INDIAN ECONOMY â AN OVERVIEW - MCX

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DATABANK NON-AGRI COMMODITIES DATABANK -- AGRI COMMODITIES COMMODITY Inside... Precious Metals >> 76 Gold >> 78 Platinum >> 85 Silver >> 91 Industrial Metals >> 98 Aluminium >> 100 Copper >> 106 Iron Ore >> 113 Lead >> 118 Nickel >> 124 Steel >> 130 Zinc >> 138 Energy >> 144 Carbon >> 146 Crude Oil >> 154 Natural Gas >> 162 Power/Electricity >> 169 www.mcxindia.com / www.pwc.com/in/en A PwC & MCX Joint Endeavour 75
EDITORIALS PROLOGUE EXPERTS' VIEWS INDIAN ECONOMY Bullion: A symbol of wealth Gold, along with silver, categorized under the bullion segment, considered a symbol of wealth, good luck and success over the centuries. Both precious metals played a pivotal role in the growth and functioning of large central banks worldwide. Owing to scarcity, these metals have historically been considered a form of currency, and currently despite being regarded only as investment and industrial commodities, gold, silver, platinum and palladium possess an ISO4217 currency code. From ancient times bullion has a special place in Indians’ heart. Naturally, the country has emerged as the largest consumer of gold and one of the top consumers of silver. According to World Gold Council, of about a total of 158,000 tonnes gold have been mined until today, Indians’ private holdings stand the highest in the world at about 15,000 tonnes (almost 40% of its annual GDP) vis-a-vis Americans’ at a mere 4,000 tonnes. According to QNB Capital, Central bank gold reserves for all countries cumulatively rose by over 2% between 2008 and 2010. The central banks of Brazil, Russia, India and China, as well as those in the Middle East, are major buyers of gold, while developed regions like the US and Eurozone hold more than 75% and 60% of their total reserves in the yellow metal. Continuing the bull run of the past few years, gold and silver futures on MCX moved up almost through the year. While gold futures prices clocked a yearly rise of over 24%, silver futures jumped by over 72% in 2010. Enhancement in its appeal as a safe haven amid fragile global economic recovery and rising inflation worries worldwide helped bullion prices maintiain the uptrend throughout. In the first half of the year, lingering concerns over the Greek debt issue, Standard & Poor’s Commodity Exchange (contract) “When we have gold we have fear, and when we have none, we are in danger” (Old English proverb) 21000 19500 18000 16500 15000 1-Jan-10 Price Unit Open High Low Close downgrading of Spain’s sovereign debt rating, which came a day after S&P had slashed Greek debt to junk status and downgraded Portugal, weaker than expected US econmic data raising fears about economic recovery, and political unrests in Korea helped the rally in bullion, especially in gold prices. Subsequently, the upside was capped and the prices slid a tad and traded flat as demand for physical bullion in India became slack on high prices and seasonal factors. Later, the prices rebounded soon and edged up on weaker-than-expected US jobs data, raising doubts over global economic recovery, and Fed Chairman’s announcement of quantitative easing (QE) worth $600 billion to provide impetus to the US economy, which caused inflation worries. Silver prices zoomed on strong investment demand in addition to industrial demand. With the rally lasting right until the year-end, gold and silver futures on MCX touched their all-time high of Rs.20,924/10 gm and Rs.46,383/ kg in the last month of 2010. European debt concerns & fragile global economic recovery Bullion price movement in 2010 Weak physical demand and seasonal slack period Source: Metastocks Gold (Rs./10 grams) Silver (Rs./kg) Annualised Volatility Strong investment demand in silver Volume (in lots) Gold MCX (1 kg) Rs/ 10 gms 16,683.00 20,924.00 15,950.00 20,728.00 11.95% 31,581,484^ COMEX (100 tr. oz) US$/ tr. oz 1,099.00 1,432.50 1,044.50 1,421.40 16.06% 44,578,447 Silver MCX (30 kgs) Rs/ kg 26,730.00 46,383.00 23,610.00 46,217.00 21.88% 37,766,114^ COMEX (5000 tr. oz) US$/ tr. oz 16.94 30.98 14.65 30.94 31.97% 12,809,591 Source: Respective exchanges’ website; ^ all contracts-all variants 29-Jan-10 26-Feb-10 26-Mar-10 23-Apr-10 21-May-10 18-Jun-10 16-Jul-10 13-Aug-10 10-Sep-10 8-Oct-10 5-Nov-10 3-Dec-10 31-Dec-10 48000 41500 35000 28500 22000 76 Commodity Insights Yearbook 2011
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INDIAN ECONOMY â AN OVERVIEW - MCX

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INDIAN ECONOMY â AN OVERVIEW - MCX