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Crude oil futures extended gains in the Asia electronic session today as the China manufacturing Purchasing Managers' Index came in slightly stronger than the preliminary reading, printing at 50.5.

The final reading for HSBC's closely watched China manufacturing Purchasing Managers' Index came in slightly stronger than the preliminary reading, printing at 50.5 on Monday from an initial 50.4. The data confirmed the index's rise above the 50 level -- which divides expansion from contraction -- for the first time in 13 months. The HSBC China PMI's final October reading was 49.5.

Over the weekend, the government-sponsored version of the China manufacturing PMI for November came in at 50.6, up from 50.2 in October.

Light sweet crude futures for delivery in January are trading up 28 cents at $ 89.77 per barrel. On Friday, it rose 1% to settle at $88.95 a barrel by close of trade at a two-week top, as hopes for an agreement to avoid the U.S. fiscal cliff supported market sentiment.

Markets participants continued to monitor developments surrounding the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1. There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the four weeks left before the January 1 deadline.

In the coming week, investors will be looking ahead to Friday’s highly anticipated data on U.S. nonfarm payrolls, as investors attempt to gauge the strength of the country’s economic recovery. Policy decisions by the European Central Bank and the Bank of England will also be closely watched.

MCX December crude oil futures may open today’s session near Rs 4870 levels with resistance near Rs 4900 levels.

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Bullion metals ended lower at Comex on Tuesday, 27 November 2012. Gold prices ended lower for second straight day as the dollar headed up and a sort of debt deal was reached at Greece. Upbeat US data also took some shine away.
Gold for December delivery fell $7.3 (0.4%) to settle at $1,742.3 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.
On Tuesday, December silver fell 16 cents, or 0.5%, to settle at $33.98 an ounce.
In overnight trading, the European stock markets rallied only modestly on news that Euro zone leaders meeting in Brussels agreed late Monday to disburse fresh bailout funds to cash-starved Greece. Most market watchers had reckoned EU leaders would grant new monies to Greece. The world market place showed no significant reaction to the as-expected news on Greece.
A meeting to discuss Greece's finances wrapped up early Tuesday with Greece's institutional lenders reaching a deal to pave the way for Athens to receive almost 44 billion euros (almost $57 billion) of financial aid, while bringing its debt down to a sustainable level. The deal is expected to trigger another aid payment for the debt-struck country.
A heavy slate of U.S. economic data released Tuesday did show generally better-than-expected readings overall, and that put modest upside pressure on the U.S. dollar index, which in turn helped push gold and silver prices to their daily lows.

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Bullion metals ended lower at Comex on Tuesday, 27 November 2012. Gold prices ended lower for second straight day as the dollar headed up and a sort of debt deal was reached at Greece. Upbeat US data also took some shine away.

Gold for December delivery fell $7.3 (0.4%) to settle at $1,742.3 an ounce on the Comex division of the New York Mercantile Exchange on Tuesday.

On Tuesday, December silver fell 16 cents, or 0.5%, to settle at $33.98 an ounce.

In overnight trading, the European stock markets rallied only modestly on news that Euro zone leaders meeting in Brussels agreed late Monday to disburse fresh bailout funds to cash-starved Greece. Most market watchers had reckoned EU leaders would grant new monies to Greece. The world market place showed no significant reaction to the as-expected news on Greece.

A meeting to discuss Greece's finances wrapped up early Tuesday with Greece's institutional lenders reaching a deal to pave the way for Athens to receive almost 44 billion euros (almost $57 billion) of financial aid, while bringing its debt down to a sustainable level. The deal is expected to trigger another aid payment for the debt-struck country.

A heavy slate of U.S. economic data released Tuesday did show generally better-than-expected readings overall, and that put modest upside pressure on the U.S. dollar index, which in turn helped push gold and silver prices to their daily lows.

The dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.2% on Tuesday. The Euro currency also was initially supported on the Greece news but could not hold those gains as the day wore on.

In today's economic news at Wall Street, Consumer confidence rose in November to its best reading in more than four years. The latest consumer confidence reading for November came in at 73.7, while market expected a reading of 73.0. The Conference Board said its consumer confidence index rose to 73.7 in November from 73.1 in October. That's above the 72.2 level forecast. The October reading was upwardly revised from 72.2.

Separately, the September Housing Price Index from the FHFA increased by 1.1%, which follows a 0.7% increase observed during the prior month. Also, the September Case-Shiller 20-city Home Price Index rose by 3.0%, while a 3.1% increase had been expected. This followed the previous month's increase of 2.0%.

Durable goods orders were unchanged in October, which was better than the 0.4% decrease that had been expected. Excluding transportation related items, durable goods orders increased in October by 1.5%, which was better than the 0.4% decrease that had been broadly anticipated. Prior month's reading was revised down to reflect an increase of 1.7%.

Traders and investors are also focused on the negotiations among U.S. lawmakers and President Obama regarding the so-called “fiscal cliff” tax increases and spending cuts that are approaching.

At the MCX, gold prices for February delivery closed lower by Rs 149 (0.45%) at Rs 32,594 per ten grams. Prices rose to a high of Rs 32,825 per 10 grams and fell to a low of Rs 32,550 per 10 grams during the day's trading.

At the MCX, silver prices for December delivery closed lower by Rs 198 (0.31%) at Rs 63,536/Kg. Prices opened at Rs 63,877/kg and fell to a low of Rs 63,361/Kg during the day's trading.

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Report of deficit in world Copper markets coupled with fall in Dollar against the Euro became an ideal combination of rise in Copper prices. LME Copper forwards enjoyed its outing in the week ending 23 November 2012, with gains of 2.5% to settle at $ 7773 per tonne.

On a cumulative basis, refined Copper markets registered a seasonal deficit of 522000 tonnes in Jan-Aug 2012. The production deficit in Copper during first eight months was 77000 tonnes. World Copper markets were in minor deficit of 8000 tonnes in August 2012. After making seasonal adjustments, the refined Copper markets were in deficit of 23000 tonnes in August.

LME Copper inventories in the week dropped by 5350 tonnes to 249825 tonnes. Money managers continued to bet on the bearish positions on Copper. The Commodity Futures Trading Commission Managed money funds slashed bullish bets on Comex copper futures and options in the week ended 30 October 2012.

Traders in the category sold 4182 bullish bets on Copper while adding another 6921 short positions, or bets on lower prices. This took their net positions down 61 percent to 6964 long contract from 18067 long contracts a week earlier.

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Gold futures began week on strong note in Asia electronic trades today, after retreating 1% last week on ongoing fears over the looming fiscal crisis in the U.S. and growing tension in the Middle East.

December delivery gold futures are trading up $7.3 at $ 1722 an ounce on the Comex division of the New York Mercantile Exchange. The counter may find support near $1685 levels with resistance near $1740 levels in the near term.

Silver for December delivery fell 1.1% on Friday to settle the week at $32.30 a troy ounce. Earlier in the session, silver futures touched a one-week low of $32.02 a troy ounce. On the week, silver futures shed 0.7%.

Investors continue to remain concerned over the looming “fiscal cliff” in the U.S., approximately USD600 billion in automatic tax hikes and spending cuts due to come into effect on January 1. Congressional leaders said talks with President Barack Obama on Friday to avert the fiscal crisis were "constructive."

There are fears the U.S. economy will fall back into a recession, unless a divided Congress and the White House can work out a compromise in the seven weeks left before the January 1 deadline.

Gold hit a one-week low of $1,704.55 a troy ounce on Thursday, after the World Gold Council said global demand for the precious metal dropped 11% in the third quarter.

In the coming week, market participants will be focusing on developments relating to the U.S. fiscal cliff, as well as Tuesday’s meeting of the euro group of finance ministers to discuss unlocking Greece’s next aid installment.

MCX December gold futures may open today’s session near Rs 31,670 levels with resistance near Rs 31700 -750 levels.

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An Obama win favors a continuation of the current easy money policy. The Obama win did remove uncertainty about the future of Fed policy.  The Fed’s increased emphasis on employment is here to stay. The Gold Markets reward this certainty by bidding up Gold, selling off the US Dollar versus all major currencies. Comex gold and silver shot up higher on Expectations of an Obama win & also as the market recovered from the rather hard slide that it took on Friday when Gold markets priced in a Romney win. Gold & Silver will retain bullishness till the easy monetary policy remains in force as Inflation rises are a certain aftereffect of this kind of a policy action. The Fed’s easy-money policy has pushed down the value of the dollar, though, and some worry more dollar weakness may be in store, particularly if investors see signs of rising Inflation. Gold remains a natural hedge option in a scenario where Inflation rises sharply. The Fed said Oct. 24 it will maintain $40 billion in monthly purchases of mortgage debt and probably hold interest rates near zero until mid-2015. The Fed’s increased emphasis on employment is here to stay. The US Dollar reversed earlier gains versus the Euro after Obama defeated Republican challenger Mitt Romney, on speculation Obama’s re-election as President will boost chances of the US continuing monetary stimulus policies that tend to weaken the currency. The US Federal Reserve had unveiled a plan in September 2012, to buy $40 billion of MBS – Mortgage-backed securities every month in a third round of so-called quantitative easing – QE3, after $2.3 trillion purchases of bonds from December 2008 and June 2011. Any worries that the Federal Reserve is done with stimulus are unfounded and the future still looks bright for more easing programs. Fed may soon introduce a new plan of Treasury purchases when Operation Twist winds down into year-end. A Chinese National Party Congress should be favorable to industrial metals, crude oil and gold due to prospects for new stimulus policies. Also if Greece passes austerity measures and receives further financial assistance, “this should make markets feel better and help commodities to move higher. We should start seeing more demand for gold as a result of purchasing-power hedging and due to the low opportunity cost to hold it, as real interest rates are likely to decline further. It could be argued that the Fed would not mind higher inflation, and that if there was a policy error to be made, it would be on the side of inflation. All above mentioned factors are highly Gold supportive. Lower interest rates historically have helped gold prices and higher rates have been gold-negative.

Commodity & Stock Market Updates

The Indian rupee commenced lower on Thursday, November 01, 2012 tracking a sharp overnight fall in the European unit versus the US dollar. Rupee snapped two successive months of gains to fall in October. Domestic equities were also sulky, mostly in the red, unsupportive of the local unit. The domestic currency opened lower by 8 paise at Rs 53.88 to a dollar and dipped to a low of 53.90 so far during the day. However, a somewhat steadier euro after the steep fall overnight helped slightly push the local unit to a high of 53.70, until now. In the spot currency market the Indian unit was last seen trading at 53.75, higher by around 6 paise or 0.11% as compared to previous close at 53.81.

Domestic benchmark indices edged lower in early trade as most Asian stocks were in red. Asian shares also fell on Thursday as China's official manufacturing PMI, while confirming a trend toward recovering growth, lacked the punch to convince investors that the slowdown was bottoming out. Foreign institutional investors (FIIs) bought Indian shares worth a net Rs 248.48 crore on Wednesday, 31 October 2012, as per provisional data from the stock exchanges. At the time of writing, the BSE Sensex was down 41.92 points or 0.23% to 18,463.46 while the S&P CNX Nifty was down 13.10 points or 0.23% to 5608.60.

Meanwhile, the euro bought $1.2964, little changed from its New York close. It remained well within a $1.2800-1.3200 range seen since early September. Ongoing uncertainty about if and when Spain will seek a bailout and trigger the European Central Bank's bond-buying programme and whether Greece will secure more emergency loans continued to plague the single currency.

In the domestic currency futures market on the NSE, the forward month November contract, opened at 54.07 on Thursday, November 01, 2012, higher than the spot market rupee. The contract hit an intraday high at 54.15 and registered a low at around 53.90 so far during the day. At the time of writing, the NSE November 2012 USD/INR was trading at around 53.98, down almost 10 paise or 0.19% as compared to previous close at 54.08.

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Economic contraction in Spain continues for a fifth straight quarter while austerity measures kept Inflation at a 17-month high. Economy, Inflation, Unemployment & Austerity Measures are all moving sharply in Spain, albeit in the undesired direction. Recession in Spain extends deeper into the third quarter as Inflation continues to stay high in October. Value-added tax rose in September as part of the government’s 100 billion-Euro austerity program, pushing up prices. Austerity program to cut the public deficit is also pushing up living costs as prices rose sharply in October, piling pressure on the government to revive a paralyzed economy as it stalls over requesting aid. Prime Minister Mariano Rajoy has already introduced austerity measures worth over 60 billion euros ($77.6 billion) to the end of 2014 to try to deflate the deficit to below 3% of GDP from 9% last year. But rising social security costs, unemployment benefits and interest payments on public debt are undermining his cost-saving measures. Spain, Eurozone’s fourth largest economy has again moved to the forefront of the bloc’s fiscal crisis on concern that mounting debts owed by its regional administrations could make public finances unsustainable. The weakening Euro in the meanwhile also slipped further on doubts over whether Greece, the country that triggered Europe’s debt crisis, can agree to a deal on new austerity measures and its international lenders can figure out how to make its huge debts sustainable.

NCDEX UPDATES OF THE WEEK

Pepper futures drooping for second day on short selling at higher levels triggered by weak exports demand for Indian pepper. Tight availability against the strong domestic demand limited the weakness. The NCDEX Pepper for the most active November contract ended the day at Rs 43590, down Rs 160 or 0.37% from the last close.

Pepper arrivals decreased to 180 quintals from 520 quintals and slipped to 200 quintals from 550 quintals over previous close. Black Pepper for ready delivery in Kochi, closed Friday's trading session on secure note with MG-1 at Rs 42,100 and Un-Garbled pepper at Rs 40,600 per 100 kg.

Indian pepper prices were not supporting at higher levels due to the weak export demand for Indian parity due to its higher prices in the international markets. India's total manufacture of pepper during the year 2012 was estimated at 43,000 tonnes against 48,000 tonnes in 2011. India's crop dipped due to old vines, static acreage, low replanting and high labor cost. Besides, unfavorable weather conditions in 2011-12 affected the production. There are news the next year crop will be slightly better around 50,000 tonnes as crop condition in Idukki in Kerala and Karnataka are likely to be better. Indonesia has harvested with yields higher than estimated. Vietnam has exported nearly 93,000 tonnes of pepper valued 636 million USD during the first nine months of 2012. bazaar source said, all eyes are looking at Indonesia and Brazil.

The Pepper futures unsuccessful to hold above Rs 44000 per quintal recently and slip to the low Rs 43300 level on Friday. The answer gain almost Rs 160 or 0.37% to close at Rs 43590 per quintal. The open interest added 2.32% to 4,440 tonnes, representing short selling.Pepper