Thursday, June 2, 2011

MCX Commodity Market Report for June Month

The month of was May very dull for the investors as most of the asset classes gave negative returns in the equities or the commodities segment. 

Precious Metals witnessed heavy selling in first half of the month. Silver prices plunged more than 30% while gold plunged almost 7%, after exchanges raised margin requirements to curb speculation.  However, prices did recover in the second half on buying support to lower levels.
Base Metals the trend was again down, with liquidation seen in all the metals taking support from the fundamentals of supply-demand equation. Aluminum prices closed with negative m-o-m returns for the first time in 6-month, while the prices of Lead & Zinc remained under pressure due to high inventory levels. other metals Nickel was the worst performer with losses of more than 10%, due to seasonal change in demand from the stainless-steel sector.
Energy Segment both Crude Oil & Natural Gas prices closed in negative. Crude oil prices fell close to $95 per barrel from above $115 per barrel in just 6-days. Natural Gas prices too were down, but losses were limited by a seasonal decline in drilling rig counts.

In the month of June 2011, we expect prices of precious metals to trade positively with buying support expected at correction in Gold, while silver prices are expected consolidate initially and then later it is expected to take direction from market forces. In the base metals, we see some recovery in Nickel prices after last month's correction, Copper & Aluminum prices are expected to consolidate, zinc & Lead prices are likely to consolidate. Crude Oil prices are expected to consolidate and Natural Gas, any changes in weather conditions in parts of US.

Overall, we see a good buying opportunity ahead in the commodities segment.

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