Gold witnesses downside along with other metals

Karachi, May 16, 2013 (PPI-OT): Some volatility in the market and increase in trading activity Gold witnessed a downside along with other metals. The cross elasticity for commodities with other investment options is evident considering the recent rally in stocks. Dollar gains also provide the pressure for a reduction in bullion demand. The dollar remains strong against the Yen and Euro.

The US and European economies show mixed signs of recovery. The indications are not sufficient to uphold oil prices in view of future demand. Exports and developments in the ringgit have led to decrease in Palm Oil prices. Sugar and coffee markets were stirred by weather forecasts in Brazil and US dollar impact. CE cotton rose on Tuesday as strong financial markets, concern over delayed plantings in the top-producing US state, and limited short-covering supported prices, dealers said.

Pakistan markets await the most critical fiscal budget of all times. With a new government challenged by overwhelming economic issues and political stability, the priority remains to reduce balance of payments deficit and to provide an investor friendly environment.

However, the need for future IMF funds seems inevitable, which may have an exponential impact on the rupee. Thus, investors may view gold and forex as a two way gain, keeping in mind that national market factors are independent of global developments.

Settlement Prices at PMEX were as follows with volumes at Rs. 5.28 billion with 24,382 lots traded:

GOLD: USD 1,372.60 /t oz

SILVER: USD 23.137 /t oz

CRUDE OIL: USD 93.72 / barrel

IRRI-6: Rs. 3,540 /100 kg

Palmolein: Rs. 4,382 / Mound

Sugar: Rs. 45.83/kg

Wheat: Rs. 3,204/100 kg

ICotton: US cents/pound 85.9

For more information, contact:
Sarang Abbasi
Asst. Manager, Risk and Analytics
Pakistan Mercantile Exchange
9th Floor, PRC Towers, 32-A,
Lalazar Drive M.T.Khan Road,
Karachi, Pakistan.
Cell: +92-03215148905
Fax: +92-35611263
UAN: +92-21-111-623-623, 99210650-61

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