Commodities Round-up- 08-January, 2007

Gold was on a down slide in December. Since December 1, gold lost Rs 350 or around 3.5% and settled at Rs.9005 on 5th January 2007. This fall is attributed to a strong dollar position and falling crude oil prices. The physical demand for gold rises in the marriage season which starts around the mid of January and lasts till the end of May. The increased demand will result in a price rise and hence the price fall in December can be considered as the correction before a rise.

During December, gold lost nearly $12 in the international market and settled at $625 per ounce in New York. It showed a wide fluctuation of around $25 by achieving a high of $645 and a low of $620 during this period.

Warmer weather in the US results in lower crude oil demand. On the MCX it traded at Rs 2479 per barrel, which amounts to a loss of nearly 8% compared to last week. Supply of crude is expected to rise further, which may lower the price of crude oil.

Copper, which lost around 10% on LSE from Tuesday changed direction on Friday and closed at $5750 per tonne, $20 more than Thursday's close.

The area covered under potato has increased by about 4%, and with the crop condition and weather being favorable, output is expected to rise by about 20-25 lakh tons over last year's production of 250 lakh tonne, provided the pest (blight) is kept within control.

Pepper, chana, soya oil and soyabean were active players on the NCDEX. Pepper February contract closed 4.1% higher at Rs.11450 per quintal. Soyabean witnessed an over 1% rise across the most active February contract, while refined soya oil for February delivery closed at Rs 476.4 per 10 kg. Chana for February delivery hit a high of Rs 2,147 per quintal, which could not be sustained and it consequently closed at Rs 2,123 per quintal.