Copper slumps 12%, crude oil drops 18%

Written by Commodities Bureau | Mumbai | Updated: Dec 9 2008, 05:18am hrs
Copper and crude oil futures prices on the national commodity bourses continued to rule weak over the week ended on Friday on persistent worries over the recession and its negative impact on global crude oil demand.

Crude oil futures prices continued its slide last week on weak global demand. Crude oil prices were traded below the $45 a barrel mark, as prices followed movements in equity markets.

Base metals futures fell sharply over the last week as the financial market mood continued to remain weak on concerns that the world economies are sinking into an intensifying recession.

The movement in gold prices was driven primarily by the dollar direction. Gold December contracts lost 4.74% over the previous week and settled at Rs 12,996 per 10 gram over the previous week.

After falling sharply from $820 levels, spot gold prices have traded in the $761-$788 band. Gold prices have a crucial resistance at $830, only closing above that will lead to a further upside in prices, an analyst with Angel Broking said.

Silver December contracts were lower by 5% to settle at Rs 16,186 per 10 gram over the previous week. Currency and crude oil should continue to play an important role in impacting bullion prices in the coming days.

Central banks around the world are cutting interest rates to improve liquidity, but these measures take time to filter through into the wilder economy and therefore will have little impact on the short-term bearish fundamentals of crude oil.

The current crisis is expected to continue well into 2009, as much the developed world is expected to remain in a recession.

Crude oil December contracts prices dipped by 18% to trade at Rs 2,222 per barrel on Friday over the previous week. A slowdown in the global economy has dented the demand for energy products.

The deteriorating global economic outlook is likely to put energy prices under pressure in the short term.

Crude oil prices can trade in the range of $38 and $57 a barrel for this week, an expert said.

Copper February 2009 contracts were lower by 12% to settle at Rs 165.80 per kg over the previous week.

Copper inventories continued to rise steadily and this situation indicated that the demand is weak.

The metal has breached its important support of $3,370 a tonne on LME.