MCX crude oil futures slumped in the last week ended on Friday, dropping to the lowest level in six weeks. Crude fell to less than $130 a barrel and was down 11% last week, the biggest decline since April 2005, on concern that an economic slowdown in the US and China will curb fuel use. Gold futures remained steady with limited buying support. The base metals pack has seen a bout of mixed sentiments in the last two weeks.
News over expected supply disruptions pushed metals like zinc and lead higher. However, this was just a matter of days and prices declined after confirmation of no cut in production of these metals.
The copper August contracts fell to Rs 347.15 per kg, down by 2.41% over previous week. The open interest was 9,616 tonne and volume was 12,243 tonne. Copper, aluminum and tin look bullish, while zinc, lead and nickel look bearish for the coming week.
The crude oil July contracts fell sharply by nearly 10% to trade at Rs 5,634 per barrel compared to previous week. Total volume was 21.81 lakh barrel while open interest was 11.94 lakh barrel. Poor consumer demand and recovering OPEC supply may finally be showing up in the numbers, setting the stage for an extended price retreat in crude oil. For this week, MCX August contract is expected to face resistance at Rs 5,950 and support is seen at Rs 5,330 per barrel on the lower side, an analyst said.
Crude oil prices have broken crucial support level of $135, after which we may see oil price sliding further, but prices are expected to fetch support at $120 a barrel, an analyst with Angel Commodities said.
The gold August contracts remained firm at Rs 13,240 per 10 gram, up by 61 per 10 gram over previous week. Total volume was 25,804 kg. Open Interest was 8,955 kg.
?We may test $1,000 an ounce in gold, with heightened inflationary pressures, rising fears of financial and geopolitical risk and the weak dollar. Silver prices are expected to follow gold prices in the near term,? an analyst with Angel Commodities said.
On the International front, spot gold is meeting with stiff resistance at $981/1003 an ounce levels, where as support is seen at $930 and then at $910 levels.
The silver September contracts were traded at Rs 25,767 per kg, down by Rs 18 over previous week. The open interest was 205 tonne and volume was 472 tonne.
The longer-term trend for gold remained bullish, as long as the dollar shows no signs of bottoming and investor demand keeps rising.