MUMBAI: Uncertainty over the progress of global economic growth continues to affect trading sentiment on commodity bourses.
There was some good news from the US in terms of moderate gains in consumer spending, but the marginal decline in manufacturing activity last month has had a negative influence on commodity demand outlook.
Oil prices continued to witness pressure since morning. Prices eased below $77 as forecasts indicated that tropical storm Alex would skirt the main production region in the US Gulf of Mexico, limiting disruption there to a few precautionary closures.
West Texas Intermediate (WTI) crude for August lost $1.44 to $76.81 a barrel, after falling 0.77% on Monday.
Alex, which was moving slowly north-northwest with no change in wind speed, was still expected to strengthen into the first hurricane of the Atlantic season on Tuesday, the US National Hurricane Center (NHC) said in latest advisory on Monday.
The NHC forecast Alex, located in the southwest Gulf of Mexico about 835 km southeast of Brownsville, Texas , would make landfall near the Texas-Mexico border early Thursday.
Shell Oil said on Monday it was shutting production from its western and central Gulf of Mexico assets ahead of Alex.
Two of Mexico’s three main oil-exporting terminals remained closed on Monday afternoon as Alex churned north in the Gulf of Mexico, the government said.
Mexican state-run oil giant Pemex said on Monday its offshore facilities in the Campeche sound continued to operate normally despite Alex strengthening in the Gulf of Mexico.
Gold once again faced a volatile session, similar to yesterday when it nearly touched last week’s all-time high before a firmer US dollar triggered heavy selling from speculators.
Spot gold lost $4.20 to $1,235.20 an ounce, after having risen as high as $1,262.45 an ounce on Monday, just below a record around $1,264, before losing much of the gain to a bout of profit taking.
The world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings were unchanged at a record high at 1,316.18 tonnes.
Shanghai copper moved lower, weighed down by the pace and scale of economic recovery. Three-month copper on the London Metal Exchange (LME) fell $136 to $6,674 a tonne, paring some gains in the previous session.
To support the sentiment, LME copper stocks continued to decline, down 1,075 tonnes on Monday to 453,175 tonnes, the lowest since early December last year.
Indicating active demand, the ratio of cancelled warrant-- materials earmarked for delivery -- to the total tonnage rose to 7.04%, the highest since June 2009.
Domestic commodity futures moved lower, tracking global markets. Meanwhile, the rupee extended decline against the US dollar, which prevented a sharp decline in commodity prices.
MCX crude oil futures for July maintained extended losses, tracking global markets. The contract was last trading 1.2% lower at Rs 3,584 per barrel after having spent the session between Rs 3,624 and Rs 3,578.
MCX Gold for August settlement contract made narrow gains amidst thin trades. It was last quoted at Rs 18,724. The counter spent the session between Rs 18,777 and Rs 18,707 per 10 grams. MCX Silver July settlement contract was trading 0.3% lower at Rs 29,472 per kg, after having opened the session at Rs 29,515.
Base metal counters were quoting weak on sluggish global demand outlook. MCX copper for June settlement was 1.7% lower at Rs 308.60 per kg. MCX zinc June contract lost nearly 2.5% to trade at Rs 83.10 per kg.
