month of February and hit a 9-month high of USD 125.55/bbl, while long speculative positions on oil have also increased. We had earlier highlighted the upside risks posed by geopolitical tensions to oil prices in our December report1.



The US, the European Union (EU) and Israel have been engaged in efforts to diplomatically isolate Iran over its alleged nuclear weapons program. The US recently imposed additional unilateral sanctions on Iran and froze Iranian Central Bank’s assets in the US. Earlier, US had classified the Central Bank of Iran (CBI) as a centre for money laundering, and also passed a law that would punish any foreign financial institution that did  business with the CBI. [For further details on Iran related sanctions, please refer to Appendix] Efforts have been stepped up to discourage countries from importing oil from Iran. Meanwhile, risks of a military conflict remain high-ranking US and Israeli officials repeatedly stressing that “all options remain on table”, an apparent allusion to military strike, in order to deal with Iran’s alleged nuclear weapons program. We attempt to briefly evaluate the risks to oil supply and energy security emanating from the current crisis over Iran.


Diplomatic efforts have increased to embargo Iranian oil out of world market
The EU on January 23rd agreed to halt oil imports from Iran from July onwards. Such an oil embargo will force EU to seek other sources of oil supply, and is likely to push up oil prices. The EU decision comes amidst increasing diplomatic pressure on Iran’s major trading partners – China, India, Japan and South Korea – to halt oil imports from the country and aid in its diplomatic isolation.


To read the full report: CRUDE OIL

>India Goes Easy On Gold Buying In Oct-Dec As Rupee Slides

Depreciating rupee and high gold prices have jointly forced to India to cede its long-held position as the world’s No. 1 con-sumer of the precious metal to China in October-December.


India and China together account for more than half of total global demand for gold, with demand from India typically surpassing that of China’s. But the fourth quarter of 2011 registered a change in the trend.


According to World Gold Council data, total demand for gold in India was 173 tonnes in October-December, down 42% from a year ago. Demand in China, on the other, increased marginally from a year ago to 190.6 tonnes.


While both countries registered high inflation, particularly in the first half of 2011, weakening of the rupee against the US dollar dampened demand for gold in India.


In October-December, while gold prices rose 23.5% in dollar terms from a year ago, in rupee terms, gold prices shot up a whop-ping 39%.


Rupee depreciated 8.4% versus the dollar during the quarter, while the Chinese yuan that appreciated 0.2% in the same period.


On December 16, rupee weakened to its all-time low of `54.30 versus the dollar.
Impact of rupee depreciation is also reflected in the fact that while international gold prices (in dollar terms) fell 0.8% in October-December on a sequential basis, Indian prices were up 8.8% dur-ing the same period.


In the quarter that went by India’s jewellery demand nosedived 44% from a year ago to 103 tonnes and investment demand plunged 38% to 70 tonnes.


It was mainly depreciation of rupee in the second half of the year that resulted in India’s gold demand during July-December weak-ening 33% from the first half.


To read full report: GOLD
RISH TRADER

>COMEX GOLD TECHNICAL VIEW YEAR 2012

1. Huge Liquidation pressure from higher level witnessed.


2. High Volatility at the Top Price.


3. Breach of rising trend line.


4. Large magnitude bar with wide range and high volatility at the Top Price.


5. Breach of long RSI support at 62. Current RSI is 57.67.


6. Formation of negative in side bar on quarterly basis.


7. Gold price placed well below the Daily and Weekly Moving averages.


8. Gold price below 200 DMA on Daily time frame.


To read the full report: COMEX GOLD
RISH TRADER

>Gold price may rise after the fall in 2012 – China’s Precious Metals Industry Report in 2012 (PHILLIP CAPITAL)

Precious Metals prices have spiraled up in 2011


Looking back to 2011, international gold price has kept spiraling up with three stages. First, gold price increased 5.5% in 1H11 from US$1421.55/Oz at the end of 2010 to about US$1500/Oz in late June, which is mainly attributable to the USD depreciated for the QE2 and worsening European sovereign debt crisis. Second, as we expected in 2H11 report, gold price had speeded up since July and recorded a new high of US$1920.38/Oz, because the rating for the U.S. was downgraded and European sovereign debt crisis spread to core economies. Last, gold price has plumped since September and the trend has gone down to the end of this year, when the price has fallen down US$1600. In sum, gold price has advanced around 8% in the whole year.


In our view, recent decline has been mainly caused by the tightening liquidity for the Sovereign debt crisis. According to LBMA, the gold lease rate stands at the low level compared to that in past ten years. While the US dollar is in shortage, banks may borrow the dollar but lend their gold, then the gold lease volume ramped temporarily, so the gold supply becomes bigger, which let the lease rate hit maintain low. Therefore, the hedging attribute of the gold is ignored temporarily.




Gold price may rise after the fall in 2012


■ Tightening or loosening monetary policies?
Flooded liquidity has been the main reason for the bullish gold since 2000. Within ten years, major economies like the US and China has printed money as much as or more than that printed in previous decades or hundreds of years. When economic growth slows down or even falls into depression because of the European sovereign debt crisis, major economies have begun loosening their monetary policies. For example, Brazil, Australia and the ECB have adjusted downwards the benchmark interest rate, other smaller economies like Indonesia have even cut down the rate more often. Moreover, because of the high inflation, many economies have fallen into negative real interest, so the opportunity cost for gold is very low. Historically, easing monetary policies normally benefited the gold price. 


■ Investment demand keeps growing
The world has suffered consecutive economic and financial crisis in past years and faced more aggravated social turmoil, the investment demand for gold becomes a main cause for its bullish trend. From 2000 to 2010, the proportion of the demand has risen from 5% to nearly 40%. In 3Q11, global total demand for gold reached 1053.9 tons, with the increase of 6%, among which the investment demand even rose 33% to 468.1 tons and accounted for nearly 50%. Apparently, the demand structure of gold has changed materially and the investment demand has become the important or even the major factor.


■ Reserve demand is enlarging
It is well known that international central banks’ transferring from net seller to net buyer is also the main reason of higher gold price in past two years. Nowadays international monetary system is virtually the dollar standard system, meanwhile the euro, the pound sterling, Japanese Yen and others also help building up the structure. The foundation of the system lies in the firm and long-term trust on main international currencies by countries with non-international currency. Once significant change turns out in major countries, other economies maybe adjust their financial assets. Especially when the basis for the whole system is vacillated like the breakdown of the Bretton Woods System and the dollar crisis, the hedging tools including the gold may become the main choice of assets adjustment.


To read the full report: GOLD
RISH TRADER

>GOLD: Macro and financial factors driving gold returns over the past three years should remain in place for 2012.

Goose with the Golden Eggs

 Gold holds a unique historical status as a non-consumable commodity universally

recognized as a medium-of-exchange. Given the large amount of non-perishable

inventory overhang, traditional demand-and-supply dynamics do not apply in the short

term. In times of macroeconomic stress, financial factors may drive gold prices well

above physical costs of replacement for extended periods of time, thus exhibiting

“bubble-like” characteristics.

 There is a high probability that macroeconomic and financial factors which have

propelled gold prices over the last three years will continue for the next 12 to 18

months. We look at three major macro-financial drivers of nominal and real gold price

returns: denomination effects from inflation and currency adjustments, followed by real

interest rates, and finally financial demand for gold as a safe haven.

 Denomination — Nominal gold prices quoted against the US dollar must reflect

changes in the value of the denominator. Common measures of changes in the

purchasing power of the US dollar include consumer price inflation and currency

exchange rates against a weighted basket. This has accounted for some but not all of

the appreciation in nominal gold prices.

 Real Interest Rates — Once adjusting for denomination effects, real interest rates

serve as a useful proxy of the value of holding purely financial as opposed to physical

assets, thus capturing the opportunity cost of investing in gold. Given the weak

economic outlook, we expect central banks to keep nominal and real interest rates low,

providing the impetus to drive gold prices higher.

 Financial Demand — Lastly, gold has seen an unprecedented amount of financial

demand from both retail investors and central banks seeking a safe-haven against

other asset classes. Given the high level of market uncertainty and continued turmoil

from the euro-zone crisis, this financial demand should continue into 2012.

 Gold Price Outlook — We forecast nominal gold prices, which averaged $1220/t oz in

2010, to average $1575 in 2011 and $1950 in 2012.

To read the full report: GOLD

>QUARTER 3 2010 REPORT ON ENERGY (Crude oil & Natural Gas

Summary: The Q3 2010 signifies the beginning of the US summer and also the official beginning of the North Atlantic Hurricane season. The Atlantic hurricane season this year is expected to one of the most active seasons on record. As the US government plans to impose a ban on deep water drilling post the crisis involving BP plc in the Gulf of Mexico the IEA predicts that supplies in US may fall by 300,000 barrels a day if the ban extends to 2 years. While Q3 happens to coincide with the seasonal trend for fuels like gasoline and natural gas as a result the outlook for energy products looks bullish in the coming quarter in the hope that the economy will perform much better than it did in the first half of the year.

Crude Oil: Prices traded near an 18-month high at the beginning of the quarter on better-than-expected economic numbers from the US. The US ISM non-manufacturing index and pending home sales data showed a positive growth. However, the debt crisis in Greece kept the crude oil prices in a tight band during first part of Q2. Events like the volcanic eruption in Iceland and a complaint filed by SEC against Goldman Sach continued to inject volatility into the market. In the month of May, ongoing debt crisis in Euro zone resulted into sharp fall in the prices below $65 per barrel. A rise in supply of crude oil at Cushing, Oklahoma resulted into fall in price of near month contract than farther months. In May, Fitch, the rating agency, downgraded Spain’s credit rating. This resulted into fall in crude oil prices by nearly 14%, the steepest fall since December 2008. At the beginning of June month, prices remained under pressure. However, the fall in crude inventories as reported by the DOE at NYMEX delivery point in Cushing, Oklahoma limited the fall and prompted the price to post positive closing.

Natural Gas: At the beginning of Q2, inventories began to build up earlier–than-expected as the Northern hemisphere winter ended earlier. This led to a rising surplus in overall inventories compared to the five year average. While there was little seasonal demand from nuclear and coal fired plants which were going through their maintenance. Positve economic data from US, however, helped to prevent prices from declining further. The first half of the quarter saw prices declining to as low as $3.92 per MMBtu while a recovery in prices was seen in the second half of the quarter. Good start of summer season, which means higher demand for natural gas at power plants to generate electricity for space cooling needs.

To read the full report: ENERGY SECTOR

>GOLD: Forecast 2010

Given the surge in prices in late 2009, it is not surprising that the 2010 forecast prices are all much higher than last year’s forecast prices. With the gold values hitting a new all-time high in December 2009, the 2010 forecast average for gold at $1,199, is well above the 2009 forecast level of $880. There has been an even sharper rise in silver predictions from $11.58 last year to $19.02 in 2010. Average PGM forecasts have also increased dramatically: for platinum from $996 to $1,558 and for palladium from $217.9 to $446.5. The forecasts are well above the year averages recorded for 2009 as shown above: for the four metals together, the average increase for 2010 forecasts relative to the average prices in 2009 is 38%. Compared to the level in early January, 2010 the increase is 5.4%.

Trading ranges are expected to be wide for all four metals in 2010.
All forecasters expect gold to hit record highs this year, with a predicted average high of $1,394. Lower central bank sales are at the forefront of contributors’ predictions.

Compared with January levels, the most bullish view is on silver, with some predictions that the price will reach the $30 level in 2010. The major influencing factor for silver emerging from the contributors’ analysis was portfolio diversification. Improving industrial demand is expected to play a role in the advance of silver prices. In platinum, contributors predict $1,843 as the average high, $300 above the level in early January. The average increase for the year as a whole relatively to early January is only 1.8%, well below the corresponding increases for the other three metals. Platinum ETFs are expected to be a major factor in the price of platinum. In palladium, contributors, on average, see the market reaching a peak of $570.5. Higher investor interest and industrial demand are reasons contributors think palladium will have an exceptional year in 2010: the forecast increase relative to the 2009 average is no less than 69%.

To read the full report: GOLD

India monsoon advances; condition positive for 2-3 days

Mumbai - India's monsoon advanced further Monday--after a brief pause last week because of Cyclone Phet--and is likely to cover more parts of the southern states in the next two to three days as conditions had turned more favorable, a senior weather official said.

The southwest monsoon had reached the Indian coast a day earlier than usual on May 31 and covered the southern state of Kerala and parts of neighboring Tamil Nadu before Cyclone Phet over the Arabian Sea halted the rains' progress.

"The monsoon has advanced today into most parts of coastal Karnataka and some more parts of south interior Karnataka," said the official, who declined to be named.

The western parts of India including Goa, Konkan and central Maharashtra, would also be covered in the next two to three days, the official said.

The state-run India Meteorological Department said pre-monsoon showers have also lashed the northwestern state of Rajasthan and the western state of Gujarat.

Kerala and Karnataka are key producers of coffee and spices while Gujarat and Rajasthan are large producers of cotton and oilseeds.

Sowing of summer-season crops, which includes rice, sugarcane, soybean and cotton, starts with the onset of the June-September monsoon. This is a crucial time when most of the rains fall in India, where about 60% of the farmlands are rain-fed.

The worst drought in nearly four decades withered last year's summer-sown farm output, driving inflation.

The weather official said Cyclone Phet has weakened into a depression over Rajasthan and it will further weaken in the next 48 hours, bringing showers over Rajasthan, Haryana and Uttar Pradesh.

While in its latest update, the weather body said an upper-air cyclonic circulation is likely to form over the Bay of Bengal during the next 48 hours.

"At present, there is no clear indication of any other cyclone, but we are monitoring the situation constantly," said the official.

Last Friday, Ajit Tyagi, director general of the weather body had said the monsoon is likely to cover the entire country by end-July.

Typically, the monsoon covers the entire country by mid-July.

Tyagi had added that India wasn't revising its forecast, which predicted normal monsoon rains this year, despite Cyclone Phet and late last month's Cyclone Laila that lashed India's eastern coast.

To read the full report: COMMODITIESCONTROL

>World sugar production to rise 3.5pc - FAO

Mumbai - World sugar production is expected to recover by 3.5 percent to 156.3 million tons in 2009-10, largely due to relatively favourable growing conditions and high returns, a recent report of Food and Agriculture Organisation 'Global Food Outlook' cited.

In 2007-2008 it was 167.6 million tons, up 151.1 million tons in 2008-2009.

Nevertheless, global output is still to remain short of consumption for the second consecutive year, with the deficit foreseen in the order of 6.3 million tons.

The report apprised that world trade is expected to grow by 12 percent this year, sustained by strong import demand in India, where consumption would outstrip production by 7 million tons. It would be around 53.3 million tons this year which is 5.8 million tons more than the last year. In 2007-08 it was 47.3 million tones.

It also forecasted an increase in utilization of sugar by 1.8 million tons or 1.1 per cent. It is expected to be around 162.6 million tons in the current year. In 2007-08, it stood at 158.7 million tons.

“Also, global reserves are set to decline to about 54.4 million tons, which is 9.8 million tons below the ten-year average. Ending stocks in 2007-08 accounted for 74.8 million tons and in 2008-09 it was 60.9 million tons”, FAO added.

This year, per capita consumption will decrease by 100 gram. In 2008-09, per capita consumption of essential commodity was 23 kg per year while it was 22.9 kg per year in 2007-08.

According to the report, preliminary projections for the year 2010-11 indicate a small production surplus for the first time since 2007-08, providing some downward pressure on prices. In May, prices averaged US 15.10 cents per pound, down 42.93 percent from their highs of US 26.46 cents per pound in January 2010.

Source: COMMODITIESCONTROL

>NATURAL GAS (KOTAK SECURITIES)

A lot at risk; urgent action needed. We believe continued tardy progress in implementation of gas development projects and new power plants may lead to the Indian gas sector performing well below its potential. We note several current and potential hurdles: Excessive government control, marathon legal cases, pricing muddle, delays in E&P and downstream development and toothless regulations. We project a steep increase in potential supply and demand by FY2015E, but both supply and demand factors will need to move in tandem to meet our projections.

■ Natural gas set to gain share in India's energy mix
■ Sharp increase in gas supply but gas development projects may get delayed
■ 'Right' price will create enough demand; power sector to account for bulk of demand
■ Regulatory developments will be crucial for growth of gas market

To see the full report: NATURAL GAS

>Popular Delusions: when to sell gold (SOCIETE GENERALE)

JP Morgan once said he'd made his fortune by selling too soon. We spend much time thinking about what to buy and when to buy it, when in fact knowing when to sell is more important. The case for owning gold is clear enough, but when should we look to sell?

■ Some would say the time to sell is now. Gold just isn't the misunderstood, widely shunned asset it was a few years ago. Isn't the gold bull market now long in the tooth, with better opportunities to be found elsewhere? I can understand this view. Had you bought stocks at the bottom of the bear market in 1974 and held them for ten years you'd have seen them go from being hated to being loved. And as the number of mutual funds exploded you could have plausibly argued that since stocks were no longer the deeply contrarian plays they'd been, they should be sold. But you'd have missed spectacular gains over the next 15 years because the social contrarian indicators said nothing as to how favourable underlying conditions were for risk assets.

■ Though developed market governments are insolvent by any reasonable definition, it's far from inevitable that this insolvency will precipitate an extreme inflationary event … it's just that it might ... And although I've wondered aloud if Ben Bernanke is in fact the reincarnation of Rudolf von Havenstein - the tragic president of the German Reichsbank who presided over the Weimar Hyperinflation (speculative evidence presented below) I don't think he actually is ... it's just that he, and other central bankers, might be closer than they think ...

■ Gold, like all other commodities, is inherently speculative. Unlike well chosen stocks which you buy to hold to take advantage of their wealth-compounding properties, you only ever buy commodities to sell later. With this in mind, when should you sell gold?

To read the full report: GOLD

>ALUMINIUM BOWLED BY OVERSUPPLY

The domestic demand of Aluminium is lower and the same is the situation in international
markets, where prices are consolidating in a narrow range because of higher inventories and
surplus in the markets. Recently released, China general administration of customs report said
that Aluminium imports were down on a monthly basis by as much as 34%, in February.
This can act as a very big drag for the prices as the markets very heavily rely on the prospects
and triggers from one of the world’s biggest consumer of the metal. China was a net exporter of
the metal until 2008, but significant imposition of export duties and taxes lead to a u-turn in the
consumption levels.

The pattern is changing again and China has started exporting some of its stocks reserved earlier. This will be providing sentimental boost to sellers, though the exports are not substantial.

LME prices were at $ 2279 per tonne on 18th March 2010, marking a rise of 9.7% from 1st February 2010. These are also multi-month high levels for Aluminium.

The inventories have during the same period declined by a marginal 0.15% to 4618200 tonnes. We expect that the prices will be consolidating within a range and any fresh buying and
appreciation in prices will bend down by long liquidation and short positions at higher end.

Fall in production capacity to benefit Aluminium in longer run: IAI
The Aluminium prices are set to benefit from the fall in production capacity across the globe,
which has been a resultant of declining stockpiles mainly in London warehouses and dearth of
electricity in Aluminium, producing regions.

The data from International Aluminium Institute (IAI) for the month of January suggests that the total primary Aluminium production stood at 1995000 tonnes, which was a decline of 4.7%. The total production for the month of Jan 2009 was 2094000 tonnes.

In Asia ex China, the production of primary Aluminium was 396000 tonnes in January 2010 as
against 356000 tonnes in January 2009, up 11.23%.

For the full year ending 2009, the total production of primary Aluminium in Asia was 4401000
tonnes.

China cumulative production increases, Fall on M-o-M basis: China cumulative production of Jan-Feb 2010 stood at 161989 tonnes, up 39% from Jan-Feb 2009 where the cumulative production was 116422 tonnes. The latest data from General Administration of Customs of China said that Aluminium imports from February were 64356 tonnes, which was down 34% from imports of 97633 tonnes in January 2010.
The fall of Aluminium on a monthly basis is expected to check any speculative rise in short term.

The dollar moves are strong which is bringing liquidation in Copper. It will be interesting to see
how the imports of metal stand in coming months from China.

Indian Aluminium production increases in January
Indian Aluminium production increased in the month of January 2010, following the trial run
production from Vedanta Aluminium Limited (VAL). Vedanta has commissioned its smelter at
Jharsuguda from April, 2008.

VAL produced 27367 tonnes of Aluminium in January 2010. On a monthly basis, NALCO
registered a fall of 2048 tonnes in Aluminium production in Jan 2010 when compared to its
production targets of 39200 tonnes.

On a cumulative basis, Nalco’s production for the period of April-Jan 2010 was up by 19.71% to
355893 tonnes as against 297296 tonnes in April-Jan 2009. Bharat Aluminium Company
(BALCO) production for Jan 2010 was 21793 tonnes as against 22298 tonnes the production
target. When compared on a Y-o-Y basis, the cumulative production of BALCO was down
27.20% to 355893 tonnes in April-Jan 2010.

To read the full report: ALUMINIUM

>CRUDE OIL PRICE OUTLOOK 2010

REVIEW

An economy is measured by its GDP growth, which contracts or expands based on the potential activities in that economy. Those activities are classified in terms of operating work in the industrial discipline, the consumption by its citizens & the government spending in distinct affairs to stimulate the economy. However, apart from these classifications a macroeconomic view could be used to determine the economic endeavour in the economy; namely the crude oil consumption.

The trough phase which hit almost all economies in the world was portrayed by the slump in consumption of crude oil. The price on the energy complex witnessed a seesaw movement since 2008, due to faltering value in the US Dollar & escalating demand from China, aided the price to hit to a record level of $147 per barrel on July 2008. However, as global economy started to ail triggered slump in the global oil demand, therefore affecting its price, which hit a low of $32.4 per barrel at NYMEX.

The fall in demand was extended in 1st quarter of 2009, which reflected on crude price internationally, as it recorded a low of $36per barrel; a modest change from its previous year level of $32.4 per barrel. In the early of 2009 in March, the OPEC took steps to curb its supply levels to indemnify its losses, when price fell.

The demand of crude oil depends on the demand for heating oil & gasoline. These are the byproducts which has the most consumption. The demand on these products had stubbed, weighing on crude oil price, which traded at $37-$44 per barrel from January – April 2009. The lower prices forced refiners to shut their operations, especially in the 1st half of 2009, as refining cost had almost pared with wholesale prices.

With the revival of the US & Chinese economy in the 3rd & 4th quarter 2009, which posted better manufacturing & domestic growth, aided the crude oil price to rise towards $82 per barrel. Crude oil prices touched a high of $81.78 growing 127.61% from its yearly low & furthermore recorded growth of 77.94% for the year-to-date for 31st December 2009, since 2008.

The halt in refinery operations persuaded the prices to rise as reduction in supply of byproducts ensured rise in prices. The extension of demand dynamics came in from Asian countries such as China, South Korea, Japan & India which led the pack in 2009. However, one of the major reasons for the crude oil price to rise to over $81 per barrel was the slack in the value by the US Dollar. This shed almost 9% for the year 2009, as benchmark rates are dollar-denominated.

RECOVERY IN OIL PRICE IN 2009

The 152nd OPEC meeting hosted in Vienna in March 2009 was the 1st step adopted in order to elate the price in the energy sector, where the outcome of the assessment resulted into curb in the crude oil supply, which aided the price to ascend from its yearly low of $36 per barrel. The curb on the production quotas from the OPEC members were mainly, due to the slump in demand from the US, Europe and Japan which cut their consumption capacity substantially, especially in the US & Europe, as trough hit their industrial & manufacturing growth. The supply by OPEC was reduced at 800,000 bpd, which helped in lifting the price to over $50 per barrel.

During May-June 2009, economic conditions in China bolstered the growth in the price of crude oil, as major industry & service sectors aided in the GDP level to rise due to the reflationary measures adopted by the country. China, the 2nd largest consumer for crude oil in the world, extended its reputation of being a voracious consumer in 2009. It consumed more than 6% in 2009 from its previous year’s level; China consumed 33.35 Million metric tonnes of oil in June 2009, the highest monthly consumption in that year. The consumption was more than 2.6% from its previous corresponding month in 2008.

To read the full report: CRUDE OIL