Weekly commodity outlook

Bullions

Gold prices in India are expected to remain on firm footing as weak local currency Rupee is supporting the prices. Investors are not taking big positions in COMEX as Fed speech in last week of August at Jackson Hole will be keenly watched to get further hint about stimulus known as QE3. This week FOMC minutes on Wednesday will also affect precious metals. Meanwhile the physical demand has seen a decline whereas the ETF demand is slowing increasing. According to the World Gold Council ``Global gold demand in the second quarter fell by 7% from the same period a year ago to 990 metric tons, largely as a result of declines in the world`s two largest consuming nations of China and India``. However, gold investment picked up in Europe as investors there sought a safe harbor from the sovereign debt crisis. Further, central banks remained significant buyers. Weaker demand from the jewellery investment and technology, sectors was offset to some extent by a surge in buying by the official sector.

Gold can trade in a range of 29,700-30,500 in MCX while COMEX gold can trade in a range of USD 1,590-,1650 in near term. Silver can trade in a range of 52,500-55,000 in MCX and USD 27.50-29 in COMEX. Moreover the movement of local currency rupee will also be watched by the investors which can move in a range of 55.4-57.5. The dollar index movement will be very crucial for bullions as it can trade in a range of 82-83.2 in near term.

Energy

Crude oil future can continue its upside momentum as Iran tensions and hurricane concerns are keeping the prices buoyant. Crude oil and products prices have rallied in recent days on signs of tightening supplies, caused in part by operating snags at several refineries. Crude oil can trade in a range of 5,200-5,420 in MCX and USD 93-98 in NYMEX. The spread between WTI and sweet crude has narrowed down from nearly 22 to 19 recently. In recent weeks, North Sea Brent remained at least USD 20 a barrel more expensive than West Texas Intermediate traded in New York as the gap almost doubled since June 20. The growing difference underscores how falling output from the North Sea`s aging oilfields and U.S. led sanctions on Iranian crude sales are stoking Brent while a production boom adds to a glut of blocked-in US supplies, limiting WTI gains. The White House is considering a plan to potentially release of oil from the Strategic Petroleum Reserve. Natural gas can remain on mixed path as prices can trade in a range of 145-163 in MCX.Natural gas prices are focusing on forecasts of milder temperatures in the days ahead and on the broader supply picture as the end of the summer approaches. The summer is one of the most important periods of the year for natural-gas use, as consumers turn to gas fired electricity to cool their homes. The overall amount of natural gas in storage currently is about 12.5% above the five year average for this time of year.

Metals

The selling pressure in the base metals  complex may witness some pause in its momentum as short covering  at current levels due to decline in greenback and hope of stimulus from China and US can support the prices. Shortage of scrap in copper is capping the downside in Red metal. Scrap supply has become the ``savior`` of the copper market for the past two years, bridging the gap between growing metal demand and stagnant mine supply. Chilean production is starting to pick up after a shaky start to the year, with a rise of 2.5% in the first half of 2012 in the world`s largest copper-mining country. Chinese production is running higher than expected, growing at 20% year-over-year.Copper prices  can trade in a range of 410-425 in near term while lead can trade in a range of 102-106. Recently China showed that lead acid battery production rose by 45% year-over-year in July alone and has risen 25% year-to-date. Nickel prices are expected to take support near 850 in MCX. Aluminium prices may see some short covering and can test 104 in near term. Oversupply concerns in Zinc can keep its prices under pressure but short covering at current levels cannot be denied. Zinc premiums in Asia (excluding China) had jumped to USD 90-USD 100 from USD 40 two weeks ago as a lot of metal in the region was tied up in financing deals or behind long queues at warehouses. Recent China government comments stirred hopes of more policy action to stimulate the economy.