Gold:[/b]
Gold, the yellow metal which is obsessed over by Indians in a way which is unparallel anywhere else in the world played a major role in the economy. Gold is seen as one asset whose prices can never go down.
Gold was another investment that went from haven to headache. The price of gold gained steadily for more than a decade, driven by concerns about the health of the US economy and rising inflation. The metal plunged in 2013 as the US maintained its recovery and inflation was nowhere in sight.
After a 12 year rally, the year 2013 saw gold losing its 'safe haven' tag for investors, especially in the month of April.
International gold prices may continue to correct in 2014.Domestic gold prices have been cushioned from the global crash but this could change in the New Year as the government rolls back some of the harsh measures introduced in 2013. A reduction in the import duty and other restrictions can bring down the domestic gold prices. Investors will have to monitor global developments and government policy measures more closely in 2014.
Silver:[/b]
According to industry sources, Indian has already imported 2,400 tonnes of silver in the first 5 months of 2013 compared to 1,900 tonnes for the entire year in 2012.
Going back into the past when silver was at the $20 level and that was breaking into new high ground, we saw the $21 level achieved on a spike and silver gave up its price from that point in 2008 until August 2010. This was about 2 ½ years before the price of silver finally made it back to the $21 level. Once the level was achieved at this later date silver kept going all the way to the $49 level.
This time however our view is that silver needs to work its way back to the $30 level and at this time it may take nine months or so just to achieve that price level.
India is the exception as silver has been the traditional store of value for most of the population up until the last decade where gold has been so prominent. Silver of course did come on strong in India after the government of India decided to tax gold purchases and the population went for a massive amount of silver. It will be interesting to see if there is any follow through in 2014.
Copper:[/b]
Over the last 12 months the price of the red metal (copper) has fallen more than 12 percent, from $3.72 per pound to $3.26 per pound.
But there are fundamental changes happening that should raise it out of its doldrums. In fact those changes have already begun emerging: from Dec. 11, 2013, to Jan. 8, 2014, copper’s price edged up 1.7 percent.
For 2014 forecasting is done for the copper that demand growth to be a little slower, but if our forecast of around 800,000 tons is achieved, then demand growth in 2013-14 will be the third strongest two-year demand growth expansion in the copper market for more than 20 years.
Crude oil:[/b]
For 2013, India - Iran's top oil customer after China - imported 195,600 bpd of oil and condensate, down 38 percent compared with 315,200 bpd in 2012, according to data obtained from trade sources.
India's purchases from Iran declined nearly 14 percent last month compared with November and about 31.5 percent from a year ago.
India imported nearly 40 percent less Iranian crude last year, with no sign in the last month of 2013 that the easing of Western sanctions in a landmark deal resulted in Indian refiners bumping up their purchases.
India's cuts last year due to the toughened sanctions that were put in place in 2012 were deeper even than the targeted cut of 15 percent to 220,000 bpd in average imports from Iran for the year ending March 31, 2014.
And New Delhi could take just 180,00-190,000 bpd in 2014/15 as it may have to cut imports further if sanctions against Iran are not fully lifted later this year, an oil ministry official said earlier in January.
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