Gold closes near US$458 an ounce

Gold futures closed near US$458 an ounce Friday December 3, 2004 to mark a 16-year high. The yellow metal that came under selling pressure previous day witnessed hectic activity fueled by the decline in dollar to a record low against the euro. Latest economic report failed to boost dollar. The US Labor Department, on Friday, estimated that nonfarm payrolls increased a less-than-expected 112,000 in November, while the unemployment rate dipped to 5.4%. The news drove the euro to a record high against the dollar. Against this backdrop, gold for February delivery closed at US$457.80 an ounce on the New York Mercantile Exchange, up US$5.50, after an earlier fall to a low of US$450. Prices have not closed this high since June 1988. March silver futures closed at US$8.043 an ounce, after falling 1.5% in the previous session.

Meanwhile, in the domestic bullion markets Gold continued to retrace from higher level due to lack of buying support. Gold standard ended the day lower by Rs80 to Rs6,555 per 10 gm. This is the third day in succession that gold prices have slid in domestic markets. Silver prices have also softened marginally.

Crude declining thick and fast

Crude oil futures have lost more than 15% in the last four trading sessions on aberration of speculative activity coupled with US inventory pile up and subsiding supply worries. Speculators have been reducing their exposure in crude future and instead moving to other lucrative areas like metals especially gold. On New York Mercantile Exchange (Nymex) WTI January delivery settled at US$43.25 per barrel, a decline of US$2.24. Crude is quoting lowest since September 10, 2004. Heating oil futures plunged 7.21 cents to US$1.2572 per gallon, more than 33 cents and natural gas futures fell 60.2 cents to US$6.811 per 1,000 cubic feet. Gasoline futures slid 5.98 cents to US$1.1414 per gallon.

The IPE Brent crude futures for January delivery settled at US$39.90 a barrel, down 25 cents. The fall of almost US$7 since Tuesday marks a slide of more than 24% since the peak of US$51.94 in late October.

Subsidies on LPG, kerosene to be phased out by 2007

In third Indian Petro conference held at Delhi, Petroleum Secretary S C Tripathi asserted that the Government would phase out subsidies on LPG and kerosene by March 2007. It is stated policy of the government to remove subsidy by 2007, reiterated Mr Tripathi. Subsidies on LPG and kerosene, estimated at Rs35bn for 2004-05, were to be eliminated from the next fiscal, but the UPA government has decided to extend it by two years. The Rs22.58 per cylinder subsidy on LPG budgeted in the 2004-05 Budget is likely to be enhanced to about Rs40 and that on kerosene to Rs1.10 per litre from Rs0.81 per litre. Tripathi said a Bill for setting up of an independent regulator for the oil sector will not be presented during the current winter session of Parliament as it has been referred to a Group of Ministers (GoM) for further consultations.

Nalco exceeds target in November

The sate-run aluminium major, National Aluminium Company Limited (Nalco), has exceeded its target for November 2004. The company produced 30,005 tons of aluminium cast metal and 132,500 tons of alumina hydrate against the targets of 29,700 tons and 129,000 tons respectively. Bauxite production during the month has been 401,500 tons. Nalco sold 65,013 tons alumina hydrate and 25,213 tons of aluminium metal during the month. It produced 502.56mn units of electricity and sold 61.72mn units to GRIDCO.

The cumulative production of bauxite, alumina and aluminium during April-November, 2004 of the company has been 2981,659 tons, 1,049,000 tons and 217,315 tons respectively. The production of captive power plant during this period has been 3,783.56mn units. The cumulative sale of alumina/ hydrate during this period has been 597,495 tons excluding zeolite sale of 1,840 tons. The company has sold 201,604 tons of aluminium (cumulative), out of which 134,840 tons were sold in the domestic market and 66,764 tons were exported. The company during these 8 months has sold 518.14mn units of power to GRIDCO.

Record rabi foodgrain output expected

Record rabi foodgrains production is expected during the current season. While informing the Rajya Sabha the Minister of State for Agriculture Kanti Lal Bhuria said, rabi output is expected to surpass previous record of 104.29mn tons that was registered four years ago. He further said, assuming normal weather and related factors, as also favorable impact of the reward scheme, it is reasonable to expect rabi foodgrains production to exceed the record level. The production of rabi foodgrains stood at 86.38mn tons in 2002-03 while after the fourth advanced estimates in 2003-04, the rabi foodgrains production reached 100.01mn tons.

Spot rubber prices stay unchanged

Spot rubber prices remained unchanged on Friday December 3, 2004. Both the buyers and seller stayed on a sideline in the absence of clear direction. The NMCE rubber futures for December delivery were quoted at Rs51.45 (51.62) a kg with moderate volumes. The January delivery was quoted at Rs52.69 (52.54), February delivery at Rs53.60 (53.37) and March delivery at Rs54.70 (54.40) per kg for RSS 4. The spot rubber rates per kg of RSS 4 Rs50 (50); RSS 5 Rs48.50 (48.50); ungraded Rs46 (46) ISNR 20 Rs49 (49); latex 60% Rs38.50 (38.50).

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