BK: Gold and silver prices weakened on a stronger dollar and easing of tensions in Eurozone region
The decision of 28 member countries of International Energy Agency (IEA) to release 2 mn barrels per day of crude oil to compensate for shortfall in Libyan supplies has weakened the energy markets last week with both crude oil and natural gas prices witnessing a falling trend. Copper prices rebounded on positive developments for Greece which has received support from EU members to tide over financial crisis and avert a debt repayment default. Gold and silver prices weakened on a stronger dollar and easing of tensions in Eurozone region.
Precious Metals
Gold fell, capping the biggest two- day drop in seven weeks, as a pledge by European Union leaders to stabilize the region’s economy slashed demand for the precious metal as a haven.
On the Comex inNew York, gold futures for August delivery fell $19.60, or 1.3 percent, to close at $1,500.90 an ounce, the lowest settlement since May 19. In two days, the metal slumped 3.4 percent.
Silver futures for September delivery declined 36.6 cents, or 1 percent, to $34.65 an ounce. This week, the price dropped 3.1 percent. The metal has gained 12 percent in 2011.
Platinum futures for October delivery fell $17, or 1 percent, to $1,680.50 an ounce on the New York Mercantile Exchange. Earlier, the price touched $1,678.50, the lowest since March 17. The metal, down 4.1 percent this week, has declined 5.5 percent in 2011.
Palladium futures for September delivery slumped $11.85, or 1.6 percent, to $731.50 an ounce. Earlier, the price touched $731.10, the lowest since May 24. The commodity, down 1.9 percent this week, has declined 8.9 percent in 2011.
In Indian market, MCX August Gold Futures opened the week at Rs.22580 and down by 1.68% to 22199, after hitting a low of Rs.22123.
MCX Silver July opened this week at Rs.53820 and ended lower by 3.67%% at Rs 51840 on profit booking at higher price levels. The contract hit a low of 51720 this week.
Crude Oil
Crude oil fell in London and was little changed in New York following the International Energy Agency’s announcement yesterday of the release of 60 million barrels to the market.
Futures inLondontumbled 8 percent in two days on the IEA’s plan to respond to the drop in Libyan exports by the coordinated action of members. Oil also dropped as Oracle Corp. ledU.S.equities lower and on concern Italian banks will be downgraded by Moody’s Investors Service, signaling the Greek debt crisis may spread to other European countries.
On Friday, brent crude oil for August delivery dropped $2.14, or 2 percent, to $105.12 a barrel on the London-based ICE Futures Europe exchange.
Crude oil for August delivery increased 14 cents to settle at $91.16 a barrel on the New York Mercantile Exchange. The August contract dropped 2.4 percent this week.
The IEA’s decision came after the Organization of Petroleum Exporting Countries failed to reach an accord on production increases at a June 8 meeting inVienna.Saudi Arabiapledged following the meeting that it and three otherPersian Gulfstates would keep consumers sufficiently supplied.
InIndia, at MCX, Crude oil July contract fell 1.4% from Rs 4185 to Rs 4126 after hitting a low of 4065 while August contract declined 1.11 per cent to Rs.4177 after hitting a low of Rs.4118.
Natural Gas
Natural gas futures rose at the weekend on profit-taking and expectations that demand-inducing heat would return next week to manyU.S. markets.
On Friday natural gas for July delivery settled 3.6 cents, or 0.86%, higher, at $4.229 a million British thermal units on the New York Mercantile Exchange. The benchmark contract ended this week 2.1% lower.
Futures fell to their lowest price in a month Thursday after the Energy Information Administration reported thatU.S.stockpiles grew by 98 billion cubic feet last week--well above market expectations and historical injections.
A near-term weather outlook that hints at an uptick in demand for gas to power air conditioners buoyed futures somewhat against further declines during the period.
Temperatures in the mid 90s are likely next week in most Midwestern cities with the potential for readings to exceed 100 degrees Fahrenheit fromSt. Louissouth to theGulfCoastand intoTexas, said Joel Widenor, a meteorologist with private forecaster Commodity Weather Group.
The number of rigs drilling in theU.S.for natural gas rose this week by three, to 873, stopping a two week skid, according to Baker Hughes Inc. (BHI). That's off a recent peak of 992 seen last August, but still above the 800-rig level many analysts believe the count must fall to before production balances with demand.
In India at MCX, Natural gas July contract closed down by 1.74% to Rs.191.60 per mmBtu, after hitting a low of 190.100 per mmBtu, whereas the August contract decreased to Rs.193.60 per mmBtu, a decline of 1.57%
Base Metals
Copper climbed in global markets after European leaders showed support forGreece, easing concern that a default may hurt global growth.
Three-month copper on the London Metal Exchange advanced as much as 2.1 percent to $9,145 a metric ton, and traded at $9,089.75 inLondon. The metal down 0.1 percent this week. Copper on the Comex inNew Yorkrose 1.6 percent to $4.122 a pound.
In theU.S., the world’s second-largest copper user, applications for jobless benefits rose more than forecast last week, and consumer confidence fell for the first time in five weeks, separate reports showed yesterday. The Federal Reserve this week lowered its forecasts for growth this year and next and raised estimates for the unemployment rate.
Lead in London climbed 0.6 percent to $2,565 a ton, tin fell 0.4 percent to $25,100 a ton and nickel fell 0.2 percent to $22,085 per ton. Aluminum was little changed at $2,505 a ton and zinc was down 0.8 percent at $2,243 a ton.
In Indiaat MCX, copper August contract rose marginally higher from Rs.410.80 to Rs.411.40 per Kg after hitting a high of 414.90 per Kg whereas the November contract ended slightly higher at Rs.417.70 per Kg after hitting a high of 420.65.
