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23 February 2015
21 February 2015
GOLD & SILVER OUTLOOK FOR 23 FEB 2015
Gold was little changed on Friday
as investors eyed talks over Greek debt, but the metal was headed for its
fourth straight weekly dip as a last-minute deal was expected to break the
impasse over the Mediterranean country's bailout program me.Gold had initially
seen some safe-haven bids as the uncertainty over the Greek crisis dragged on,
but market concerns eased on hopes that a deal would be patched together. Spot
Gold is at $1207.
MCX Gold Apr is currently trading at `26278. It is trading up by `12
points for the day. Comex Silver is at $16.43. whereas MCX Silver Mar is
currently trading at `36497,it is up by `77.
Gold
Feb 2015
Bullish Trend-26070, s1-25934 s2-25934,R1-26314 , R2-26487
Silver
Silver
Mar 2015
Bullish Trend-36170,s2-35698,R1-36670 ,R2-37030
14 February 2015
IT'S REFORM TIME IN COMMODITY MARKET
Government seems to have learnt from Rs. 5600 cr scam in NSEL (
National Spot Exchange) . After the NSEL scam the turnover in the
commodity exchanges has gone down drastically . For growing economy like
India , we cannot afford the same. In commodity exchange in the need
of the hour is right price discovery for the commodities that are being
traded , however due the reduced turnover market lacks depth and the
objective is not achieved.
Control of FMC shifted to finance ministry
The important step that has been taken is the control of FMC ( Forward Market Commission ) the regulatory body of commodity exchanges has been shifted from consumer affairs ministry to finance ministry , however still lacks administrative free dom. The ultimate aim should be all the exchanges be it commodity , equity , currency should be brought under the control of SEBI with requisite authority for effective control , monitoring and prevention of scams .
Enhancing liquidity
FMC is considering to introduce “ market makers “ to increase turnover. The price is the resultant of trading which is outcome of supply and demand forces./ For this it is going to introduce “ liquidity enhancement mechanism “ ( LES ) to encourage the brokers to participate activity and this create market makers. Market maker is a broker-dealer firm that accepts the risk of holding a certain number of units ( contracts) of a particular commodity in order to facilitate trading in that commodity Each market maker competes for customer order flow by displaying buy and sell quotations .
Entry of FIIS and commercial banks
The cost of transactions in commodity market is high , in order to address this problem RBI is considering to allow the FIIs ( Foreign Institutional Investors) and commercial banks to trade in commodity markets , this will serve the dual purpose of increasing the turnover in the market and bring the cost of transactions down. With increase turnover the will also serve the objective of right price discovery. At present commercial banks are not allowed to trade in commodity market under Banking Regulation Act . However government is considering amending the act so that banks can participate in this market. This will make the commodity exchange more live and active which had gone into huddle after NSEL scam broke out.
The flip side of FIIs participation
The FIIs have got massive financial power and the same has been demonstrated in the equity market Indian stock market is virtually controlled by FIIs. This may lead to volatility in commodity spot prices and can be serious cause of concern especially for agricultural commodities . Hence RBI and government should strike the balance by equal participation by commercial banks and domestic financial institutions so that volatility can be reduced to large extent and FIIs do not take the control of commodity markets .
Overall it is good that government had decided to reform the commodity markets as well , however it should be done with cautious and long term beneficial approach to benefit our economy
Control of FMC shifted to finance ministry
The important step that has been taken is the control of FMC ( Forward Market Commission ) the regulatory body of commodity exchanges has been shifted from consumer affairs ministry to finance ministry , however still lacks administrative free dom. The ultimate aim should be all the exchanges be it commodity , equity , currency should be brought under the control of SEBI with requisite authority for effective control , monitoring and prevention of scams .
Enhancing liquidity
FMC is considering to introduce “ market makers “ to increase turnover. The price is the resultant of trading which is outcome of supply and demand forces./ For this it is going to introduce “ liquidity enhancement mechanism “ ( LES ) to encourage the brokers to participate activity and this create market makers. Market maker is a broker-dealer firm that accepts the risk of holding a certain number of units ( contracts) of a particular commodity in order to facilitate trading in that commodity Each market maker competes for customer order flow by displaying buy and sell quotations .
Entry of FIIS and commercial banks
The cost of transactions in commodity market is high , in order to address this problem RBI is considering to allow the FIIs ( Foreign Institutional Investors) and commercial banks to trade in commodity markets , this will serve the dual purpose of increasing the turnover in the market and bring the cost of transactions down. With increase turnover the will also serve the objective of right price discovery. At present commercial banks are not allowed to trade in commodity market under Banking Regulation Act . However government is considering amending the act so that banks can participate in this market. This will make the commodity exchange more live and active which had gone into huddle after NSEL scam broke out.
The flip side of FIIs participation
The FIIs have got massive financial power and the same has been demonstrated in the equity market Indian stock market is virtually controlled by FIIs. This may lead to volatility in commodity spot prices and can be serious cause of concern especially for agricultural commodities . Hence RBI and government should strike the balance by equal participation by commercial banks and domestic financial institutions so that volatility can be reduced to large extent and FIIs do not take the control of commodity markets .
Overall it is good that government had decided to reform the commodity markets as well , however it should be done with cautious and long term beneficial approach to benefit our economy
7 February 2015
An Overview Of Commodities Trading
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Commodities markets, both historically and in modern times, have had tremendous economic impact on nations and people. The impact of commodity markets throughout history is still not fully known, but it has been suggested that rice futures may have been traded in China as long ago as 6,000 years. Shortages on critical commodities have sparked wars throughout history (such as in World War II, when Japan ventured into foreign lands to secure oil and rubber), while oversupply can have a devastating impact on a region by devaluing the prices of core commodities.
Energy commodities such as crude are closely watched by countries, corporations and consumers alike. The average Western consumer can become significantly impacted by high crude prices. Alternatively, oil-producing countries in the Middle East (that are largely dependent on petrodollars as their source of income) can become adversely affected by low crude prices. Unusual disruptions caused by weather or natural disasters can not only be an impetus for price volatility, but can also cause regional food shortages. Read on to find out about the role that various commodities play in the global economy and how investors can turn economic events into opportunities.
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Commodities markets, both historically and in modern times, have had tremendous economic impact on nations and people. The impact of commodity markets throughout history is still not fully known, but it has been suggested that rice futures may have been traded in China as long ago as 6,000 years. Shortages on critical commodities have sparked wars throughout history (such as in World War II, when Japan ventured into foreign lands to secure oil and rubber), while oversupply can have a devastating impact on a region by devaluing the prices of core commodities.
Energy commodities such as crude are closely watched by countries, corporations and consumers alike. The average Western consumer can become significantly impacted by high crude prices. Alternatively, oil-producing countries in the Middle East (that are largely dependent on petrodollars as their source of income) can become adversely affected by low crude prices. Unusual disruptions caused by weather or natural disasters can not only be an impetus for price volatility, but can also cause regional food shortages. Read on to find out about the role that various commodities play in the global economy and how investors can turn economic events into opportunities.
The four categories
of trading commodities include:
- Energy (including crude oil, heating oil, natural gas and gasoline)
- Metals (including gold, silver, platinum and copper)
- Livestock and Meat (including lean hogs, pork bellies, live cattle and feeder cattle)
- Agricultural (including corn, soybeans, wheat, rice, cocoa, coffee, cotton and sugar)
·
Ancient
civilizations traded a wide array of commodities, including livestock,
seashells, spices and gold. Although the quality of product, date of delivery
and transportation methods were often unreliable, commodity trading was an
essential business. The might of empires can be viewed as somewhat
proportionate to their ability to create and manage complex trading systems and
facilitate commodity trades, as these served as the wheels of commerce,
economic development and taxation for the kingdom's treasuries. Reputation and
reliability were critical underpinnings to secure the trust of ancient
investors, traders and suppliers.
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