Copper and crude oil futures continued its upward movement on the week ended on Friday on a weak dollar and global firmness supported by local buying support.
Crude oil has risen 15% this month and set an all-time high of 103 a barrel, as a falling dollar prompted investments in commodities priced in the US currency. Still, a slowing US economy may cut demand in the world’s largest energy consumer, where crude stockpiles have risen for seven weeks.
Gold prices ruled firmer in line with foreign markets amid global price, touching an all time high of $968.75 an ounce. Silver also reached to a new high with strong investment demand. A weak US currency boosts demand for dollar-denominated raw materials such as gold because it makes them cheaper for buyers using stronger currencies. However, the increased demand eventually leads to higher prices.
The active April 2008 gold contract was up nearly 2% at Rs 12,355 per 10 gram. Total volume was 18,526 kg, up from 13,133 kg over the previous week. Total open interest was lower at 11,256 kg from the previous week’s 12,633 kg.
The price of gold rose to a record high point of $976.32 per ounce in morning trading on Friday, as the dollar struck fresh historic lows against the euro, traders said.
The April 2008 crude oil contract was quoted higher 3.5% to trade at Rs 4,044 per barrel. Total volume was higher at 12.88 lakh barrels from 8.70 lakh barrels, while total open interest was around 11.31 lakh barrels.
Crude oil for April delivery fell 1% to $101.55 a barrel in electronic trading on the New York Mercantile Exchange. The contract traded at $102.23 at 1:12 pm London time.
“The slowing of the US economy may start to slow down the oil market,” an analyst said.
The active April 2008 copper contract jumped up further and traded at Rs 338.35 per kg, up by nearly 4% over previous week. The volume was 12,411 tonne, up from 8,016 tonne. Open interest was 8,854 tonne, up from 5, 147 tonne.
The metal used for construction and electrical cabling has risen 27% since the start of the year, partly thanks to a weak dollar and investment money seeking high yields, amid concerns of global growth.