Gold, silver plunges sharply

Gold and silver prices recorded their sharpest fall in the recent past after surging past 16-years high. Recovery in the dollar witnessed traders running for covering profit in the international markets. Gold for February delivery traded as low as US$435 an ounce on the New York Mercantile Exchange before closing at US$438.70, down US$15, or 3.3%-- a level not seen since November 11, 2004. Silver too ended sharply lower. March silver dropped 74 cents, or 9.4%, to close at US$7.145 an ounce, the lowest in about a month. In the domestic bullion markets gold and silver prices declined on sustained selling by stockiest amid weak international advice. Standard gold declined by Rs50 at Rs6495. Silver ready was lower by another Rs190 at Rs11,650 per kilo.

Oil rises on dollar recovery

Crude oil price rose by the end of trading session as dollar gathered strength. Also, the US Government released report on Wednesday December 8, 2004, suggesting less than expected increase in heating oil and diesel inventories. Apparently, Brent futures for January delivery moved up 42 cents at US$38.69 a barrel in London. January light crude was up 48 cents at US$41.94 by the close in New York.

The Energy Information Administration of US reported distillate stocks, which include diesel and heating oil, rose by 1.4m barrels to 119.3m barrels last week. Commercial crude inventories edged upwards by 600,000 barrels last week to 293.9m barrels, while gasoline supplies rose by 2.4m barrels to 208.1m barrels. Meanwhile, Saudi Arabia, the most powerful member of the Organization of Petroleum Exporting Countries, is in favor of raising global oil stocks before OPEC would have to cut production.

Base metals remain weak

The downslide in select base metal prices continued in international as well as local wholesale non-ferrous metal market on stockiest selling and lost further ground. Copper was quoted below US$2,900 per ton on LME after scaling above US$3,200 last week. Other metals too turned weak due to lack of demand. Strengthening in dollar further aggravated the situation at metal complex.

In the domestic markets, Tin ingot remained weak for want of support and lost another Rupee at Rs525 per kilo for want of support. Zinc slab in thin trading quoted 50 paisa lower at Rs72 per kilo. Meanwhile, nickel plate remained flat at Rs740-860 per kilo.

Rubber recovers on frenzied buying

Pickup in the buying steadied the domestic rubber prices that had turned edgy in the recent times. On Wednesday, December 8 2004 rubber markets across the globe began to lookup. Covering groups were seen more active but keen not to enhance the quotations. Sellers were waiting for a recovery from current levels and RSS 4 closed at Rs50.00 a kg as on the previous day. The NMCE futures showed a positive trend. The December delivery was quoted at Rs51.35 (51.26), January delivery at Rs52.50(52.26), February delivery at Rs53.79 (53.37) and March delivery at Rs54.54 (54.41) per kg for RSS 4.The volumes also improved on fresh buying and short covering from traders.

Basmati prices may rise further

Basmati rice prices are poised to rise by Rs7-8 per kg quality-wise in the next three months, mainly in anticipation of lower crop and steady export demand. Prominent basmati varieties are Super, Pusa, Basmati-386 and 370. In the recent times the land under rice cultivation has come down considerably as farmers are seen opting for cash crops.

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