WEEKLY COMMODITY MARKET: GOLD PRICE FACES WORST WEEK; OIL EXTENDS THEIR WEEKLY GAINS

Domestic Commodity markets ended the 1st week of this month positively with total turnover increased by 31.81% at Rs. 20192800.20 lakh in various futures & option contracts for commodities listed at MCX during the week 1st to 5th Feb 2021.

Gold future ended with gain on Friday but not recovered the weekly losses. Gold and Silver prices witnessed a sharp decline in Indian markets. The government announced a cut in import duty on the metals in Budget 2021-22, a move that will help bring down prices of the precious metals in the domestic market and boost exports of gems and jewellery. The customs duty on gold and silver was reduced to 7.5 per cent. Presently Gold and Silver attract a basic customs duty of 12.5 per cent. Gold Feb future saw a 3.54% decline at Rs. 47360 per 10 gms. Silver headed for its worst week in three after retreating sharply from multi-year highs hit earlier this week when increased retail interest had propelled prices. Silver Mar future dropped 1.39% to Rs. 68738 per kg.

Base metals complex ended the week higher as Nickel, Zinc, lead and Copper prices gained above 2% on Friday backed by positive economic data from the US. Zinc prices was supported by fears of tightening supply of iron ore in China. The slower pace of economic recovery and Chinese Lunar day holidays may limit the upside in base metals till mid-February. Nickel Feb delivery ended the week gains of 2.27%. Zinc Feb delivery registered gains of 3.35% and Lead Feb delivery up by 2.83% as against previous week close. Copper Feb delivery jumped by 2.27% to Rs. 609.55 per kg due to higher demand in spot market.

Crude oil Futures set a fresh one year high, gained by 8.40% at Rs. 4141 per barrel in this week. Crude was buoyed this week by a pledge from the Organization of Petroleum Exporting Countries and its allies to keep draining a virus-driven surplus. Expectations of a global economic recovery this year are also raising forecasts for stronger oil demand, even though lockdown measures are restricting mobility in the meantime. Natural gas Feb futures settled at Rs.215.90 jumped 12.74% on this week.

Under Agri commodities, Cotton Feb future gained 2.10 % and CPO future up by 1.94%. Mentha oil Feb delivery ended the week 2.61% down.