Gold prices have recovered half their month's loss in the past week in the international market. In the spot market here, it has seen sharp recovery. This, when few other commodities are yet to see something comparable.
After the US equity market recovery and reports of their central bank possibly withdrawing liquidity measures early, followed by China's weak economic data, there was a huge selloff in all commodities. The commodity fell 10-15 per cent in a week's time.
Gold prices have jumped now after huge demand from consumers across markets internationally and reports of non-European central banks adding gold to their reserves. Several institutions also gave buy calls as gold fell sharply last week.
Silver prices have seen a reversal in the past two days but due to high volatility, it gave away the gains from high levels.
Gold fell $214 an ounce in two trading sessions last week. It was $1,561 on April 11 but fell to $1,348 on April 15. All this happened after reports of troubled European nations' central banks being likely to sell gold. However, this did not happen and Goldman Sachs reversed its sell call in gold, while CLSA gave a buy call at lower levels. Plus, large-scale consumer buying resulted in gold recovering $118. The intraday recovery was more.
Gold in the Mumbai market fell 11.1 per cent from Rs 28,890 for 10g to a low of Rs 25,680, but it has since recovered by 6.3 per cent. Silver had fallen 15 per cent and recovered four per cent to trade today at Rs 46,435 a kg here.
Recovery in other commodities has been on a lower scale. Crude oil started falling much earlier and early April Brent crude oil was around $112 a barrel, which fell on lower demand forecasts by the International Energy Agency. Copper also fell on lower growth estimates. Brent oil has recovered from a recent low of $97 to trade around $102; copper, which lost nine per cent, has recovered only three per cent in the two days since.
Palm oil fell three per cent following a fall in crude oil. The biofuel-related demand for palm oil was also expected to fall, due to lower crude oil prices.
On April 11, RBD palm oil was $800 a tonne, which fell to $772 and is now trading at $782. US cotton fell nearly four per cent, from 84.6 cents a pound to 81.1 a pound, on fears that China's lower growth might reduce demand. It is now trading at 81.3 cents a pound.