A Year performance of present gold trading contract:

The gold performance is better as compare to 2010, The last year Average price is Rs19640 but it was moved to 21000 Rs during 2011. The yearly performance of gold is analyzed by taking consideration of present contract trading in the Bullion market.
-Contract Expiry Date:- 5th April2011

Contract Expiry Date:- 4th June2011

Contract Expiry Date:- 5th Agust2011

Contract Expiry Date:- 5th October 2011

Analysis of present trading contract yearly movement:The yearly movement of gold is influenced by various factors mainly core price drivers of Gold, like inflation, interest rate, the dollar value or other. This core price driver largely changes during 12 month gap period and also the number of factors effecting on commodity market is varies. Some of important gold market moving factors are as follows. Tightening of gold supply Gold mining is decreasing and the demand for gold is increasing. Gold supply has decreased by almost 40 per cent as the cost of mining, legal formalities and geographical problems have increased which has led to a fall in gold mining. Economics have taught us that lesser the supply, greater the demand and in turn greater the increase in price. Lowering interest rates increases gold prices as gold becomes a better investment option vis-avis debt products that earn lower interest. Gold loses its shine in a rising interest rate scenario. Geo-political concerns Whenever there is geo-political strife, investors around the world rush to prevent erosion of their investments and gold as a safe haven attracts one and all. For example after terror strike in the

United States the demand for gold had increased. With the recent events like tension between India-Pakistan, Israeli strikes over Gaza, the ongoing war in Iraq, the tension between US and Iran coupled with recession have investors scrambling for gold. Central bank demand With the dollar losing its value, central banks of most of the developed countries have started to increase their share of gold. This explains the increasing market demand for gold.

Weakness in financial markets General rule of thumb in the market is that gold is always attractive when all other investments are unattractive. Why is this? As gold is negatively co-related to stocks, bonds, and real estate, gold is considered to be a safe haven and hence during any crises, investors would like to sell off what they would term as risky investments and be invest the funds in gold. Huge purchasing habit by china China is adding to their reserve of gold. It has been well known that China is trying increase the amount of gold that they hold so for that reason alone the price of gold has gone up. They are pushing for their citizens to invest or buy more gold and they need to be sure that they have an excess amount of gold in stock to meet their demands. They hold the title for the most populated area so their demand for gold is much higher than any other area. Positive response to Portugal PM words:The gold price reacted positively to the Portuguese auction, rising to its new record high. Later in the day, Portugals Prime Minister, Jose Socrates, announced that the nation requested financial assistance from the European Union. The price of gold again responded favorably, rebounding from its intra-day low.

Interpretation:In the mid 2010 the price of gold is Rs 18,000 but at the end of 2010 the market crosses Rs 21,000. The price movements of different trading contract are not moved in the same manner mainly because of different maturity period. Each contract is affected by different price drivers based on the expiry date of contract. As compare to last year the movement of gold price is in positive way. The economy is in the recovery stage of great 2007-2008 depression so it indicator to development of the economy.

Gold guinea:Gold Guinea is a coin that was minted in the United Kingdom between 1663 and 1813, originally worth one English Pound sterling and weighing around 8.3-8.4 grams. The name was derived from Guinea in Africa, from where most of the gold used to make these coins originated. In the India context, Gold Guinea refers to 8 gram gold coins of atleast 0.995 purity, which are mainly utilized as a retail investment. The demand for gold coins for retail investment is estimated to be around 35 tonnes in India and this is expected to grow at a rate of 40% in the coming years.

Performance of Gold guinea:The last month (March) performance of gold guinea can be understand by analyzing the gold guinea trading chart.

Contract Expiry Date:- 31st March 2011

Contract Expiry Date:- 30th April 2011

Contract Expiry Date: - 31st May 2011

Analysis of Gold Guinea Monthly trading chart:As compare to gold, the market performance of gold guinea is not so familiar even though it has equal value of gold main. It has high volatility in the beginning of the month, at the month mid nearly 15 to 18th of March gold guinea went down, on the same time gold main was in bullish mood. This high volatility may be caused by number of factors but some core pricing drivers are as follows. An under supply of newly-mined gold. Gordon Brown striking out on his IMF gold sales proposal, with the US opposing it. The Washington Agreement supporting gold by being generally against excessive Central Bank gold sales. The real possibility of Asian countries buying whatever gold the European Central Banks dish up. The never-ending story of the US trade deficit. Gold is a "de facto currency" and therefore not subject to demand deficiencies caused by world wide economic slowdowns.

 Gold is an inflation fighter and they can see stagflation approaching. Now-a-days dollar is weakening day by day against other major currencies . India therefore purchased 200 metric tones of gold recently. Other countries also likely to take similar decision. Prices have moved sharper than it should have. It just because speculators moved it up up and up. Hence prices are expected to come down at faster space which happened in last few days just after Fed cut rate by 75 basis points. The situation in Libya, it seems quite bad and we see the flow of funds into safe -haven investment because of it, In addition to oil prices, other commodity that jumped due to crisis of Libya is gold. This precious metal prices jumped to 1% became U.S. $ 1,400 per ounce. Investors are competing to divert their investment to a safe place from inflation like gold. Every state in the world keeps its foreign reserves in the form of foreign currency i.e. $, Euro and pond. Gold is also taken as an asset in foreign reserve. Taking it as an asset was a tradition, very popular in the past that declined after the surge in value of dollar. Similarly the decline in the value of dollar gives rise to the demand of gold as a part of foreign reserves.

Interpretation:As commonly, fluctuations in the guinea market show that trading turnover of gold guinea. Gold main is probably show bearish only when international news spread out but gold guinea is the one commodity which is quickly response to both the national as well as international news. The most of the investor in gold guinea are big institutional investor so slight movement of gold guinea takes into deeper clash down of market.

A Year performance of gold guinea:The bullion market movement can analyze by throw understanding of drivers which make volatile commodity market Contract Expiry Date:- 31st March 2011 Contract Expiry Date:- 30th April2011

Contract Expiry Date:- 31st May 2011

Analysis of yearly performance of gold guinea:The price movement of gold guinea was followed the price of gold main. In the month January the price of gold guinea is 16,000 but within the two month it was went up to Rs 17200.each gold guinea contract were moved in different way but all movement of this is most similar movement of gold main, as compare to gold main it is more volatile due to following factors. Bank failures When dollars were fully convertible into gold, both were regarded as money. However, most people preferred to carry around paper banknotes rather than the somewhat heavier and less divisible gold coins. If people feared their bank would fail, a bank run might have been the result. This is what happened in the USA during the Great Depression of the 1930s, leading Resident Roosevelt to impose a national emergency and to outlaw the ownership of gold by US citizens. Low or negative real interest rates. If the return on bonds, equities and real estate is not adequately compensating for risk and inflation then the demand for gold and other alternative investments such as commodities

increases. An example of this is the period of Stagflation that occurred during the 1970s and which led to an economic bubble forming in precious metal. Currency fluctuation As gold is pegged to the US dollar, it has an inverse relationship with the dollar. Right now with US being in great financial turmoil, the dollar has weakened against many other currencies. Dollar is expected to weaken further and prices of gold are expected to rise further. Dollar is a de-facto currency of exchange around the world. But now with US on the brink of depression, gold is substituted as a safe haven for investments. Though dollar seems to be getting stronger, it may be a temporary effect and very soon it can head southwards once again, in turn making gold an attractive and safe investment

Higher inflation expectation Regulators have pumped in huge amount of liquidity to avert recessions. During the political meeting held in London recently it was restated that G-20 countries intend to maintain loose money policies unit economies recover clearly. The rising inflation expectation benefits gold as gold is seen as a good hedge against inflation. War, invasion, looting, crisis In times of national crisis people fear that their assets may be seized and that the currency may become worthless. They see gold as a solid asset which will always buy food or transportation. Thus in times of great uncertainty, particularly when war is feared, the demand for gold rises.

 Gloomy US dollar outlook Gold is traded in US dollar term but major consumption of gold is outside US. Hence weakening US dollars makes gold cheaper for Non- US investors and thereby increases demand for gold. Increase in investment demand Gold has limited statistical correlation with any of the assets classes as factors driving gold prices are different from factors driving other markets. Hence gold acts as an excellent portfolio diversifier. The average share of gold in global portfolios is quite low and given the present fundamental setup it is undoubtedly going to go up, leading to higher gold demand. Again gold prices have exhibited astonishing performance during recent financial turmoil and that has managed to attract lot of investors attention. Such investors are investing in gold by way of exchange traded products and physical gold bars and coins. Interpretation:Gold guinea is the mid way between the gold main and gold mini, so its volatility is influenced by the enormous factors. The price of gold guinea will go up suddenly due to national and international events and here sentiment of investor play a major role .

Gold Mini:
Gold is the oldest precious metal known to man and for thousands of years it has been valued as a global currency, a commodity, an investment and simply an object of beauty. Monthly trading chart of gold mini:-

Contract Expiry Date:- 5th april 2011

Contract Expiry Date:- 5th may 2011

Contract Expiry Date:- 4th June 2011

Analysis of monthly performance of Gold Mini:-

Investment in the Gold mini gives us a confidential return with high volatility, from above chart we can clearly understand the price of gold mini is come down (20950 to20000),as compare to gold and gold guinea ,gold mini is moving in reverse manner, the reason for that is as follows. World oil price hikes will trigger inflation, which is currently a major concern of global investors. Rising demand of gold jewellery. The investments in gold are influenced by comparative returns from other markets like stock markets real estate other commodities like crude oil. Domestically, demand and consequently prices to some extent are influenced by seasonal factors like marriages. The rural demand is influenced by monsoon, agricultural output and health of the rural economy. price of gold is mainly affected by changes in sentiment, rather than changes in annual production. It's a natural hedge against the US dollar. It traded predominantly between $420 and $435 this year, thus setting a new price floor, which is considered a "strong buy signal. There are signs of inflation in the coming year or so, and again gold has been the commodity that people have tended use to act as a hedge against gold The primary factors include the value of your country's currency and other currencies around the world. The lack of confidence in the Euro is one reason why gold is going up now. Another factor is the overall confidence in the world economy. Interpretation:The last month performance of gold mini is not so satisfactory, gold mini was in bearish movement. The main reason for difference in movement of gold, gold guinea and gold mini is the pattern of investment by institution and individual. The individual investors are invest more in gold mini and their sentiment play vital role in market movement.

A year performance of gold mini:Contract Expiry Date:- 5th April 2011 yearly Contract Expiry Date:- 5th May 2011

Contract Expiry Date:- 30th jun2011

Analysis of yearly performance of gold mini:The present contract which is trading in bullion market shows a high volatility, In January the price of gold mini is Rs 20,600 but after two month the price is same. so we can say gold mini has high short term fluctuation. Some of reason for this fluctuation is as follows UK inflation has now out-run the Bank of England's official upper tolerance of 3.0% per

year for 13 months running on the Consumer Price Index. India is a country of contrasts where lavish palaces are mixed with shacks. Poorer

layers of population prefer to keep their valuable assets in the form of gold jewelry so it can be easily carried in times of distress, floods and social unrest. Worlds overall economic situation is a very important factor influencing gold prices in

India. With many European countries being on the brink of bankruptcy like Greece, for example, or facing huge state budget deficits, multiple investors see gold as the only worthy commodity worth investing. If the worlds gold price is on the rise, it automatically affects Indian price for gold.

India is also worlds largest importer of gold from other countries. Rising or lowering

import costs inadvertently affect gold price in India today. Rising population in India triggers even higher demand for gold driving gold price in

India today even higher. India is known to be a country of parallel economy, money laundering and large scale tax

evasions. Since this unaccounted money cannot be kept in banks and the value of national currency is on the downfall, Indians prefer to buy gold jewelry or gold bullions to protect them from devaluation. Interpretation:From last 12 month performance of Gold mini is quit critical to analysis, even though bullion market was in up word trend gold mini is not supporting to movement especially from the last six moth it has same price with little volatility so we can say the investor of gold mini are try to hold and they expect long term profit.

Silver performance during 2010:When it comes to silver also, India is the worlds #1 consumer as well. And it can be seen from imports figure which are up sharply in 2010, nearing 30-year peaks. All such factors shows that in spite of such high prices from these countries will continue to climb up, taking bullion prices to their new highs in 2011. While both the gold and silver are set to rise further owing to continued currency devaluation and enhancing physical demand, Silver is likely to out perform gold, in our view.Silver prices is reasonably tracks gold and are more volatile than the yellow metal. LIFE HIGH TIME LIFE LOW TIME

COMMODITY EXCHANGE MCX SILVER COMEX 5035.00 194.50 45735.00 7551.00

2010 HIGH 45735.00

2010 LOW 23610.00

3069.00

1482.30

However, silver is also dependent on industrial growth, and therefore, price advance may be limited if the global economic recovery is perceived to have stalled. Moreover, the nation has received abundant monsoon in 2010, which is likely to result in abundant harvesting and rising agricultural income. Silver is expected to see higher demand from rural India in medium term. Silver is also likely to attract greater attention from the fund community; particularly in the US. Owing to its out performance, the white metal is likely to receive more importance than gold. The worlds largest silver-backed exchange traded fund, ishares silver Trust said that its holdings hit record at 10,941.34 tones by December 7, 2010. Such strong fundamentals clearly shows us that there is still a long way to go for bullion in coming period as current economical environment is igniting up the heat in this counter.

Present performance of silver (2011):The silver is famously called poor mans gold, due to recovery of economy from great depression of 2007-08 silver performed well. These days enormous use of silver for different

purposes from manufacturing to pharmaceutical industry made to silver hit 32 year hike in their price.

Last month performance of silver:Performance of silver is affected by various price drivers , the presently silver hits the 36 year records the reason for that level hike can be understand by analyzing the present performance of silver. Contract Expiry Date:- 5th May 2011 Contract Expiry Date:- 5th Jul2011

Contract Expiry Date:- 5th Sep 2011

Analysis of last month performance of silver:-

The silver is increasing continuously from last few months due to various reasons, some of them are as follows Market demand for silver and gold is good, particularly industrial demand for Silver, but this is not enough to absorb all the supply, so that leaves the rest down to investor demand. Players have been joining in, and holdings of silver stock, the popular way for retail investors to participate, rose 59.9 tons Thursday, the biggest single inflow since late January. On the same day, holdings of Silver jumped 42 ton to another record at 15,554 tons. After a weak January, prices of the precious metals rose in February when the unrest that toppled governments in Tunisia and then Egypt sent players to havens. Retail investors are showing particular interest in Silver coins in many countries, including the US. Last month the Utah State Legislature passed a bill accepting US Gold and Silver coins as legal tender and other States in the USA are considering similar legislation in a direct rebuke to the Federal Reserve and its ultra-loose monetary policy. Silver is more likely to follow gold higher, than base metals lower over the next year.

Interpretation:The present contract of silver performing well in the market, mainly because of increasing the silver use in various industries. The foreign market also in bullish trend that influencing performance of silver directly in the India. last month silver outperforming gold.

A year performance of silver:The current performance of silver is shown by below chart Contract Expiry Date:- 5th may 2011 Contract Expiry Date:- 5th jul2011

Contract Expiry Date: - 5th Sep 2011

Analysis of last year performance of silver:In the beginning of the year silver has slow movement after first month of this year silver start to show bullish trend continuously and now it is in Peak of market even gold also not performing like silver. Demand for silver from new sources like the solar energy, medical and water purification sectors is likely to quadruple in the next 10 years Part of the reason for this is that such an uptick in industrial demand, which has waned significantly as the photographic industry has used less and less of the metal, would result in a decrease in the current metal surplus. The Silver Book explains, "For years the silver market has been characterized by falling demand in the photographic industry and tepid jewellery offtake, while supply has seen rapid growth. The resulting market surplus has thus risen from 1,800t in 2000 to an estimated 7,200t in 2010." As the Silver Book says, "Investment demand has soared since the launch of the first silver-backed ETF in 2009, and now accounts for more than 400 Moz (12,440t) of silver held in bullion bank vaults. Physical investment in the form of coins and bars has also helped support prices in the face of this explosive growth in supply".

 The primary reason for our bullish outlook on silver is due to the continuing & increasing global macroeconomics, currency & geopolitical risks; silver historic role as money & a store of value; the declining & very small supply of silver; significant industrial demand & perhaps most importantly significant & increasing investment demand.

Interpretation:The current performance of the silver in the market is unpredictable; the market is moving rapid bullish so the future trend of market will be bearish because equity market is in upward but as compare to inflation rate the market will continue in the same order as before so the prediction of silver movement is quite difficult.

Silver Mini
Silver's unique properties make it a very useful 'Industrial Commodity', despite it being classed as a precious metal. Demand for silver is built on three main pillars; industrial uses, photography and Jewellery.

Last month performance of silver mini:-

Contract Expiry Date:- 30th April 2011

Contract Expiry Date:- 30th June2011

Contract Expiry Date:- 31st august 2011

Contract Expiry Date:- 30th Nov2011

Analysis of last month performance of silver Mini:As compare to silver main, silver mini has high volatility this is mainly because of its volume traded and market fluctuation factors they are as follows:-

 The Rapid hike in the silver price due to the some of more new silver consuming technologies would seek to substitute the metal with cheaper products. The unrest in the economy like continuous increasing the inflation rate, hike of oil price, commodity market boom also make upward movement of silver mini. The situation in Libya, it seems quite bad and we see the flow of funds into safe-haven investment because of it. So it automatically reflect in silver market. There are lot of scams happened in India like 2G scam, due this investor moved from equity market to commodity market. Silver is known as the 'healthy metal' and has many and increasing medical applications. Research is ongoing on the use of silver and its compounds for therapeutic uses and on its potential use as a disinfectant in hospitals and other medical facilities. The Supply/Demand dynamics for gold and silver are vastly different. The practical demand for silver relative to the supply of silver is much greater than that of gold. Unlike gold, silver is like oil - as it is consumed in these many industrial applications it is gone forever. Net government sales of silver rose to 44.8 Moz, primarily the result of increased sales from Russia, with China and India in the beginning of 2011. That gave a leverage to silver market.

Interpretation:The last month (Feb-March) silver mini shows a positive sign of growth with little volatility. Sudden shift of market from 53000 to 57000 during mid March gave new history in the bullion market that is 36 year hike in the silver market. So by considering the present silver market and future demand prospect we can say silver mini will continue in bullish trend for some more months.

A year performance of Silver Mini

The last year market performance of silver mini can be analyzed by studying performance chart of silver Mini

Contract Expiry Date:- 30th April 2011

Contract Expiry Date:- 30th June2011

Contract Expiry Date:- 31st August 2011

Contract Expiry Date:- 30th Nov 2011

Analysis of a year performance of silver Mini

There was a tremendous growth in the silver performance as compare to last year, at end of 2010 the silver price was Rs 43,000 but in March 2011 it was gone up to Rs 56500.this rapid increase of silver price is mainly due to following reason. There has been a marked increase in investment demand for silver in recent years. Some of the reasons why this trend is likely to continue are - the introduction of ETFs that track the price of silver, a new global liquidity bubble, the significant growth in the global money supply, the proliferation of millionaires, ultra high net worth individuals and billionaires, the proliferation of hedge funds and the exponential growth in derivatives. The Bank for International Settlements has estimated that the total value of derivatives contracts was $592 trillion at the end of 2009 (up exponentially from $260 trillion in June 2008). Thus, dwarfing the GDP of the entire world which was estimated at some $78 trillion at the end of 2010. Silver is a hedge against macroeconomics, systematic & inflationary risk with the attractive added potential for significant capital gains. Real asset allocation & prudent diversification would be an important reason to have an allocation to silver. Silver is highly correlated to the safe haven of gold & is in effect a leveraged sister of the precious white metal. Thus, informed investors use gold for wealth preservation & silver in order to make a return. Investors in silver bullion coins and bars are hedging themselves against further deflation and falls in property and equity markets. They are further protecting themselves against rising inflation, possible currency devaluations and still very prevalent geopolitical and macroeconomic risks such those posed by the humongous global derivatives market. According to the Silver Book, supply is expected to increase at a CAGR of around 2.4% over the next ten years, from more than 22,000t in 2009 to more than 28,500t in 2020, so keeping supply running well ahead of potential demand could be a very tall order."

Silver posted an average price of $20.19 in 2010, a level only surpassed in 1980, and a marked increase over the $14.67 average price in 2009. This buoyancy is very much alive

today, with the 2011 price averaging $31.86, based on the London fix, through the end of the first quarter. A significant boost in retail silver investment demand paved the way for higher investment in both physical bullion bars and in coins and medals in 2010. Physical bullion bars accounted for 55.6 Moz of the world investment total last year. Coins and medals fabrication rose by 28 percent to post a new record of 101.3 Moz. In the United States, over 34.6 million U.S. Silver Eagle coins were minted, smashing the previous record set in 2009 at almost 29 million. Other key silver bullion coins reaching milestones include the Australian Kookaburra, the Austrian Philharmoniker, and the Canadian Maple Leafall three posting record highs in 2010.

Interpretation:By analyzing the present trading contract performance, we can say silver market is in bullish but by comparing all contract each other we can understand that contract which has expiry date on November has high volatility that shows the future trend of silver will be unpredictable. Even though the present movement will continue for some more months but the end of year we can expect the price band of silver mini will be in Rs 55000 to 60000.