Crude oil January 2009 contracts fell sharply by 14.45% to finish at Rs 2,026 per barrel on Friday over the previous week. The price of New York crude oil sank under $34 per barrel on Friday for the first time in more than four and a half years, as weak global demand overshadowed a record OPEC output cut. The January futures contract, which expired on Friday, tumbled more than 7% to as low as $33.44a barrel.
Falling crude prices could pressurise the bullion pack. Silver prices are also moving in tandem with gold prices, but it being an industrial metal, falling base metal prices is putting pressure.
Gold future prices continued its rally in the last week as sharp fall in dollar against major currencies supported the yellow metal. Gold February 2009 contracts finished firm at Rs 12,711 per 10 gram over the previous week. Prices touched a high of $882.40 per ounce on Wednesday before falling on account of profit booking by traders at higher levels. Weak macro economic data from the US has boosted golds appeal as a safe asset in the times of uncertainty. Silver March 2009 contracts were higher by 2.58% to trade at Rs 17,961 per kg over the previous week.
With copper inventories gaining steadily, the metal could trade on a weaker note.
Shanghai copper futures fell by their 4% downside limit on Friday, scoring a new five-year low, echoing a similar overnight fall in London on gloomy demand prospects. Copper February 2009 contracts were lower by 9.50% to settle at Rs 142.55 per kg over the previous week.
All base metals are expected to remain under pressure in the next two-three months until physical buying from China picks up, an analyst with Angel broking said.