Silver futures on the national bourses dropped on the week ended on Friday following the weakness in the yellow metal. Gold prices also continued its slide in the last week, as stronger dollar has reduced demand for yellow metals as an alternative investment.
Base metals, mainly copper futures staged a recovery on the LME, with technical corrective support helping to offset the negative influence of a super-charged dollar and weaker commodities. The copper market received a double-whammy boost on supply vulnerability.
Crude oil prices fell in the last week, as a fall in global demand and the rising dollar led to a steep fall in oil prices. Prices managed to close above key psychological support of $100, as traders were still showing concern over Hurricane Ike, which strengthened to category 2 on Thursday.
The silver December contracts were down Rs 1,667 or 8.4% to trade at Rs 18,119 per kg over the previous week. Total volume increased to 535 tonne from 374 tonne over previous week. Open Interest was 687 tonne.
As commodities are generally priced in dollars, the rising dollar weakens bullion prices by undermining the purchasing power of buyers using other currencies. Gold prices are trading in the oversold territory, and this can lead to technical buying at lower levels.
The gold October contracts fell further by 2% to settle at Rs 11,330 per 10 gram over the previous week. Total volume was 15,845 kg, while open interest was 13,826 kg.
The copper November contracts were higher 2.4% to trade at Rs 319.85 per kg on Friday over the previous week. Total volume has decreased to 17,156 tonne from 32,797 tonne over previous week. Chinese scrap merchants are again active in Europe which could lead to restocking of the metal. On LME, prices are finding strong support at $6,500 levels, an analyst with Angel Broking said.
The crude oil September contracts were down 2% to trade at Rs 4,668 per barrel on Friday over the previous week. Total volume was 13.58 lakh barrels, while open interest was 7.52 lakh barrels. Prices are expected to trade in the range of $100 and $110 a barrel, as concern over Hurricane Ike can lead to volatility in oil prices.