Mixed Trend In Base Metals On Unfavorable Economic Data

On a week-on-week basis, the base metals pack delivered a mixed performance on the LME, with lead, zinc and nickel ending in the red while copper and aluminium managed to end in the green. Unfavorable economic data from the US on Friday coupled with rising concerns with respect to slowdown in China’s economy acted as a negative factor for the metal prices.

But, sharp decline was cushioned on account of a weaker dollar.

However, depreciation in the Indian Rupee cushioned sharp decline on the domestic platform in case of nickel and lead and supported further upside in case of copper, aluminium and zinc.

Copper

On a weekly basis, copper prices rose around 0.4 percent on the LME on the back of a weaker dollar coupled with sharp fall in LME inventories. However, sharp gains were capped due to rise in Shanghai inventories coupled with rising demand concerns from China. The red metal touched a high of $8660/tonne and closed at $8527/tonne last week. However, Rupee depreciation led sharp gains on the domestic bourses last week and copper prices witnessed a rise of around 1.2 percent on the MCX.

Weekly copper inventories at warehouses monitored by the Shanghai Futures Exchange increased sharply by 1.1 to 227,276 tonnes on 16th March, highest level since July 2002.

In contrast to this, the red metal inventories on the LME warehouses decreased sharply by 4.4 percent to 263,825 tonnes on 16th March 2012, lowest since June 2009, from the previous level of 276,025 tonnes on 9th March 2012.

Precious Metals Tumble On Us Economic Data

On a weekly basis, gold declined sharply by more than 3 percent, marking its second-biggest weekly drop during the year on the back of early week decline after the Federal Reserve suspended additional easing due to favourable economic data from the US.

The yellow metal declined around 1 percent in the earlier trading session on Friday after India, the world’s top consumer of gold stated that it will double the import duties on gold to 4 percent from current 2 percent.

Fall in crude oil prices also affected the inflation led demand for gold in the last week. However, further decline was cushioned on account of weakness in the US dollar. The yellow metal touched a low of $1634/oz and ended its trading session at the level of $1660/oz in the last week.

MCX Gold April contract declined around 0.5 percent last week and sharp downside was not witnessed on account of a weaker Rupee.

Holdings in the SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, remained unchanged at 1,293.26 tonnes by 16th March 2012.

Silver

Silver was worst performer in the last week and traded sharply lower by 4.8 percent. Taking cues fall in gold prices coupled with mixed performance in the base metals complex, spot silver touched a low of $31.60/oz last week and ended its trading session at $32.53/oz on Friday.

However, depreciation in the Indian Rupee cushioned further decline on the domestic bourses. MCX Silver May contract dropped around 3.3 percent and touched a low of Rs56,673/kg in the last week.

Holdings in the iShares Silver Trust, the world's largest silver-backed exchange-traded fund, declined slightly by 0.1 percent to 9,752.67 tonnes on 16th March 2012 from the previous 9763.25 tonnes on 9th March 2012.

Crude Oil Weighs Down On Rising Inventories

On a weekly basis, Nymex crude oil prices declined by 0.3 percent taking cues from rising US crude oil inventories coupled with Saudi Arabia’s statement to offset any shortfall in production from Iran.

However, further downside in prices was restricted on account of a weaker dollar.

Oil prices touched a low of $103.78/bbl during the last week and closed at $107/bbl on Friday. On the MCX, crude oil prices declined by 0.3 percent last week and closed at Rs.5333/bbl after touching a low of Rs.5232/bbl.

Natural Gas

Nymex natural gas prices increased around 0.3 percent in last week on the back of more than expected decline in US natural gas inventories. Additionally, a weaker dollar also acted as a positive factor for the commodity.

Gas prices touched a high of $2.362/mmbtu during the week and closed at $2.324/mmbtu. On the MCX, Natural Gas March contract increased by almost 1 percent last week on account of Rupee depreciation and closed at Rs.116.9/mmbtu on Friday.