Saturday, April 23,
On Friday, 22nd April, we saw extraordinary price action in the market. In the morning trade, Ingot prices opened at Rs 31200/MT, and as the day progressed the prices kept gaining momentum.*; and by the end of the day market closed at Rs 31,750/MT. Traders and manufacturers from across the markets were asking the question “Why is Mandi going up?, What has changed in a single day?”
All is not as good as it looks. Markets lacked depth as there were no pointers from the futures market to take cues from. Buyers preferred to stay on the sidelines once the prices went upwards of Rs 31,500/MT. A trader based in the market said “Rs 31,750/MT is only the quoting price; no one bought at these rates. Few people are trying to misguide the market by artificially jacking up the prices as futures markets remain closed today”.
It was very hard to find out why the price went up by over 2% in a single day with no change in fundamentals. Prices in the rest of the country did not change as drastically as Mandi Gobindgarh.
Now, market participants are carefully looking at the futures market; if NCDEX also provides its support and closes above Rs 29,000/MT on Saturday, we can say that yesterday’s price raise was justified. But if that doesn’t happen then this 2% price action should be ignored as a price aberration.
Gobindgarh on Saturday morning was seen quoting basic Ingot at Rs 31,650-700/MT which, in less than an hour’s trade came down to Rs 31,500/MT. However, trades remain very minimal. NCDEX closes for the day at 2.00 PM. It will be interesting to note movements post that.
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