Gold tumbles below $800, silver crashes & crude oil prices fall again

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Mumbai, Aug 17: All the major base metals, energy and bullion futures on the national bourses continued to rule weak on the week ended on Thursday, as futures and spot markets were closed on Friday on account of Independence Day.

In the overseas markets, gold plunged below $800 an ounce and quoted at $782.27, while silver dropped nearly 11% to trade at $12.90 an ounce over the last week level of $15.41, prompting more investors to unwind their positions against the dollar, while prices on the Indian bourse remained down by 3% and copper declined as the dollar's rebound reduced the appeal of commodities after a six-year boom. Crude oil prices fell on Friday on the prospect of reduced energy demand because Europe's main economies are shrinking.

The silver September contracts were down 2.9% to trade at Rs 21,587 per kg over the previous week. Total volume was 501 tonne. Open interest was 295 tonne. Crude oil August contracts recovered marginally to cross the psychological level of Rs 5,000 per barrel on Thursday over the previous week. Total volume was 8.45 lakh barrels, while open interest was 5.95 lakh barrels. Crude oil for September delivery dropped as much as $2.26 or 2% to $112.75 a barrel on the New York Mercantile Exchange, and traded at $113.10 at London on Friday morning.

“Crude oil is still overvalued on the basis of long-term correlation,” an analyst said.