MUMBAI: Commodity futures plunged globally, after equities ended sharply lower and US dollar strengthened against basket of currency which has in turn lowered commodities investment appeal. Base metal counters were earlier frozen at lower limit on demeaning demand prospect. Crude oil prices slipped lower on waning fears of ‘Alex’ – the first tropical storm slowly moving away from Gulf-of-Mexico. Meanwhile, gold prices continue to remain volatile amid increase speculative selling pressure.
Oil prices continue to witness pressure since morning. Prices have eased towards $76 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 $1.78 to $76.47 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 520 miles (835 km) southeast of Brownsville, Texas, would make landfall near the Texas-Mexico border early Thursday.
Shell Oil Co 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 has faced volatile session so far, similar to previous day when it nearly touched last week's all-time high before a firmer US dollar triggered heavy selling from speculators.
Spot gold lost $4.30 to $1,235.00 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 tonne.
Shanghai copper moved lower weighed down by the pace and scale of economic recovery. Three-month copper on the London Metal Exchange (LME) fell $195 to $6,615 a tonne, paring entire previous session gains. Other base metal counters were also depressed from heightened selling pressure.
To support the sentiment, LME copper stocks continued to decline, down 1,075 tonne on Monday to 453,175 tonne, 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 weak global markets as well as domestic equities losing over 1.3%. Commodity prices may have declined sharply lower had rupee not extended decline against the US dollar. Falling rupee arrested the decline in commodity prices.
MCX crude oil futures for July extended losses tracking global markets. The contract was last trading 1.4% lower at Rs 3,576 per barrel after having spent the session between Rs 3,624 and Rs 3,562.
MCX Gold for August settlement contract made narrow gains amid thin trades. It was last quoting at Rs 18,739 after having spent the session between Rs 18,788 and Rs 18,707 per 10 grams. MCX Silver July settlement contract was trading 0.1% lower at Rs 29,525 per kg, after having opened the session at Rs 29,515.
Base metal counters were beaten out of shape following the massive sell-off on global metal complex. MCX copper for June settlement was 2% lower at Rs 307.30 per kg. MCX zinc June contract lost nearly 3% to trade at Rs 82.60 per kg.
