Over the week near-month gold futures lost by 3.44% whereas silver futures lost by 6.01%.
US data showed stronger than expected durable goods order during the week propping up the market sentiment but only slightly. Hurricane Irene created concerns about disruption of refinery production in the East Coast. Concerns about disruption of crude oil supply also came from Libya where last week rebels stormed against forces loyal to Gaddafi. While the disappearance of Gaddafi made the markets bearish about Brent crude as restoration of supplies seemed certain, lack of clarity about when exports from the region will resume kept the support levels.
Last week the Chicago Mercantile Exchange (CME) reduced margins on WTI crude futures by 4% which will be effective from the close of business from Monday (29th August). On a weekly basis in the energy complex WTI crude futures gained by 3.76% to close at $ 85.37 per barrel. Brent crude futures gained by 4.18% to close at $ 111.36 per barrel by the end of the week.
The Fed Chairman Ben Bernanke finally spoke on Friday but defied markets expectations of additional monetary stimulus by refraining to use any aggressive monetary tool to stimulate the economy. But his observation that there is no threat to the long term growth prospects of the US economy, provided the Congress got its act together, offered a ray of hope to the bruised markets. During times of economic uncertainty like this copper is a good metal to watch as copper is most sensitive to global macroeconomic prospects.
Last week copper futures rose on the anticipation of good growth prospects in the Asian economies and of course, the Fed announcing taking steps to support the economy. Though the Feds announcement was not in keeping with the markets expectation the calm assurance gave fillip to copper futures which rose by 3.54% over the week.
Reports of the hottest summer in Iowa and Illinois adversely affecting the yield prospects of corn and soyabean crops in the US put an upward bias on the benchmark global near-month corn and soyabean futures which gained by 5.17% and 3.51% on a weekly basis, with soyabean futures having touched a five-week high last week. The current tight supplies of good quality wheat and lack of rains in the wheat growing regions of the US which is further expected to squeeze the supplies caused a rally in wheat futures which registered a gain of 3.81% over the week.
Near-month soyabean futures lost marginally by 0.58% despite news of crop destruction in Madhya Pradesh which was later disputed by experts.
The demand for black pepper in the domestic spot market is reported to be steady but the market is anticipating demand with the upcoming festival season. Pepper futures for delivery in September gained by 2.68% during the week. Turmeric futures dropped by a sharp 7.69% last week as reports of huge stocks weighed on the market sentiment. Chana futures gained by 3.23% during the week despite reports of good arrivals in the spot market.
The author is senior economist, NCDEX. The views expressed are personal