MUMBAI: Commodity futures have resume this week on an optimistic note with crude oil, copper and other industrial commodity prices rising in early morning Asian trade.
Most of the gains are backed by previous week’s strength in prices amid positive cues.
Global economic showing signs of recovery have prompted investors to open fresh long positions.
In fact, the Commodity Futures Trading Commission (CFTC) last week report suggests that the large commercial investors have increased their long position on almost all actively traded counters.
Meanwhile, the recovery in Euro against the US dollar is also lending helping hand to commodity prices strengthen further.
US crude oil futures extended gains towards $82 a barrel, their highest in nearly eight weeks, in line with strong Asian shares and hopes for economic recovery in the world's top oil consumer.
NYMEX crude for April delivery was up 50 cents at $82.00 a barrel, after settling up $1.29 at $81.50 on Friday. It rose as high as $82.07 on Friday; it’s highest since January 12.
Money managers extended their net long crude oil futures position on the New York Mercantile Exchange in the week through March 2, the Commodity Futures Trading Commission said on Friday.
The key speculator group hiked net long positions to 144,058 during the week, up from 132,504 in the week to February 23.
Gold ticked higher this morning on firmer euro after ending about $20 higher last week as a sovereign debt crisis in Greece ignited safe haven buying, which also sent euro-priced bullion to record.
Spot gold traded as high as $1,136.85 an ounce and was last at $1,136.20 an ounce, steady from New York’s notional close on Friday, when bullion in euro term jumped to a lifetime high at 838.26 euros.
The world's largest gold-backed exchange-traded fund, SPDR Gold Trust, said its holdings stood at 1,116.12 tonnes as of March 5, up 0.61 tonnes from the previous business day.
Base metals moved higher on Friday on the back of stronger-than-anticipated non-farm payrolls data, in what finished up as being a strong week for metals prices.
Copper rose 4.8% over the week to be only 1.1% below its early-January peak, with the earthquake in and falling LME and SHFE all contributing to the increase.
Zinc rose by 4.0% on Friday and was the best performer over the week, ending up 7.0%, although it remains 15% below its early-January peak.
Shanghai copper is expected to rise on Monday, chasing a 2.4% rally in London futures in the previous session. Comments from Chinese Premier Wen Jiabao that the country would maintain an appropriately easy monetary stance and an active fiscal policy, and his target for an 8% GDP growth also helped underpin expectations for raw materials demand.
Three-month copper on the London Metal Exchange (LME) rose $175 to close at $7,545 a tonne on Friday, near a seven-week high of $7,600 struck earlier last week. LME copper last stood at $7,575.
The outlook for prices was further supported by expectations that demand should improve radically between now and next year, due in large part to bulk consumption by Chinese infrastructure projects.
Copper demand is expected to expand about 7% to about 6 million tonnes in 2010, with prices seen rising in the first half of the year.
Domestic commodity futures started marginally higher tracking positive global cues. However, stronger Rupee was a bit of a dampener. Apparently, leading commodity prices show marginal gain in prices.
On MCX, crude oil contract for near-month settlement was last quoting marginally higher at Rs 3,730 a barrel, which is not far from its intra-day high of Rs 3,735, which is also its opening tick.
MCX Gold for April started lower at Rs 16,890 per 10 gram. Steady rise in selling pressured the counter further lower. Since, the counter has retraced to current level of Rs 16,881 per 10 grams.
MCX Silver March settlement contract traded 0.4% higher at Rs 27,137 per kg, after having opened the session at Rs 27,098.
Base metal complex too strengthened in initial trade taking positive cues from LME.
MCX copper for March settlement was last quoting 0.3% higher at Rs 345.45 per kg, after resuming the session at Rs 345.30. MCX zinc March contract added 0.6% to trade at Rs 107.40 per kg.
