MUMBAI: Commodity futures resumed the week on a sluggish note with leading counters continuing to show no signs of recovery. Crude oil, base metal counters had their work cut out as the underlying indicators showed little signs of improvement.
Even as US fourth quarter GDP data bettered forecast, but stronger US dollar and debt concerns weighed on commodity prices. Apart from currency moves, the traders are watching for latest cues from Europe.
Crude oil prices extended decline this morning during Asian electronic trades and are showing no signs of recovery as yet.
In fact, oil prices have slipped below $73 a barrel mark, as bears continue to hammer down the prices. In previous session oil had lost 1% on concerns about sluggish energy demand.
NYMEX crude for March delivery dipped 14 cents to $72.74 a barrel. The contract fell 75 cents to settle at $72.89 a barrel, marking a decline of more than 8% for the month of January.
Meanwhile, Royal Dutch Shell has shut down three oil flow stations in Niger Delta after a key crude oil pipeline was sabotaged, a company spokeswoman said on Sunday.
Oil demand shrank 2% in the past four weeks from a year earlier, while Japanese data showed crude imports fell 2.6% in December and gasoline sales tumbled 2.4%.
Money managers cut their net long crude oil futures position on the New York Mercantile Exchange in the week through Jan. 26, the Commodity Futures Trading Commission said on Friday.
Gold prices continued to trade softer after posting a third straight week of declines last week, as investors remained wary of gains in the US dollar which weaken bullion's appeal as a currency hedge.
Spot gold traded marginally up at $1,080.40 per ounce compared to New York’s notional close of $1,079.20. US gold futures for April delivery were steady at $1,081.60, compared to $1,083.80 an ounce on the COMEX division of NYMEX.
Year to date, the gold prices are about 2% lower. A proposal to limit bank risks continued to weigh on investor sentiment.
Buying of the platinum group metals to back new exchange-traded funds -- ETFS Platinum and ETFS Palladium --tailed off at the beginning of this week, data from ETF Securities, which operates the funds, showed.
Weak trend persisted on the base metal counters. Shanghai copper extended previous session decline, extending recent losses on pressure from a firm US dollar and worries that gains to 17-month highs last month were overdone.
Three-month copper on the London Metal Exchange (LME) fell 2.1% to close at $6,745.50 a tonne on Friday, and extended losses to $6,738.25 in after-hours trading.
LME copper hit $6,700 a tonne on Friday; it’s lowest since November7, 2009. The contract last stood at $6,650 a tonne, down $90.
The economy grew at a faster-than-expected 5.7%in the fourth quarter, the quickest pace in more than six years, the Commerce Department said.
Copper fell 8.5% last month, chalking up its weakest performance since December 2008, while aluminum dropped 6.8% its biggest loss in 12 months.
Zinc tumbled 17.5 %and lead 16.3% their biggest falls since October 2008. Strongest of the metals were nickel, which was flat on the month, and tin which scored a 1.5% rise.
The domestic commodity futures continued to trend lower following the weak global cues. On MCX, crude oil contract for near-month settlement was last quoting at Rs 3,382 a barrel, not far from its early high of Rs 3,384. The contract started the session at Rs 3,374.
MCX Gold for February settlement opened lower at Rs 16,185 per 10 gram, which is marginally below previous day close of Rs 16,200.
The contract was last quoting at Rs 16,196 per 10 grams, still struggling to claw back the psychological level of Rs 16,200. MCX Silver March settlement contract edged down to Rs 25,469 per kg, after having opened the session at Rs 25,560.
Base metal counters succumbed to persisting selling pressure from traders offloading net long position.
MCX copper for February settlement traded 0.5% lower at Rs 309.80 per kg, as rupee softened against the US dollar. MCX zinc February contract lost 1.2% lower at Rs 96.60 a kg.
