Gold futures recovered partially from lower levels on the MCX platform at the week ended Friday. Base metals futures declined last week on weak LME markets, mainly supported by weak physical demand.
Copper futures moved down by 2.32%, while nickel futures fell by 4.54% over the previous week, on weak LME markets, due to lower demand from China. A fall in Shanghai copper stocks marginally lifted prices during the week-end.
The active February 2008 copper contract was down 2.32% to trade at Rs 269 per kg. The open interest was 12,109 kgs, up from 10,168 kgs the previous week. Total volume was 16,797 tonne, up from 10,168 tonne. Despite a negative correlation to warehouse stocks, prices had corrected by 3.44% to remain at $6735 a tonne. Shanghai copper stocks fell 6,836 tonne this week, slightly above market expectations, marking the third 20% fall in the past three weeks.
The current December 2007 nickel contract was down 4.54% to trade at Rs 1039.50 per kg. The open interest was 1,243 tonne, up from 1,037 tonne the previous week. Total volume was 714 tonne, up from 634 tonne. LME nickel price moved up $200 to $26,100. Prices have fallen 50% since touching a record peak in May. Asian nickel premiums have tumbled in recent weeks, as producers rush to sell the metal after Western stainless steel mills stopped buying.
The active December gold contract was higher 1.68% to trade at Rs 10,248 per 10 gram. Open interest was 9,855 kgs, up from 8,638 kgs over the previous week. Total volume was up at 9855 kgs from 8,638 kgs in the previous week. COMEX gold had rallied back to remain above $800 an ounce, aided by firm crude prices and a declining dollar, on expectations of interest rate cut by the US Federal. The Fed has already cut rates 75 basis points since September, to help relieve the market strains from this year?s credit crunch and its potential fallout. The euro rose against the dollar, replenishing gold?s appeal after the European Central Bank (ECB) left interest rates on hold.
The active February 2008 crude oil contract was higher 2.22% to trade at Rs 3543 per barrel. The open interest was 8.05 lakh barrels, down by about 2 lakh barrels, while total volume also decreased to 20.75 lakh barrels from 31.20 lakh barrels. Global crude oil prices jumped by more than 3% after the OECD urged the US and European Central Banks to avoid cutting interest rates.