Bullion and metals futures on MCX platform fell across the board last week pressured by a credit squeeze across global financial markets triggered by defaults on mortgage payments by high-risk borrowers in the US.
Bullion futures on MCX fell by 1-3% last week while major metals futures dropped by nearly 9-10% on global liquidity concerns. Crude oil futures also down by nearly 4% and prices fell to a five-week low in New York on signs of declining US demand and concern tightening credit may spark an economic slowdown. Copper, nickel and zinc headed for a third straight week of declines in London on speculation that losses linked to US sub-prime mortgages will spread to commodities, curbing metal demand. The expiring August Lead contract was lower Rs 9% to trade at Rs 117.20 per kg.
?With the impact of sub-prime on the broader economy, many investors are likely to liquidate their positions to free up some of their funds,? Eugen Weinberg, an analyst with Commerzbank AG said. The active August nickel contract was down Rs 118 or 10% to trade at Rs 1,075 per kg. The active August copper contract was down Rs 10 a kg to trade at Rs 297.15 per kg.
LME copper was traded lower at $7,446 a tonne, down by $358. The active August Zinc contract was also down at Rs 135.30 per kg. The active September crude oil contract was lower at Rs 2,879 per barrel. The open interest was 2.94 lakh barrels. Gasoline demand slumped to a five-week low last week in the US, where a sub-prime borrowing rout has triggered concern that economic growth will slow, analyst said. The active October gold contract was down Rs 113 or 1.26% to trade at Rs 8,796 per 10 gram. London gold was traded $8 lower at $664 an ounce. Prices fell to a one week low of $659.50 on Thursday as investors rushed into the US dollar and US treasuries amid a growing global liquidity crunch linked to US sub-prime mortgage market woes, sources said.