Energy, base metals and bullion futures prices on the national bourses continued to remain weak on the week ended on Friday, mainly on a weak overseas markets, amid lack of fresh buying interest by local players.
Among the major commodities, crude oil prices have lost more than 20% or $30 from their all time high levels. In the bullion segment, silver futures registered a biggest fall of 8.6% over the last week following the weakness in yellow metal.
Gold futures remained weak last week in the absence of fresh buying support from investors, as the dollar rebounded against the euro and comments by European Central Bank president Jean-Claude Trichet.
The crude oil August contracts were down by 5% to trade at Rs 4,950 per barrel on Friday over the previous week. Total volume was 21.29 lakh barrels, while open interest was 10.38 lakh barrels. Energy consumption in the US is also expected to fall further in coming days, which may lead to further fall in oil prices.
Fuel consumption in the US dropped 2.6% in the four weeks to August 1 from a year ago, according to Energy Department data. Declining demand in US and European countries is weighing on prices. “Crude oil prices are expected to find support at $110 a barrel. In the past we have seen oil prices are always susceptible to supply disruption news,” An analyst with Angel Broking said.
The copper August contracts were down 5% to trade at Rs 320.05 per kg on Friday over the previous week as LME inventories rose for straight nineteen days. The open interest was 11,517 tonne and volume was 23,917 tonne.
The gold October contracts were also down 4.7% to trade at Rs 11,903 per 10 gram over the previous week. Total volume was 22 tonne. Open interest was 13 tonne. In London, gold traded lower at $851 an ounce on Friday.
“It looks like the dollar will gain strongly against the euro in the coming months, amidst a slowing euro zone economy. In the coming days, gold prices are expected to fall to $800 an ounce,” an analyst said.
The silver September contracts were down 8.6% to trade at Rs 22,374 per kg over the previous week. Total volume was 625 tonne. Open interest was 335 tonne.
The European Commercial Bank will not increase interest rates due to a worsening economic outlook. This will weigh on the euro and will put pressure on gold and silver prices.