Mumbai, Dec. 15
OPINION that commodities worldwide are likely to correct downwards on year-end considerations is gaining ground. Risk reduction is usually the flavour of the season, this time of the year.
There already are telltale signs of profit-taking and position squaring, especially in commodities that have been strongly trending upwards in recent weeks. Volatility usually dries towards the year-end and into the New Year.
In particular, gold and silver, which have been popular markets of late due to their strong trending characteristics, are showing signs of position rewinding. The yellow metal has already fallen this week, while silver too has witnessed a decline of almost 10 per cent.
Other precious metals - palladium and platinum - too are in the correction mode. "As the year approaches an end, longs are unwinding their positions and heading for the exit," commented an expert.
Analysts are wondering if there is more downside left to the bullion market, and whether there would be spill over into other markets.
Specifically, copper and aluminium have been impressive performers of late; but in the last few sessions there has been a modest slip lower. Many believe, both copper and aluminium look to be at most risk.