Crude weakens on worsening slump, gold above Rs 13,000-mark

Written by Commodities Bureau | Mumbai | Updated: Dec 30 2008, 04:41am hrs
Crude oil and copper futures prices on the national exchanges continued to rule lower on the week ended on Friday mainly due to worsening economic slowdown and sharply falling global energy demand. However, international crude oil prices rebounded on Friday after the United Arab Emirates (UAE) announced plans to reduce oil production as part of an output cut by the Organization of Petroleum Exporting Countries (Opec).

On the other hand, gold futures remained firm during the week on the back of the firm Asian markets while silver futures reported marginal loss during the week on lack of fresh industrial demand.

MCX crude oil January 2009 contracts ended lower at Rs 1,798 per barrel on Friday over previous week's close of Rs 2,026 per barrel, down by Rs 228 or 11.25% over the previous week. US crude futures rose above $36 a barrel on Friday after the UAE joined Saudi Arabia in deepening oil supply curbs to comply with Opec's biggest-ever output cut last week. Some investors buy gold as a haven as military tensions threatens to disrupt the financial markets.

MCX gold February 2009 contracts closed higher at Rs 13,093 per 10 gram on Friday over previous week's Rs 12,711 per 10 gram, up by Rs 382 or 3%. Local prices moved up quickly in a week as mounting tensions in the Middle East and South Asia boosted the appeal of the precious metal as a haven. Gold futures for February delivery climbed by $23.20 to $871.20 an ounce on Commex division of the New York Mercantile Exchange on Friday. The only possible explanation for gold's gains is the geopolitical tension in Gaza and between India and Pakistan, an analyst said.

MCX silver March 2009 contracts were traded lower at Rs 17,159 per kg on Friday from Rs 17,399 over the previous week.

MCX copper February 2009 contracts were lower by 2% to settle at Rs 139.65 per kg on Friday from Rs 142.55 over the previous week. The world's mines and scrap yards produced 1.20 lakh tonne more than was used in the nine months ended September 30, the International Copper Study Group said. Inventories of copper are increasing in Europe and the US and falling in Asia. LME copper prices fell to the lowest in four years as surging inventories signaled a slowdown in metal demand by builders and manufacturers.