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Weak global and domestic sentiments continued to plague the commodity markets.
Continuing political unrest in Greece and concerns over Spain’s banking sector dampened investors’ confidence.
Increasing possibility of fresh elections in Greece heightened the crisis in debt-laden Euro Zone economy. Back home, the spurt in inflation dogged the market sentiments.
Gold
Spot gold fell below $1,560 an ounce due to a surge in the value of the dollar. This was after an initial consolidation rally.
The dollar rose to an eight-week high against a basket of currencies. The plunge in the value of the rupee tempered gold price movements in Indian markets.
Base metals
Base metals complex at the London Metal Exchange shed more than one per cent. Copper remained the worst performing counter, plunging to a four-month low.
Along with the weak Euro Zone, slowing growth prospects in China had put pressure on global base metal prices, a report from Geojit Comtrade said.
Crude
Worsening Euro Zone debt crisis and Saudi Arabian Energy Minister’s comments that prices would decline further drove Nymex crude to below $94 a barrel level.
Brent crude also extended its weakness, falling by more than $2 a barrel, the lowest levels in the last four months. Falling rupee would add further pressure to domestic crude oil market.
Rupee
The rupee had corrected heavily by 90 paise after the RBI’s policy move on Exchange Earners Foreign Currency account and trading limits of banks but closed above 53.50-60 again, signalling that the market is still not sure about the flows and policy reforms in the days to come, a report from India Forex Advisors said.
Weakness continued to dog the markets yesterday. Reports of increased foreign direct investment flows and spurt in NRI deposits failed to calm the market sentiment.
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