Gold, silver likely to remain weak on low demand

Hyderabad (NVS): Despite the US GDP rate for the last quarter touching 3.5 per cent against 3.2 per cent in the previous quarter and the dollar scaling new heights day after day, the yellow metal remained firm globally during the week ended Saturday. On the other hand, silver recorded a marginal decline. Therefore, the sentiment in gold and silver is expected to remain moderate for the next few weeks.

At home, despite the rupee remaining at lower levels vis-a-vis the US currency, thereby making the import of gold more expensive, the sentiment in gold was fairly firm while in silver it was moderate. Standard gold (24 carats), after closing at Rs 27,770 (per 10 gms) last week, opened at the same level and gradually declined in small quantities before closing at Rs 27,690 or Rs 80 higher. Ornamental gold too, moved up in tandem and was quoted in the range of Rs 27,040-27,140 on the last day. Silver (0.999) on the other hand, was moderate and finally closed at Rs 39,000 (per kg) or Rs 800 lower than the previous week’s closing mark of Rs 39,800.

The current moderate trend in the precious metals is likely to continue at least until January 14, the Sankranti, after which the marriage season will commence. However, considering the after-effects of demonetisation and the possible crack down on the benami property holders in the near future, the demand for gold and silver jewellery is likely to be low.

The sentiment in the local wholesale commodity markets at different venues of the twin city such as Mir Alam Mandi, General Bazaar, Begum Bazaar, Osmangunj, Kukatpally, Bowenpally and Saroor Nagar was strong. Staple food grains like wheat, rice, jowar, bajra and maize remained steady while jeera, turmeric, ginger, garlic, coriander and til seeds declined marginally. On the other hand, chillies, Tamarind, Rapseeds and common edible oils moved divergently within narrow margins.

In Kishangunj and Mukthyargunj, the sentiment in common pulses was strong. According to sources, the government has devised a strategy to boost up the production of cereals and pulses in the country. It has fixed new targets for the years 2016-2017, 2017-2018 and 2020-2022 at 200 lakh tonne, 210 lakh tonne and 240 lakh tonne respectively, besides creating a buffer stock of 20 lakh tonne.

Despite the country-wide cash crunch following demonetisation, the agriculture sector has registered a growth of more than five per cent against the target of four per cent. After the abolition of import duty, the governmental agencies have been asked to stop the import of wheat since the private sector has placed orders sufficient to meet the country’s requirement of wheat.

The sentiment in common vegetables was from moderate to strong. While onions and tomatoes continued to rule at lower levels, potatoes, beans, ribbed gourd, cauli flower, cabbage, donda, kandha and leafy vegetables recorded appreciation in the range of six per cent to nine per cent.

The NECC wholesale eggs in Hyderabad closed at Rs 355 (per 100) or Rs 37 lower from the last week’s closing mark. On the closing day, Lucknow recorded the highest price of Rs 440, while Hospet recorded the lowest price of Rs 340.

Dr H C Upadhyay