BULLION Commodity
Precious metals prices slid on Friday, reversing earlier gains during the week as US dollar climbed against its major counterparts as Goldman Sachs and Co. was alleged of fraud, which gave rise to safe haven buying the US greenback. Goldman Sachs, the largest U.S. commodity broker, is charged with defrauding investors with a financial product tied to sub prime mortgages by the Security Exchange Commission.
In addition, hedge fund Paulson & Co. is also mentioned by the SEC, but not charged, in connection with the Goldman Sachs issue. Paulson & Co. is the largest institutional holder of the SPDR Gold Trust (GLD) with about 8.4% stake, whereas Goldman Sachs also holds the 11th largest stake at 0.6% in the fund.
Concerns of the brewing troubles in the debt laden country, Greece, continued to put pressure on the European currency, which also helped to turn the sentiment negative. Investors also found it to be a good opportunity to bank in on the yellow metal’s earlier rise. The most active gold contract for June delivery plunged 23.4 U. S. dollars, or 2 percent, to finish at 1,136.9 dollars.
ENERGY Commodity
Crude oil prices also slid along with the rest of the market on Friday last week as rising US dollar and weekend profits booking engulfed the market, weighing on commodities complex as a whole. The accusations against Goldman Sachs and Co. also lead to weakness in the prices of crude oil.
Crude oil for May delivery fell $2.27 to settle at $83.24 a barrel on the New York Mercantile Exchange. However, positive economic data from US, the largest consumer of crude oil, and a drop in crude oil stocks is expected to support prices.
Natural gas prices, however, gained on Friday unlike rest of the commodities in spite of the Energy Information Agency reporting a more than expected build in stocks the previous day. Prices of natural gas rose taking cues from the progressing economy as pointed out by the economic data releases. The US housing starts showed a more than expected growth along with rising building permits.
BASE METALS
Base metals prices were also on their knees on Friday as rising US dollar and profit booking that emerged at higher levels weighed on the metals. The metals were also threatened by steps from China, the largest consumer of copper, to curb lending activity in the country by raising mortgage rates and down payment requirements.
The prices were also subdued as stockpiles of copper continued its uptrend in Shanghai Futures Exchange, reaching the highest since 2003. However, positive economic data from US managed to limit losses.
Nickel prices had hit its highest in 23 months on Friday but failed to hold on to its perch and slid as rising US dollar and weak market sentiments pulled prices down. Nickel prices jumped 60 percent in 10 weeks and doubled in the last 1 year due to strong Chinese demand and rising stainless steel demand
