Crude oil prices fell sharply in the last week, as stronger dollar against other major currencies and concerns over weakening oil demand weighed on oil prices.
Crude oil dropped below $94 per barrel and has declined 12% last week as higher borrowing costs and reports showing worsening economy spurred skepticism that the US governments $700 billion bank-bailout plan will stimulate growth.
London gold prices also fell sharply in the last week, after the US senate approved $700 billion bailout plan, which boosted dollar against major currencies. Weakness in oil prices also weighed on gold prices.
MCX gold October contracts were higher to settle at Rs 12,783 per 10 gram over the previous week. Spot gold touched a low of $825 per ounce, falling from a high of $926.
We expect gold prices to trade on a volatile note in the near term amidst current financial turmoil as the financial markets appear to be undecided on the likely impact of the bail-out plan. In the long term, we maintain a bullish outlook on gold. We expect gold prices to remain bullish in the coming months and expect international gold price to touch $950, an analyst with Angel Broking said.
MCX crude oil October contracts were down to trade at Rs 4,442 per barrel on Friday over the previous week. The trend in crude oil prices can remain bearish in the medium term with a price target of $86.50 per barrel.
NCDEX guarseed November contracts were Rs 34 higher to trade at Rs 1,711 per quintal over the previous week due to fresh arrivals of early sown guar crop. With the second spell of rains coming in at the right time in the growing areas, the crop could be on target to meet the initial estimate of 1.10 crore bags output.
NCDEX soyabean November contracts were lower by Rs 206 to trade at Rs 1,764 per quintal on Friday over the previous week on account of weak sentiments of global market, harvesting pressure and higher production estimates of soybean.
According to Soybean Processors Association of India (SOPA), estimates of soybean output is reported to be 108.176 lakh tonne, up by 14.19% as compared to 94.73 lakh tonne last year. National productivity of soybean is estimated to be 1124 kg per hectare for 2008 against 1070 kg per hectare in 2007.