Copper slips, crude oil steady, gold gets harder

Written by Commodities Bureau | Mumbai | Updated: Dec 16 2008, 04:07am hrs
The domestic futures markets finished with mixed trends on the week ended on Friday, with gold prices in London bouncing back last week, as the rise in crude oil prices and the sharp fall in the dollar against major currencies supported the yellow metal. Base metals futures took cues from the currency and equity markets but the overall fundamental picture remained bearish last week.

Gold prices overseas touched a high of $834.50 per ounce on Thursday before falling on account of profit booking by traders at higher levels. Gold February 2009 contracts were higher by 2.7% to settle at Rs 12,688 per 10 gram over the previous week. An analyst with Angel Broking said gold has been moving completely in tandem with the currency markets, tracking its movements very closely. Spot gold continued to meet with a stiff wall of resistance between $830-$840 levels.

Silver March 2009 contracts were higher by 1.80% to trade at Rs 16,961 per kg over the previous week. Silver prices corrected to trade near $10.14 an ounce and remain in the ranges of $10 $10.40 levels.

Crude oil December contracts were down marginally to finish at Rs 2,201 per barrel on Friday over the previous week. Crude oil prices touched a weekly high $49 per barrel. The dollar fell sharply against its counterparts, as a surge in initial claims and other negative US economic data put the greenback under heavy selling pressure.

Weakness in the dollar typically boosts dollar denominated commodities like crude oil. Prices were also supported by a statement by Saudi oil minister Ali al-Naimi who said that they supplied 8.49 million barrels a day in November, less than estimated and in line with its Opec target.

With the weakening of demand from China, the base metals market is affected the most. Copper February 2009 contracts were lower by 5% to settle at Rs 157.50 per kg over the previous week. Copper prices are highly volatile and could trade below its marginal cost of production.