PROJECT REPORT

ON

DETAILED STUDY OF COMMODITY MARKETS IN INDIA

BY

LALIT KUMAR KANDOI

1NH18MBA36

Submitted to

DEPARTMENT OF MANAGEMENT STUDIES

NEW HORIZON COLLEGE OF ENGINEERING,

OUTER RING ROAD, MARATHALLI,

BENGALURU

In partial fulfilment of the requirements for the award of the degree of

MASTER OF BUSINESS ADMINISTRATION

Under the guidance of

Prof. Sheshu

Assistant Professor

2018 - 2020

Date: 18th February 2020

Place: Bangalore

To Whomsover It May Concern

This is to certify that Lalit Kumar Kandoi has successfully completed his internship program at Gold Rush Entertainment Pvt Ltd from 23rd December 2019 to 18th February 2020. During the period of his internship he was found to be punctual, hardworking and a fast learner. He was trained in various aspects of Finance and Statutory Regulations in the event management industry.

We are very satisfied with his performance and diligence and wish him all the best in his future endeavors.

Regards

Abijith Rao General Manager Gold Rush Entertainment Pvt Ltd.

CERTIFICATE

This is to certify that Lalit Kumar Kandoi bearing USN 1NH18MBA36, is a bonafide student of Master of Business Administration course of the Institute 2018-20, autonomous program, affiliated to Visvesvaraya Technological University, Belgaum. The project report on “DETAILED STUDY OF COMMODITY MARKETS IN INDIA” is prepared by him under the guidance of Prof. Sheshu in partial fulfilment of requirements for the award of the degree of Master of Business Administration of Visvesvaraya Technological University, Belgaum Karnataka.

Signature of Internal Guide Signature of HOD Signature of Principal

Name of Examiners with affiliation Signature with Date 1. External Examiner

2. Internal Examiner

DECLARATION

I, Lalit Kumar Kandoi, hereby declare that the project report on “DETAILED STUDY OF COMMODITY MARKETS IN INDIA” with reference to “Gold Rush” prepared by me under the guidance of Prof. Sheshu, faculty of M.B.A Department, New Horizon College of Engineering.

I also declare that this project report is towards the partial fulfilment of the university regulations for the award of the degree of Master of Business Administration by Visvesvaraya Technological University, Belgaum.

I have undergone an industry project for a period of Eight weeks. I further declare that this report is based on the original study undertaken by me and has not been submitted for the award of a degree/diploma from any other University / Institution.

Signature of Student Place: Date:

ACKNOWLEDGEMENT

The successful completion of the project would not have been possible without the guidance and support of many people. I express my sincere gratitude to Abijith Hemanth Rao, General Manager, Gold Rush, Bengaluru), for allowing to do my project at Gold Rush.

I thank the staff of Gold Rush, Bengaluru for their support and guidance and helping me in completion of the report.

I am thankful to my internal guide Prof. Sheshu for his constant support and inspiration throughout the project and invaluable suggestions, guidance and also for providing valuable information.

Finally, I express my gratitude towards my parents and family for their continuous support during the study.

LALIT KUMAR KANDOI 1NH18MBA36

TABLE OF CONTENTS

SL. NUMBER CONTENTS PAGE NUMBERS

1 Executive Summary 1

2 Theoretical Background Of The Study 2-13

3 Industry Profile &Company Profile 14-26

4 Research Methodology 27-41

5 Data Analysis and Interpretation 42-53

Summary of Findings, Suggestions and 6 54-57 Conclusion

7 Bibliography 58-61

EXECUTIVE SUMMARY

Investing in Commodity market requires time, knowledge and constant monitoring of the market. For those who need and expert to help to manage their investment, portfolio management service comes as an answer.

In Current scenario no individual is interested in investing in only one avenue they are interested in investing in other avenues like Gold and Silver which is more trending from past few years.

The business in commodity market has never been an easy one. During with the limited choices in hand with the twin requirements of adequate safety and maximum returns is a task fraught with complexities.

To make the right decision about investing it is always better to make simultaneous usage of both fundamental and technical analysis. Fundamental analysis is basically getting an understanding of a company, the health of its business and its future prospects. Whereas, technical analysis is a security analysis methodology for forecasting the direction of prices through the study of past market data, primarily price and volume.

Given the unpredictable nature of the market it requires in-depth experience and strong research to make the right decision. In the end it is all about making the right move in the right directions at the right time.

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CHAPTER 1 INTRODUCTION

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CHAPTER 1 – Introduction Stock exchange:

Stock exchange is a place where buyers and sellers meet in order to do the business transactions i.e., buying and selling of stocks like shares, bonds, debt instruments, commodities, Forex etc. It is a unit which provides “trading” services for investors and stock brokers to trade securities. Stock exchange is an organized sector where the members of the stock market will meet to trade the stocks or securities. It does not only involve buying and selling activity it also involves the services of issuing and redemption of stocks and also the payment of income or dividends. If any member needs to purchase a particular company share then that company should be listed in the stock exchange or else they cannot be purchased in stock exchange. In present situation there is no physical transactions all activities are converted into electronic network which is more helpful in cost reduction and speedy transactions. Apart from this there is over the counter system where physical transaction will take place it usually done for derivatives and bonds. However the stock exchange has become a part of global market for stocks and securities. As earlier discussed in India there are mainly two stock exchanges they are Bombay and National stock exchanges. National stock exchange has more reputation and pride in the market.

COMMODITY MARKET

 Commodity

Commodity refers to the products which are traded in the approved commodity exchange market. But the products should be moveable from pone place to the other and that must be able to trade i.e., buying and selling. It is broadly divided into two main categories that is Hard (Non- Agricultural) and Soft (Agricultural) commodities here Hard commodities are typically Nonagricultural or natural resources (Gold, Silver, Copper, Natural Gas) and Soft Commodities are the agricultural commodities(Coffee, Corn, Wheat, Sugar).

 Commodity Market

Commodity market is a physical or virtual marketplace especially for purchasing, selling and trading raw or primary products. Presently there are more than 50 Commodity market assisting more than 100 commodity products all over the world. Here the traders use contract system for purchase or selling the products. Presently this sector is booming very rapidly with high 3 | P a g e

yielding rate of returns.

 Commodity Exchange

Commodity exchange is the entity or body corporate who issues licenses for the future trading and rules, regulations to be followed in commodity market and they are guaranteed regulating authority.

 Global commodity markets

Commodity trading has come into existence in order to support the continuous supply of agricultural crops. In Chicago the organized trading commodity was evolved in 1948. But the Rice tickets are the trace in roots of Japan there traders used to stock rice in warehouse for upcoming use, to raise cash depository holders sold receipts against stores rice. Then it slowly converted into commercial currency in Japan. Later it was extended to wheat but due to lack of warehouse facility, dealers and distributors it was not so popular in those period. By this spot price came into emergence where the farmers and the buyer meeting directly which established cash based transactions. After few years it was extended to coffee, cotton in New York. Then slowly it spread to Non-agricultural commodity and to others essential agricultural commodity.

 Indian Commodity Market

From 19th century commodity market exist in India. In 1875 Cotton was traded in commodity market then later it was extended to oilseed, raw jute, jute products etc. Before Independence there was no stress on the commodity market but after Independence in 1952 the Parliament passed the Forward Contracts Regulation Act, which was sanctioned and allowed commodities to trade all over the world. In this act government has abolished the non-registered companies and ordered to trade only in registered commodity market and direct cash settlements were also prohibited by Central government. But it includes three regulations

 The exchange forward should regulate on day to day basis.

 Forward market will work under the Central Government

 Only Central Government department of Ministry of Consumer Affairs, food and

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Public Distribution have the ultimate controlling power

Currently in India there are 25 organised and 3 National commodity exchanges. After three decades of futures forwards were allowed to transact in Indian commodity market through online commodity exchange. The Major Three Commodity Exchange in India

1. National commodity And derivatives exchange limited (NCDEX) Mumbai,

2. Multi commodity exchange of India limited (MCX)Mumbai

3. National multi-commodity exchange of India limited (NMCEIL) Ahmadabad.

Apart from this there are other regional commodity markets in India.

Players in commodity market

1. Speculators

2. Hedgers

3. Arbitragers

Gold

Gold is a natural resource available all over the world but not in abundant. In science it has atomic number 79 and symbolized as AU. It is highly Precious metal and is invested in coins, jewels, bars, certificates, accounts etc. It is attracted by all the human beings as source of prestigious thing or the source of investment to make maximum returns. In India gold has become very prestigious metal from the ancient days itself, it stands for its unique property and it is treated an asset and core wealth by the people According to the investors owning gold is very much safe because all over the globe gold is same there is no difference in production and people think it will help in difficult situation as there is high liquidity power. Investing in gold is safe because it doesn’t

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include the crop rotation fluctuation in the market. All over the world gold is accepted and traded as a commodity.

Uses of gold

 It can be source of investment

 It is treated as safe haven

 It is an asset diversifier

 It has high liquidity power

 It acts an insurance

Gold investment

This sector is booming from the past two decades. The investors will invest in this sector to protect themselves from the political, economical, inflation, social disaster. However it is subjected to risk in the market especially in futures contracts and derivatives. Even the government will invest in this product to secure from the inflation and gold has become more like currency rather than commodity.

 Investment sources

1. Gold Bars

Bars are available in various sizes and investing in bullion bars is a very traditional way. On the bars there will speciation about the type, purity, hallmark and total grams of the gold. Bullion bars will be in small quantity and the ingot bars will be in large quantity.

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2. Gold Coins

Gold coins are the most common source it is available from small quantity. In ancient days they were traded as the currencies. These coins are valued according to their quality along with the market supply and demand condition.

3. Gold Exchange –Traded Products(ETPs)

Gold exchange traded products includes exchange traded funds, closed end funds and exchange traded notes these are traded only major stock exchanges like New York, Mumbai, London, Paris.

 Closed end funds are first traded gold exchange traded products; here the shares on gold will issued by the government not by any company. The investors can buy and sell the product only in the registered stock exchanges.  Exchange traded notes determine its prices using the derivatives in the market. It is issued by the underwriting bank where there will be maturity date the underwriting bank promises to pay the amount replicated on index.  Exchange traded fund is an investment fund on stock exchanges they also traded in stocks and bonds.

4. Gold Certificates

These are the certificates issued in a paper form instead of issuing the original gold. But these certificates can be exchanged to the gold whenever the investor is needed. It is helpful to the investors in avoiding certain risk like theft, commissions, storage fees etc. There are two types of certificates they are allocated and unallocated in allocated they can be converted into gold but in unallocated it is not assured to convert for the equal exchange for metal mentioned in the certificates.

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5. Gold Accounts

There are various types of gold accounts available in commodity market, types of gold accounts depends on mediators between investor and the gold. The most important difference is whether the gold account based on the allocated or unallocated basis. Many banks offer gold accounts to trade gold in the market this help the investors to trade without purchasing physical goods by this they can cover the risk of transferring the gold.

6. Gold Mining companies

It is investing in share of the gold mining company who produce the gold and it does not involve in investing directly to gold. They are indirect investment on the gold, if gold price increases then automatically the share price of the companies will increases and even the dividend will be huge to the investors.

7. Derivatives

Derivatives includes futures, options, and forwards, they are traded in the stock exchanges and also they are traded on the over the counter. Here the investors will be able to make the contracts at present to trade in the future to cover the risk in the market.

3.3.2 Factors Affecting Gold Price

The major impacting the gold price can be summarized as under:

 Demand for the product

 Inflation rate

 Value of dollar

 Gold reserve

 Monetary policy

 Speculation in the market

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 Supply of the product

 Growth in demand for exchange traded paper backed products

WORLD’S LARGEST GOLD PRODUCING COUNTRIES Country Production (in metric tons) Chile 55 Brazil 75 Uzbekistan 93 South Africa 145 China 420 Australia 225 United States 227 Peru 150 Canada 120 Ghana 85 Mexico 100 Russia 220 Rest of the world 700

Gold Contract Specifications

 Gold

 Gold mini (M)

 Gold HNI (high net worth individual)

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SILVER

Silver is a natural resource available all over the world but not in abundant. In science it has atomic number 47 and symbolized as Ag. It has the uppermost electrical conductivity and highest thermal conductivity of metal. It was a medium of exchange in the ancient days and they are also used for jewels, religious articles and food vessels. It has history from past 700 B.C. and later in 1792 it was started as the currency between the nations until 1965 after that kit was stopped as the value of silver was increased. In present scenario silver has very huge demand and potential market; the investors are attracted towards the silver as source investment. Silver is used 95% for industrial application, decorative articles, photography, jewelry and silverware. Silver includes unique properties like its electrical conductivity, thermal conductivity and has the capability to bear extreme temperature range.

Investment Sources

Silver investment This sector is booming from the past two decades. The investors will invest in this sector to protect themselves from the political, economic, inflation, social disaster. However it is subjected to risk in the market especially in futures contracts and derivatives. Even the government will invest in this product to secure from the inflation and Silver has become more like currency rather than commodity.

 Investment sources

1. Silver Bars

Bars are available in various sizes and investing in bullion bars is a very traditional way. On the bars there will speciation about the type, purity, hallmark and total grams of the Silver. Bullion bars will be in small quantity and the ingot bars will be in large quantity. They are available in 1000 Oz troy (31 kg), 100 Oz troy (3.11 kg), 1 kilo

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grams bars (132.15 Oz troy).

2. Silver Coins

Silver coins are the most common source it is available from small quantity. In ancient days they were traded as the currencies. These coins are valued according to their quality along with the market supply and demand condition.

3. Silver Exchange –Traded Products(ETPs)

Silver exchange traded products includes exchange traded funds, closed end funds and exchange traded notes these are traded only major stock exchanges like New York, Mumbai, London, Paris.

 Closed end funds are first traded Silver exchange traded products; here the shares on Silver will issued by the government not by any company. The investors can buy and sell the product only in the registered stock exchanges.  Exchange traded notes determine its prices using the derivatives in the market. It is issued by the underwriting bank where there will be maturity date the underwriting bank promises to pay the amount replicated on index.  Exchange traded fund is an investment fund on stock exchanges they also traded in stocks and bonds.

4. Silver Certificates

These are the certificates issued in a paper form instead of issuing the original Silver. But these certificates can be exchanged to the Silver whenever the investor is needed. It is helpful to the investors in avoiding certain risk like theft, commissions, storage fees etc. There are two types of certificates they are allocated and unallocated in allocated they can be converted into Silver but in unallocated it is not assured to convert for the equal exchange for metal mentioned in the certificates.

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5. Derivatives

Derivatives includes futures, options, and forwards, they are traded in the stock exchanges and also they are traded on the over the counter. Here the investors will be able to make the contracts at present to trade in the future to cover the risk in the market. They are traded on the COMEX

(Commodity Exchange), NCDEX (National Commodity and Derivate Exchange) and CMC (Cantor Index).

FACTORS AFFECTING SILVER PRICE

 Bulky traders Or investors

 Short selling

 Business ,commercial and customer demand

 Hedge against financial stress

WORLD’S LARGEST SILVER PRODUCING COUNTRIES

Countries Production(in million)

United states 32.6 Russia 45 Poland 41.2 Peru 111.3 Mexico 162.2 China 117 Chile 37 Bolivia 39.7

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Australia 56.9 Argentina 24.1

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CHAPTER 2 INDUSTRY PROFILE AND COMPANY PROFILE

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Financial services industry is term used to describe organizations that deal with the management of money. Financial Services industry is also the term used to refer to the industry which provides services to the financial market.

The financial service industry is highly fragmented. This industry is sub divided into few different sectors, in recent scenario there is high growth in these sectors.

Industry Composition:

The financial services is mainly involved the businesses providing services mainly related to investment, banking, insurance, risk analysis, accounting, brokerage, real estate, and asset management.  Insurance firm offer insurance to the other investors in order to cover their risk.

 Banks their primary activity is to accept deposit and to lend loans, they can be commercial, private, national or regional or community level banks.  Brokerage firms act as mediators between consumers and sellers for a variety of financial assets or products such as debt, equity and other investment services.  Real Estate firms deliver services such as developing, operating, purchasing, selling, and handling real estate. The project falls to the stock market sector in finance Service industry.

History of Indian Stock Exchange – The origin – Pre Independence.

Indian stock market is one of the oldest stock market in Asia. It started merely in 18th century when the East India Company was trading loan securities. In the 1830s, dealing on corporate stocks and shares in Bank and Cotton presses took place in Bombay. There are only half dozen during 1840 and 1850 though the trading was broad. In mid- 1850the informal group of 22 brokers began trading in Town Hall of Bombay. This still exist in Mumbai. Later in1860 the brokers were increased to 60. At that point of time Share Mania was started in India then later 250brokers

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increased further. These informal stock brokers systematized themselves as “The Native Share and Stockbrokers Association” which was formally organized as the Bombay Stock Exchange in 1875. BSE was moved to the other building near the Town Hall in 1928, the area of land on which the BSE building now stands (at the intersection of Dalal Street, Bombay Samachar and Hammam Street in downtown Mumbai) was purchased, and a office block was built and occupied in 1930. The following is the list of some of the initial members of the exchange and who are still running their respective business.  Brijmohan Laxminarayan.

 Jamnadas Morarjee

 D.S.Probhudas & Company

 Champaklal Devidas (called Cifco Finance)

Post-independence to Present:

The Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the securities contracts (Regulation) Act, in the year 1956. Later in 1992 the most conclusive period took place in the history of the BSE. The scandal by BSE member named Harshad Mehta manipulated the market by using the loop holes in the market for this BSE calls for the intransigence. This was resulted in the formation of the National stock Exchange (NSE), which twisted an electronic marketplace. On November 4 1994 NSE started trading. By less than a year, NSE gross revenue exceeded the BSE. BSE quickly automated, but it never caught up with NSE spot market gross revenue. In the next 2 years the second strategic failure at BSE came. NSE boarded on the launch of equity derivatives trading. BSE reacted by political effort, with a welcoming SEBI chairman (D.R.Mehta) aimed at delaying equity derivatives trading. By roughly 5 years the BSE and D.R.Mehta flourished in delaying the onset of equity derivatives trading. But then again this trading, and the supplementary shift of the spot market to rolling settlement, did come along in 2000 and 2001 – assisted by another major scandal at BSE involving the President Mr.Anand Rathi. NSE scored nearly 100% market share

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in the runaway success of equity derivatives trading, thus entrusting BSE into clearly second place. Today, NSE has roughly 66% of equity spot turnover and roughly 100% of equity derivatives turnover.

Stock Market:

Stock market is a market where both unlisted and listed companies trading take place. It is different from the stock exchange as stock markets include the stock exchanges of the relevant country.

The stock market can be or the capital market can be divided into two segments.

 Primary market

 Secondary market

Primary market:

It is a market that issues new securities in the market. This new issues are done by the companies to raise the capital in the form of debt or equity. These markets are facilitated by underwriting groups, which consist of investment banks. This process is called as Initial Public Offering. The securities issued in this market are trade in secondary market.

Secondary market:

The secondary market is the place which provides liquidity to the investors in the primary market. If there was no medium to liquidate our position, today They would not invest in any instrument. The secondary market provides an efficient trading of those securities which are initially offered in the primary market.

Through the stock exchange trading is done in the secondary market; the stock exchange is the place where the shares are traded in an organized manner by the buyers and sellers.

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Current Scenario:

 Beside with India, the other who are participating in the race of investment between the developing economies are china, Singapore, Malaysia, Russia and Brazil. Most of them are competing for contracts from USA and Europe. Capital market is the Centre of arrangement that provides facilities for buying and selling of long term financial assertions. It is the market where transactions are made in long term securities such as stock and bonds. The participants of this market includes various financial institutions, mutual funds, agents, brokers and other leaders of long term debt and equity capital.  Stock market is evaluated BSEIT, BSEFMCG, BSEHC, TCH, BANKEX, BSECG, AUTO, METAL and OILGAS. After liberalization, BSE has become the indicator for economy growth its trend and its variations.  In 2011, it has been propounded that efficient market theory is really effective in real situation. It’s the form hypothesis has been the issues of research for all the researchers.  In 2013, the listings of corporate on various stock exchanges have emotional impact on the liquidity in the market. Risk in the stock market cannot be eliminated but that can be measured with the help of volatility and variability of preceding trends.  In 2015, the studies that stock marketplace is not that much strong that it can affect the real GDP growth of the country. Because only 2% of population in India is intricate with the stock market investment.

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About the Organisation

Gold Rush Entertainment Pvt Ltd is a disruptive marketing firm that specializes in Events, diverse domain expertise in the fields of advertising, events, sports, entertainment, marketing, consulting and research.

It specializes in Events & Intellectual Properties that are unique to the Indian Market while and provide 360 degree solutions in the below the line (BTL) activation and Digital Marketing space.

The brand focuses all its strategy on the Food and Beverage Industry. The company was incorporated in 2015 by Mr.Kiran Soans who is currently serving as the CEO of the Company.

The company is headquartered in Indiranagar, Bangalore, with its offices located in Dubai and the US. The company has been largely successful in establishing itself in the F&B Event and Marketing Industry.

About the Founder and CEO

Kiran Soans the founder of Gold Rush is a graduate of BHM from Christ University and post his graduation moved to Malaysia and worked for Tourism of Malaysia where he established various connections and then explored Australia where he met the judges of Masterchef Australia and came up with idea to set up an organization which would focus primarily on F&B and that is how he came back to India and with the funding from his Dad, he was able to set up the company.

World On A Plate

This is India’s Largest Gourmet Food Festival hosted across multiple cities every year. This has been the company’s most successful IP since its launch in 2016 and recently concluded its second edition of 2019 in Bangalore this June after finishing the first edition in Mumbai in January. The primary revenues for the company are from this one major event.

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From the financial perspective, the major source of revenue for the company from this event is from sponsorships. Nearly 60% of the revenues come from the brands that are focusing to increase awareness about their products or services, especially in the F&B space. Brands have leveraged hugely from these events, have come back every year due to the crowds and the social media presence of the brands.

The other source of revenue under this IP is the rent from the restaurants that take part in the event. Restaurants pay on an average of Rs.35000/- per stall for a period of two days. They are also charged a 20% commission on the overall sales over two days.

Tickets are also sold for various activities during the event. They do not form a major chunk of the revenues as most tickets are given away as complimentary to attract more crowd.

Corporate MasterChef

This is yet another flagship IP of the company. This focusses on 4 major cities which are Bangalore, Hyderabad, Delhi and Mumbai.

The aim of this IP is to improve work life balance among corporates in these cities. They target 25 corporates in each city. They go to individual corporates and conduct food masterclasses and then a competition among the employees of that corporate.

At the end of each city, all the individual corporate winners compete against each other to win the title of Corporate MasterChef of the City.

From the financial side, they follow a similar revenue model as WOAP. They rely on sponsorships from various brands that are targeting the corporates.

They usually have brands that promote healthy foods and lifestyle, like Philips that promotes its air fryers.

Brand Activations

The company does two types of brand activations. ATL i.e Above the Line Activations and BTL i.e Below the Line Activations.

ATL focuses on a very large audience through large scale promotions like World On a plate and corporate masterchef.

BTL is focused more on specific and a smaller target audience. The company currently has a very low revenue from below the line activations and is investing largely on this front as

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Adventure Sports

The company is among only a few companies that are licensed to host bungee jumping in the city. The company has an experienced and certified Bungee trainer.

They have successfully done this in Phoneix Market City, Bangalore Palace and a few select locations.

Apart from this the company also specializes in paint ball competition.

Surprisingly, the company’s CEO and the Head of Production are part of India’s National Paintball Team and have represented India in various competitions worldwide with the recent being last December in Thailand.

Vision Statement

A vision statement of a company is aimed at outlining the objectives and what it wants to achieve in the long run. It talks about where it wants to see itself.

The vision statement at Gold Rush is

 Adapt to trends and technologies to become the most disruptive agency in the space of Advertising, Marketing & Entertainment.  Aim at getting listed in the next 8 years as we see immense investment opportunities in the Media and Entertainment sector

Mission Statement

A mission statement highlights the short term objectives of an organization and supports in achieving the vision statement.

The mission statement at Gold Rush is

 Be an effective & result oriented agency for brands  Be profitable to our shareholders

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 Provide unforgettable experiences and entertainment to end consume

Product/Services Profile

The company does not deal with any physical product. It is a completely service oriented and service delivery firm.

As shown in the business vertical chart, the company’s major services are

 Intellectual Properties  Brand Activations  Digital and Social Media Marketing,  Talent Management  Mall Entertainment

Intellectual Properties are basically events that are owned and executed by Gold Rush. Here the company has the sole authority to host and execute these IPs. The company also has the authority to give any other party the permission to host or execute these events and in return get a consideration for the same.

Brand Activations are brand specific promotions that are done throughout the year based on the nature of the brand. This is done either at the client’s location or at a particular location targeted a particular audience.

Digital and Social Media Marketing is a new line of business that the company started recently looking at the growing social media. Today more than half of the country’s population is on social media and brands have recognized that social media presence is as much as important as doing physical brand promotions. The company has been able to acquire 2 clients since they introduced this concept and has constantly delivered on their client’s requirement.

Talent Management is also a new concept in the company’s verticals. Unlike the other talent management companies that cater to a wide range of celebrities, Gold Rush focusses only on celebrities that are associated with the Food and Beverage industry like Chefs, bloggers, influencers, home bakers, etc.

Mall Entertainment has been a very profitable venture for Gold Rush. They have successfully completed a number of Bungee Jumps in Phoenix Market City, Bangalore.

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Markets

The company’s major markets are currently the Eight Tier I cities that are Bangalore, Delhi, Hyderabad, Chennai, Mumbai, Pune and Kolkata. The company is planning to open its second office in the city of Mumbai to facilitate faster coordination for the events.

The target consumer for the company is the age group of 21 years to 45 years, who belong to the upper income level and live in the urban areas.

Today brands are spending a huge amount of money on Online as well as offline marketing.

For example the company’s IP WOAP is its most successful venture. They associate with brands that relate to the F&B industry like Philips, Wonderchef, Foodhall, Tefal and also alcohol brands like Teachers, Johnie Walker and Hoegaarden which see this as an opportunity to personally connect with the consumers. They reserve a sizeable chunk of their marketing budget specifically for events like this as they help them to display their new products and test them in a market which suits them well.

Also the non-Food and Beverage market is also equally important for the company. Their key client include VR and Phoneix, with whom they work regularly to come up with new innovations to make the mall experience fun for consumers as today malls have lost footfalls except for the ones that house entertainment like movie screens or host events. Shopping has moved online in big cities and is a key reason for the drop in footfalls in these malls. The cost of running a mall is huge and the footfall is the matrix for mall owners to rely upon when planning to expand or leasing out space on rentals and hence malls collaborate to set up events and draw in crowds.

Talent Management is a market that has a lot of potential. The company was successful in managing moto cyclist CS Santhosh who now represents India in various rallies across the world and recently took part in the most grueling rally, the Dakar Rally. They are also looking to tie with various other budding talents that they can help in connecting to the right brands and associations that can help them recognize their talents.

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Strengths Weakness

Identify gaps in the industry and Lack of finances to provide clinical solutions to elevate fund intellectual brand positioning through properties disruptive ideas and integrations

Inadequate liquidity & working capital that could lead to business Ability to ideate & execute larger opportunities than life concepts

Insufficient staff to execute projects Pioneer in many “first of its kind” concepts leading to first mover advantage

Relationships / Connects with renowned talent across the world

Expertise ranges from executing large concerts ,food & fashion festivals to brand activations and talent management

Amplify market reach organically through audience/community building

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Opportunities Threats

Entertainment Lack of sufficient Industry is at the funds could would nascent stage in India allow competitors to and has promising replicate concepts growth potential

Lack of agencies that Uncontrollable provide 360 degrees economic factors like BTL solutions that use demonetization and digital space to inflation amplify

No Intellectual Property in the Food space where brands can leverage through integrations

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Future Growth & Prospects of the Company

Since its incorporation, the company has been operating solely on its own funds and hence has not been able to expand as planned. Now the company has started exploring options to rise funds through venture capital funding in order to enable it to fulfil its growth objectives of becoming a pioneer in the F&B industry and the biggest name in the industry.

Under the able leadership of Kiran Soans, the CEO, the company has exponential potential of doing great. The company’s new verticals like mall entertainment, Digital marketing, talent management are key steps in order to help the company reach a word audience and increase revenues.

The digital marketing is a space which has seen the highest growth in the last couple of year and it is only now that there are specialized agencies that can help brands meet their requirements and leverage the brand in the right manner to reach the goals.

With plans to open up a new office in Mumbai, the growth looks eminent and will drive sales and acquisition of new customers.

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CHAPTER 3

RESEARCH METHODOLOGY

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Title of the Study

“DETAILED STUDY OF THE COMMODITY MARKET”

Need for the study:

Commodity markets are where raw or primary products are exchanged. Commodity market is of two types i.e., Hard (Non-Agricultural) and Soft (Agricultural) commodities here Hard commodities are typically Nonagricultural or natural resources (Gold, Silver, Copper, Natural Gas) and Soft Commodities are the agricultural commodities(Coffee, Corn, Wheat, Sugar). The problem faced by the participants in the market is to predict the price movement of the commodity and to take the right decision when to entry and exit the market to make a maximum profit. As Gold and Silver Commodities are more sensitive in the market, their price prediction is rigorous job. Thus, there is a need to study the present scenario of the performance of the non-agricultural commodities in Indian stock market.

Objective of the study:

 Primary Objective:

To study and analyze the commodity market of selected non-agricultural products i.e., Gold, Silver.

 Secondary Objectives:

To study the price volatility among commodity market of selected non-agricultural products i.e., Gold, Silver. To identify the co-relationship between Gold price and Silver price.

To identify the co-relationship between Gold price and Dollar exchange rate.

Scope of the study:

 Studying the commodity price movements in the market.

 Analysis of the relationship of gold and silver with the exchange rates.

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 Helps in buying and selling strategy by recognizing the trend reversals in an formerly stage.

 To help investors in decision making.

Statement of the problem:

 When investing for a long and a short term there may be differences in fundamental analysis and technical analysis. Because calculation of fundamental analysis in commodity market is difficult this depends upon the supply and demand for the resources. The highlight of the study is to appropriate use of technical analysis in order to facilitate the investors in decision making.

Methodology Adopted:

Research methodology stands a way to systematically resolve the research problem. It is a scientific way of studying how research is done scientifically approved by the researcher in reviewing research problem alongside with the reason behind study. It is essential for the researcher to distinguish not only the research methods and procedures but also the methodology.

 Sample size:

The sample consists of two commodities – all from MCX market, on the basis of the research objectives. This study is mainly based on the Gold and Silver prices in Indian commodity market.

 Data Collection

The research is purely based on secondary data.

Secondary Data

Secondary data was collected by referring to following sources:

1. Online publication.

2. BSE websites

3. Text books 29 | P a g e

4. Research Journals

 Study Period

The study includes a period of 5 years covering from 2015-2019.

 Source of Data

The main source of data is collected through websites of BSE, MCX to obtain the historical prices. Also the other relevant data required for the purpose of the study was gathered from the various websites, publications, magazines and reports prepared by research scholars.

 Statistical tools and indicators used:

Simple Moving Averages

Moving Average Convergence Divergence

Bollinger Band Width

Relative Strength Index

Correlation

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Literature Review:

1. “Commodity Prices, Growth, and the Natural Resource Curse”

- Paul Collier & Benedikt Goderis - August, 2007

The author speaks about the ‘resources curse’ in the countries, where natural resource abundant countries tend to grow slower than resource scarce countries .This resources cure predicts a negative effect on commodity sector growth. The growth of cross sectional regression in which typical progress over recent decades is regressed by the degree of resources availability with the selection by the measure of resources abundance with the selection of control variables but it is neglected the commodity prices. There is a possible absence of variable bias and it is consequently an essential to move from cross country to panel data evidence. Thus the approach given by Deaton and Miller, namely Vector autoregressive (VAR) models shows the optimistic results on short run effects by a consequent resources curse but there will be negative effect on long term as there will be a scarcity of resources. The long term effects is limited to the higher charge on nonagricultural commodities in this section the author discovers that the resources curse is avoided by countries with appropriate good institutions i.e. , a total investment and the exchange rate overvaluation in the market. For the analysis the data was collected by the seminal paper by Sach and Warner. The data was consisting of 58 commodities for sample. They calculated the total value of commodity exports and they find out the consequence of commodity exports prices to be higher for countries with more commodity exports. If the long run adverse effects are well-ordered then non- agricultural resources plenty has a positive effect on average cross country growth rates.

2. “Modeling Price Behavior and Convenience Yield in Indian Commodity Futures Markets” -Brajesh Kumar -September2011

The article is all about the commodity pricing behavior. The commodities considered in the analysis range from the agriculture commodities (soybean and corn), to industrial metals (Aluminum, copper and zinc), precious metals (gold and silver) and energy commodities (Brent Crude oil and natural gas). At the analysis India was importing more of precious metals, Indus trial metals and energy commodities. India is consuming 20-25% of total production in the gold 31 | P a g e

sector and also a dominant consumer of silver. India stands in second place consuming crude oil after

US. As there is heavy consumption the price volatility affects on the commodity market very quickly and the market is two sensitive.

3. “Keys to commodity trading”

-Rahul Oberoi - June 2013

In this article that the primary sector of an economy is concerned with the agricultural (soya oil , coffee , palm oil , pepper and cashew nuts )and the non-agricultural commodities are concerned with the (copper, zinc, nickel, lead ,aluminum , tin, gold, silver, crude oil , natural gas) . India is a major player in the commodity market. All the commodities are traded all over the world and the price depends on the supply and demand of the commodity. Keys of the commodities markets are availability of the resources and demand for the commodity market. The investors are advised to buy the commodity in bearish market and to sell in bullish market.

4. “An Empirical Investigation on the Commodities Futures Trading”

-George Skiadopoulos -June 2012

The author explains about the diversification of the investments where the investors are more concentrating on the alternative availability of the investing avenues. Here the commodities considered as booming sector which has been attracted by the investors. There are three elements that is how much of diversification benefit is gained because there is a problem in examine out of sample performance of the commodity and the transaction cost is higher. The second element is the returns on the commodities this is very difficult to forecast. The third element is the margin on the commodities; this will affect the commodity future trading. It is concluded that investing in the commodity market involves the high risk.

5. “Commodity Derivatives Market in India”

-Narender L Ahuja -November 2011

The authors view point is about the development \, regulation and the future prospectus

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of the commodity derivative market. Since 2002 there is positive affect on the Indian commodity market, because of following number of modern exchanges and liberalizing the policies in the derivative markets. The researcher examines how India pulled it off in such short time thus he says about the commodity market is having high potential in the future are popularly used in the Indian

commodity market. Thus there is high potential in the market in the future to the investors to make maximum profit from the market.

6. “Explains the Growth in Commodity Derivatives”

-Parantap Basu and William T. Gavin - February 2011

This article explains the massive increase in trading in commodity derivatives over the past decade. There is a growth in commodity production and there is need for derivatives to hedge risk by commercial producers and users of commodities. During the past decade, the commodity has become a strong avenue in portfolio management. The traditional equity investment is based on the assets such as real estate and commodities. The recent trend is the institutional investor’s use of commodity future to hedge against the stock market risk. Trading in different derivate market has led to rapid expansion in derivatives sector, this sector helps in maximizing yields in lower interest rate. Phenomenon growth was seen in organized exchange and Over the Counter trading. This growth is significant to note because the mortgage derivate are more risky.

7. The Vanishing of the Gold Basis and its implications for the international monetary system -Antal E. Fekete -July 2009

The difference among the cash price of gold and the nearby futures price in the same location is defined as the gold basis. The positive wave is called as Contango and the negative wave is called as the backwardation. In 1971 in Canada Winnipeg commodity exchange was started the trading of gold futures in US. In the agricultural commodity there is a specific cyclical crop year pattern, on this the prices are depended. In the starting phase there will be a positive wave

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and it goes to negative wave at end of the cycle. But in non-agricultural commodity market there is no specific cycle thus it is very much fluctuating in the market, it depends on the interest rate available in the market. If the market needs to be bloomed there should be explosion of the interest rates. If there is continuous negative wave in gold market then it would face the last stage however in present scenario gold has become a prestigious and precious metal in investing. If it happened then the mining companies would stop selling the gold against the dollar.

8. The commodity Futures modernisation Act of 2000

-Dean Kloner -December 2008

The commodity futures modernization act of 2000 was signed into law on December 21, 2000 comprises provision affecting the regulatory and guiding roles of the commodity futures trading commission (CFTC) and the Securities and Exchange Commission (SEC). The author explains about the act in this paper. Two of these changes are very much important to the commodities and derivatives dealings are external of the jurisdiction of CFTC. Also under certain circumstances the act permits trading of futures contracts based on single stocks and narrowly based stock indices. There is exclusion and certain banking products (deposits). The act is needed and a reasonably flexible standard for identifying those transactions is specified commodities. This act is all about that the commodities should not trade in OTC because it is illegal therefore it should be traded under the guidelines of the CFTC and SEC. As there are inventions such as electrical trading and the growth of derivatives payment system it should be used in full potential.

9. Structured Commodity Finance

-Willem Klaassens -September 2005

This deal with pragmatic risk take by the lender and this depends on the commodity ability to perform. Here the risk lies on the performance of the commodity, SCF is a refined commodity grounded financing techniques, specially designed for commodity manufacturers and trading firms doing business in the emerging markets. The SCF is more significant because it has the capability of delivering the maximum security for the parties in

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their transaction. The parties are the players in the market they are local produces, international and regional trading companies and financial institutions. The SCF safeguards all the players by analyzing the performance risk on the selected commodity in the market. In Asia the SFC is very important because the trade flows and commodity prices continue to rise local financial institutions often are incapable to take on the additional credit risks ,this effects on local commodity manufacturers and even multinational who are active in this market province often find themselves incapable to obtain financing . Thus SCF helps these players in the market to have security on their investment. SCF delivers the solutions to the investors in the field of trade value chain by combining the end to end risk along with the funding solutions.

10. Scarcity Effects on value: A quantitative Review of the Commodity Theory Literature

-Michael Lynn -July 2002

This article is based on the quantitative analysis where the author uses the author explains about scarcity effects on the value of the commodities. Author uses the commodity theory (Brock, 1968), deals with the commodity. In this theory, shortage enhances the desirability (value) of all that can be controlled remains useful to its possessed and is exchangeable from one person to other person. The article establishes commodity theory to the marketing implication of theory along with suggestion for the future research. This article involves the relationship between the commodity, value and unavailability (scarcity). It is suggested that insufficiency augmentation of value may sometime be overrated by concerns about valuing and appearing and shellfishes. The hypothesized concern approximately is not constantly powerful enough to overcome insufficiency enhancement of value. The dynamics of the completion between people’s wish for scare commodities and their wish to avoid greediness in order to maximize the value. Scarcity effects on value and price effects on perceived value provide some indicative support for the presence of this implicit economic theory.

11. Index Funds, Financialisation and commodity Futures Markets

-Scott H. Irwin -March 2010

The commodity futures market in the last decade has sold over only on the basis of long term commodity index funds. Almost $ 100 billion was funded in the index commodity futures

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market. The bubbles in commodity future prices were the results of index funds and the size of the index in normal functioning of market. Here bubble refers to the asset price that exceeds an assets fundamental value since present holders trust that they can sell it back the asset at greater price in the upcoming years. The bubbles have really occurred through any frequency in financial history. The problem with the bubbles usage is that great price swings sometimes occur naturally and in reaction to shifts in supply and demand and it rest upon discount (interest rate), significant suggestions for public follows from the decision that index funds were not a main driver of commodity price boom. Innovative limits on speculation are not grounded in deep-rooted empirical discovery and their lead to risk-shifting functions of these markets. Also, results of studies that examines for a bubble component in commodity futures prices as of unclear bubble in commodity futures price and even less clear whether one was caused by index funds.

12. The effects of economic News on Commodity Prices: Is Gold Just Another Commodity. -Shaun K. Roache and Marco Rossi -July 2009

The paper studies the event to examine which and in what way macro-economic declarations affect commodity prices. The ultimate consequences show that gold makes a unique between commodities with prices responding to particular scheduled notices in a manner consistent with gold’s old-style role as a safe-haven and stock of value. Whereas another commodities are cyclical in nature but the non-agriculture commodities are not cyclical in nature this lead to the increasingly financialised .It explains that commodities are not just another commodity. The commodity prices are more sensitive and they are influenced by the surprise elements in macro- economic news, pro- cyclical bias and also the effect of the US dollar controlling policies. These results are helpful for the investors which lead to their right decision. To decrease the uncertainly of the yield of gold transactions. Gold price are more sensitive to the bad news from the market rather than the good news because it effects on the investors’ minds to feel they are going to lose the money in the market. Thus these outcomes are significant for those trading in the commodity markets on a regular basis and long term market participants that take their decisions based on evidence on price fundamentals which are revealed in the release of macroeconomic declaration.

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13. An Empirical Analysis on the relationship between Gold and Silver with special reference to the National Level Commodity Exchanges, India. -P. Prakash and Dr.S. Sundararajan -August 2014

In this article the author explains about the connection among gold and silver over the 2001- 2013 periods, where this period involves an exact widespread range of economic conditions, political change and increased sophistication in assets markets generally. Gold and silver have historically been seen as close alternatives for one another, but both are precious metal with diversifying risk. Gold is more attractive than the silver as an investment avenue. The major factors affecting gold price demand and supply, inflation, value of dollar, gold reserves. The traders must not arrive when the market will have high volatility conditions. It is proved that the best alternative source of investment is gold if the investors are ready to take the risk. Investing in gold and silver has high risk but matching to returns both brings the high returns. The investors should not buy

the commodity all at a once because the price changes every second, thus the investors should buy in small quantities to buy more when it goes down. If the investor is interest in short term gains it is advisable to for Gold Avenue and the silver as a commodity has positive impact on the gold market.

14. A Study on Commodity Derivatives Market of selected Nom Agricultural Products (Gold, Silver, Copper, Oil) -Mr.P.Periasamy -February 2014

The author has selected the technical tools like RSI, EMA, ROC, MACD and SMA in order to analyze the non-agricultural commodity market. In gold SAM shows period, the commodity market is more volatile and only assumption of price movement can be given and it is not possible to provide the exact future price movement about the companies. The investor should wait up to the end of the bear market to make their investment strategy. The buying decision should be made only when there is positive sign after the bear market. From the last three years price movements of each commodity explains that investors are satisfied from the returns from investment in commodities. An investor can be successes only when they are able to select the right commodities at the right time.

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15. An Analysis of Gold Price Variation and its impact on Commodity Market in India.

-Dr.Bimal Jaiswal -July 2015

In India commodity is main basis for economy because more than 70% of the total population is engaged in primary sector directly or indirectly. The financial returns are concerned, that this sector for the good returns comparatively to the others. In India the gold is considered the most feasible element of investment. In the times of inflation also it has provide to be most accessible to the investors, It has proved to be most accessible to the investors .It has been a pillar of tangible, storable and transportable wealth .In commodity market, gold has its unique relevance. But the fluctuations in its prices make a weird situation in one market. In this it deals with various aspects attached to gold like its relevance, reasons for price fluctuation and impact on India economy in the times of global crisis. Participating in gold is possibly a way to maintain purchasing power. The purchasing power of gold increases as the real market price of gold increases and decreases. Gold is like a safe haven for investors especially at the wave of the global financial inflation. This

lead to an emerging trend where traders and investors set aside substantial amounts of their funds into the gold portfolio.

Tools Used for Analysis

3.4.4 Fundamental analysis:

To earn dividends and ultimately sell it at a higher price, is the basic purpose of buying a security. An investor therefore is interested in obtaining estimates of future prices of the share. These in turn will depend upon the performance of the industry to which the company belongs and the general economic situation of the country. The multitude of factors affecting a company’s profitability can be broadly classified as:

1. Economic wide factors: these include the factors which affects the profitability of the company like growth rate of the economy, the rate of inflation, foreign exchange rates etc. 2. Industry wide factors: these include the factors which are specific to industry to which the company belongs. For instance the changes in government policies towards industry affects the company belonging to an industry. 38 | P a g e

3. Companywide factor: The firm specific factors like plant and machinery, the brand image of the product, and ability of the management to effect the profitability. Fundamental analysis considers the financial and economic data that may influence the viability of a company. Fundamental analysis is essential to most investors.

It is the study of all from the overall economy and industry conditions, to the financial situation and management of particular companies (i.e., using real data to evaluate a stock’s value). The process utilizes items such as revenues, earnings, return on equity and profit margins to define a company’s underlying value and potential for future growth.

An investor even before taking the investment decision will therefore be interested in analyzing the influence of the expected performance of the company, industry and economy as a whole on share prices, such analysis is called fundamental analysis.

3.4.5 Technical analysis:

The study of market action through the use of charts for the purpose of forecasting future price trends. The analysis makes use of past prices and volume information in order to make trading decision. In spite of all the fancy and exotic tools it employs technical analysis which fairly studies supply and demand in a market in an effort to determine what track, or trend, will continue in the future. With the proper technical analysis one can be ready for certain moves and by the actual start of the move when the analysis is confirmed trading positions can be taken.

1. Simple Moving averages:

Simple Moving Averages (SMA) is one of the most common methods used to calculate the moving average of the stock prices. It is the sum of all historical closing prices over the time and divisions the overall sum result by the total number of time periods. It is used to show the average price fluctuations of a stock over a period of time. Simple Moving Averages are used to highlight the trend direction and to smooth out the price and volume fluctuations of a stock for better interpretations. Here SMA is calculated on monthly basis on five years. This was helpful to find the long term trend in the commodity market. 39 | P a g e

Moving average (n) = Closing Price 1+ Closing Price 2+ Closing Price 3+…. Closing Price n

No. of time period (n)

2. Moving Average Convergence Divergence:

Moving Average Convergence Divergence (MACD) is a popular technical tool used in technical analysis. It helps to measure the convergence and divergence (Deviation) between two Exponential moving averages. A long term moving average and short term moving average are calculated by using the closing price of the stock. A 1 month and 26 month exponential moving average constitute a popular combination. The difference between12 exponential moving average 26 exponential moving average represents MACD. The MACD results may be negative, positive or zero. If MACD line is in negative then it bearish signal and if the MACD is moving to positive then it is bullish trend in the market to a particular commodity.

3. Relative Strength Index:

J. Welles Wilder Jr. illustrated the Relative Strength Index (RSI). The Relative Strength Index is one of a group of technical indicators called as momentum oscillators. Momentum is the rate of the increase or fall in price. The magnitude and velocity of directional price moves are measured by Relative Strength Index and it also represents the data graphically by oscillating between 0 and 100. By using the average gains and average losses of an commodity over a specified time period the indicator is calculated. The Relative Strength Index is most classically used on a 14 day

timeframe, measured on a scale from 0 to 100, with high and low levels marked at 70 and 30. Shorter or longer time frames are used for alternately smaller or lengthier outlooks. More extreme high and low levels 80 and 20occur less frequently but indicate stronger momentum.

RSI=100-100

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1+Relative Strength (RS) RS=Average Gain/Average Loss

4. Correlation:

Correlation is a degree of relationship between any two or more quantities (variables) in which they vary together over a period and which ranges between -1 and +1. If the correlation coefficient is +1 then it is perfect positive correlation i.e., if one security travels, either up or down, the other security will travel in the similar direction. The other side if the correlation coefficient is -1 then it is perfect negative correlation i.e., if one security travels, either up or down, the other security will travel in the opposite direction. And when the movements of the commodities are said to have no correlation then the coefficient correlation is 0 and they are completely random. There are many types of correlation used to measure the degree of correlation. The most common of these is the Pearson correlation coefficient, which is sensitive to only a linear relationship between two variables. Bivariate normal distribution

If a twosome (X, Y) of random variables follows a bivariate normal distribution, the conditional mean E(X/Y) is a linear function of Y and the conditional mean E(X/Y) is a linear function of X. The correlation coefficient r between X and Y, along with the marginal means and variances of X and Y, determines this linear relationship. E (Y│X) =E ( Y ) + r σ y X – E ( X )

σ x

Where E(X) and E(Y) are the expected values of X and Y, respectively and σ x and σ y are the standard deviation of X and Y, respectively.

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CHAPTER 4

DATA ANALYSIS AND INTERPRETATION

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GOLD

4.1: SIMPLE MOVING AVERAGES

Date Price SMA

Jan-18 1,401.70 5

Feb-18 1,380.80

Mar-18 1,384.90

Apr-18 1,377.80

May-18 1,355.90 1,380.22

Jun-18 1,303.90 1,360.66

Jul-18 1,270.10 1,338.52

Aug-18 1,241.10 1,309.76

Sep-18 1,231.30 1,280.46

Oct-18 1,250.80 1,259.44

Nov-18 1,256.50 1,249.96

Dec-18 1,312.50 1,258.44

Jan-19 1,350.00 1,280.22

Feb-19 1,341.00 1,302.16

Mar-19 1,316.50 1,315.30

Apr-19 1,303.60 1,324.72

May-19 1,322.60 1,326.74

Jun-19 1,425.10 1,341.76

Jul-19 1,437.80 1,361.12

Aug-19 1,535.70 1,404.96

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Sep-19 1,479.60 1,440.16

Oct-19 1,521.80 1,480.00

Nov-19 1,472.70 1,489.52

Dec-19 1,523.10 1,506.58

SMA 1,800.00 1,600.00 1,400.00 1,200.00 1,000.00 800.00 600.00 400.00 200.00 0.00

Price SMA

The SMA is plotted using last 2 years data of gold. Here 2 months moving average has been taken to construct the Simple Moving Averages. The 2 years chart of Simple Moving Averages shows that on many occasions monthly moving average line cuts the 2 months Simple Moving Averages line from top to bottom which signals bearish market and it is right time to go out of the market and some time the monthly moving average line cuts the 2 months Simple Moving Averages line from bottom to top which signals bullish market and it is right time to invest in the market.

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TABLE 4.7: RELATIVE STRENGTH INDEX (RSI)

Average Average Upward Downward Relative Date Price Change Upward Downward RSI Movement Movement Strength Movement Movement

Jan-18 1,401.70 5 5

Feb-18 1,380.80 -20.90 0 20.9

Mar-18 1,384.90 4.10 4.1 0

Apr-18 1,377.80 -7.10 0 7.1

May-18 1,355.90 -21.90 0 21.9

Jun-18 1,303.90 -52.00 0 52 0.820 20.380 0.040 3.868

Jul-18 1,270.10 -33.80 0 33.8 0.656 23.064 0.028 2.766

Aug-18 1,241.10 -29.00 0 29 0.525 24.251 0.022 2.118

Sep-18 1,231.30 -9.80 0 9.8 0.420 21.361 0.020 1.928

Oct-18 1,250.80 19.50 19.5 0 4.236 17.089 0.248 19.864

Nov-18 1,256.50 5.70 5.7 0 4.529 13.671 0.331 24.883

Dec-18 1,312.50 56.00 56 0 14.823 10.937 1.355 57.543

Jan-19 1,350.00 37.50 37.5 0 19.358 8.749 2.213 68.872

Feb-19 1,341.00 -9.00 0 9 15.487 8.800 1.760 63.767

Mar-19 1,316.50 -24.50 0 24.5 12.389 11.940 1.038 50.924

Apr-19 1,303.60 -12.90 0 12.9 9.911 12.132 0.817 44.964

May-19 1,322.60 19.00 19 0 11.729 9.705 1.209 54.721

Jun-19 1,425.10 102.50 102.5 0 29.883 7.764 3.849 79.376

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Jul-19 1,437.80 12.70 12.7 0 26.447 6.211 4.258 80.980

Aug-19 1,535.70 97.90 97.9 0 40.737 4.969 8.198 89.128

Sep-19 1,479.60 -56.10 0 56.1 32.590 15.195 2.145 68.201

Oct-19 1,521.80 42.20 42.2 0 34.512 12.156 2.839 73.952

Nov-19 1,472.70 -49.10 0 49.1 27.610 19.545 1.413 58.551

Dec-19 1,523.10 50.40 50.4 0 32.168 15.636 2.057 67.291

GRAPH 4.8: RELATIVE STRENGTH INDEX (RSI)

RSI

100.000 90.000 80.000 70.000 60.000 50.000 40.000 30.000 20.000 10.000 0.000

RSI

Interpretation:

The RSI graph shows the overbought and oversold areas. The RSI values from 30 and below indicates a good opportunity to buy the commodity and the RSI values from 70 and above indicates a good opportunity to sell the commodity.

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SILVER

TABLE 4.11: SIMPLE MOVING AVERAGES

Date Price SMA

Jan-18 17.204 5

Feb-18 16.324

Mar-18 16.223

Apr-18 16.312

May-18 16.402 16.49

Jun-18 16.104 16.27

Jul-18 15.5 16.11

Aug-18 14.438 15.75

Sep-18 14.623 15.41

Oct-18 14.229 14.98

Nov-18 14.094 14.58

Dec-18 15.433 14.56

Jan-19 16.022 14.88

Feb-19 15.538 15.06

Mar-19 15.295 15.28

Apr-19 15.069 15.47

May-19 14.756 15.34

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Jun-19 15.447 15.22

Jul-19 16.533 15.42

Aug-19 18.467 16.05

Sep-19 17.13 16.47

Oct-19 18.22 17.16

Nov-19 17.106 17.49

Dec-19 17.921 17.77

GRAPH 4.12: SIMPLE MOVING AVERAGES (SMA)

Silver SMA 19

18

17

16

15

14

13

12

11

10

Jul-18 Jul-19

Jan-18 Jan-19

Jun-18 Jun-19

Oct-18 Oct-19

Apr-18 Apr-19

Feb-19 Feb-18 Sep-18 Sep-19

Dec-18 Dec-19

Aug-18 Aug-19

Nov-18 Nov-19

Mar-18 Mar-19

May-18 May-19

Price SMA

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Interpretation:

The SMA is plotted using last 2 years data of Silver. Here 5 months moving average has been taken to construct the Simple Moving Averages. The 2 years chart of Simple Moving Averages shows that on many occasions monthly moving average line cuts the 5 months Simple Moving Averages line from top to bottom which signals bearish market and it is right time to go out of the market and some time the monthly moving average line cuts the 5 months Simple Moving Averages line from bottom to top which signals bullish market and it is right time to invest in the market

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TABLE 4.17: RELATIVE STRENGTH INDEX (RSI)

Average Average Date Price Upward Downward Upward Downward Relative Change Movement Movement Movement Movement Strength RSI

Jan-18 17.204 5 5

Feb-18 16.324 -0.88 0 0.88

Mar-18 16.223 -0.10 0 0.101

Apr-18 16.312 0.09 0.089 0

May-18 16.402 0.09 0.09 0

Jun-18 16.104 -0.30 0 0.298 0.0358 0.2558 0.139953 12.27709

Jul-18 15.5 -0.60 0 0.604 0.02864 0.32544 0.088004 8.088568

Aug-18 14.438 -1.06 0 1.062 0.022912 0.472752 0.048465 4.622486

Sep-18 14.623 0.18 0.185 0 0.05533 0.378202 0.146297 12.76254

Oct-18 14.229 -0.39 0 0.394 0.044264 0.381361 0.116068 10.39969

Nov-18 14.094 -0.14 0 0.135 0.035411 0.332089 0.106631 9.635632

Dec-18 15.433 1.34 1.339 0 0.296129 0.265671 1.114644 52.71071

Jan-19 16.022 0.59 0.589 0 0.354703 0.212537 1.6689 62.53138

Feb-19 15.538 -0.48 0 0.484 0.283762 0.26683 1.063459 51.53769

Mar-19 15.295 -0.24 0 0.243 0.22701 0.262064 0.86624 46.41631

Apr-19 15.069 -0.23 0 0.226 0.181608 0.254851 0.712605 41.6094

May-19 14.756 -0.31 0 0.313 0.145286 0.266481 0.545204 35.28362

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Jun-19 15.447 0.69 0.691 0 0.254429 0.213185 1.193468 54.4101

Jul-19 16.533 1.09 1.086 0 0.420743 0.170548 2.467013 71.15672

Aug-19 18.467 1.93 1.934 0 0.723395 0.136438 5.301997 84.13201

Sep-19 17.13 -1.34 0 1.337 0.578716 0.376551 1.536887 60.58161

Oct-19 18.22 1.09 1.09 0 0.680973 0.30124 2.260562 69.33044

Nov-19 17.106 -1.11 0 1.114 0.544778 0.463792 1.174616 54.01488

Dec-19 17.921 0.81 0.815 0 0.598822 0.371034 1.613929 61.74342

GRAPH 4.18: RELATIVE STRENGTH INDEX (RSI)

RSI 90

80

70

60

50

40

30

20

10

0

RSI

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Interpretation:

The RSI graph shows the overbought and oversold areas. The RSI values from 30 and below indicates a good opportunity to buy the commodity and the RSI values from 70 and above indicates a good opportunity to sell the commodity. But as it is clear in above graph in the year there is no signal to buy or to sell thus it is recommended to hold the commodity still for a long term.

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TABLE 4.21: CORRELATION BETWEEN GOLD AND SILVER

H0: There is no significant relationship between gold price and silver price.

H1: There is significant relationship between gold price and Silver price.

Correlations

Gold Silver

Pearson Gold 1 0.91883586 Correlation

N 24 24

Pearson Silver 0.91883586 1 Correlation

N 24 24

Interpretation:

From the above table it is found that the correlation value is 0.918 that is above 0.05. So, it is significant, hence accept alternative hypothesis (H1) and reject null hypothesis (H0).

Inference:

As the correlation value is 0.918 it indicates that there is much relationship between the gold price and silver prices.

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CHAPTER 5

SUMMARY OF FINDINGS, SUGGESTIONS AND CONCLUSION

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CHAPTER 5

SUMMARY OF FINDINGS SUGGESTIONS AND CONCLUSION

Findings:

Analyzing the commodity market helped to find out the gold price and silver price volatility. Technical analysis was more helpful in decision making about the commodity market and reduced the errors in forecasting. The various tools in technical analysis were complicated but it has given the realistic results. The overall performance of gold and silver indicates the low returns for short term investment and the high returns for long term investments. SMA shows the price fluctuations in the market. Both gold and silver price are too sensitive in the market. According to Relative Strength Index when it is above 70 it is advised to sell the commodity and if it is below 30 it is usually recommended to buy the commodity. By using the correlation tool it was possible to find out the relationship between the gold price and silver price.

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Suggestions:

Gold and Silver are precious metal their value cannot not be diminished in a shorter time. But even then there are some investment rules:

 Before investing, an investor should have clear and adequate knowledge of stock market so that they can maximum returns.  The commodities i.e., gold and silver are very complex financial instruments. Thus the traders must analyze the trend of the market.  Investing for short term gains in current scenario will not be helpful as both commodity markets are in bearish market, the investor can go for long term investment to maximize the returns.  The traders should not enter into the market in bullish period they need to wait till the bearish market ends and then they need to invest when market gives positive signal to buy the commodity.  Investors should not buy in bulk volume because of high price fluctuations. If the investors invest in one shot then they cannot buy when the prices goes down. So it is advisable to buy in small quantities.

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Conclusion:

During this project I was exposed to the commodity market by which I got real time experience in this field and by this I would like to conclude my project by below points:

 The last two years price movements of gold and silver explains the investors are satisfied from the reasonable returns from commodity market.  Investors can make substantial returns only if investments are made in disciplined manner. The blind investments have always let to many blunders, an investor should always analyze the market by using the analytical tools for investments purpose.  Investors can succeed in their investment only when they are able to select the right commodity at right time. The investors should closely watch the situation like market price, economy, returns and risk associated with the commodity before taking the decision to invest.  Thus by utilizing the investment opportunities available in the commodity market will help in maximizing the returns.  I would like to conclude that in the commodity market there is high possibility of getting good returns and I would like to suggest to investors to invest in gold.

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BIBLIOGRAPHY

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BIBLOGRAPHY

ARTICLES:

1. Paul Collier and Benedikt Goderis (2007), “Commodity Prices, Growth, and the Natural Resource Curse” University of Oxford Vol 13, No.33.

2. Brajesh Kumar (2011), “Modeling Price Behavior and Convenience Yield in Indian Commodity Futures Markets” International Journal of Scientific Research, Vol:4.

3. Rahul Oberoi (2013), “Keys to commodity trading” Applied Financial Economics Vol:14.

4. George Skiadopoulos (2012), “An Empirical Investigation on the Commodities Futures Trading” International Journal of Management and Business Studies, Vol:1.

5. Parantap Basu and William T. Gavin (2011), “Explains the Growth in Commodity Derivatives” International Finance Journal, Vol:4.

6. Dean Kloner (2008), “The commodity Futures modernisation Act of 2000” Securities Regulation Journal, Vol:8.

7. Willem Klaassens (2005), “Structured Commodity Finance” Asian Trade Finance Year book 200.

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8. Michael Lynn (2002), “Scarcity Effects on value: A quantitative Review of the Commodity Theory Literature” Scholarly Commons Education article:179.

9. Scott H. Irwin (2010), “Index Funds, Financialisation and commodity Futures Markets” Applied Economics, Vol.31.

10. Shaun K. Roache and Marco Rossi (2009), “The effects of economic News on Commodity Prices: Is Gold Just Another Commodity” International Monetary Fund, Vol.140.

11. P. Prakash and Dr.S. Sundararajan (2014), “An Empirical Analysis on the relationship between Gold and Silver with special reference to the National Level Commodity Exchanges, India” International Journal on Recent and Innovation Trends in Computing and Communication, Vol,2.

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 http://www.goldpriceindia.com/gold-price-january-2015.php

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 http://www.fao.org/docrep/012/i1545e/i1545e00.pdf

 http://www.rba.gov.au/publications/bulletin/2011/jun/pdf/bu-0611-7.pdf

 http://www.oecd.org/trade/agricultural-trade/45534528.pdf

 http://www.sciencedirect.com/science/article/pii/S0970389615000154

 http://www.iosrjournals.org/iosr-jef/papers/vol2-issue6/G0263844.pdf

 http://www.investopedia.com/terms/r/rsi.asp?layout=infini&v=4C&adtest=4C

 http://www.investopedia.com/articles/technical/052201.asp

 http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:movingaver ages

 http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:correlation_ coeffici

 http://www.investing.com/tools/correlation-calculator

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