Market Recap

Bullions remained subdued in morning session although they eased little and slides below $800, drop in crude pressurized gold. Precious metal stayed under pressure on the dollar's strength and weaker oil prices. The dollar rose against the euro after U.S. service sector data came in stronger than forecast, then extended its gains after European Central Bank President Jean-Claude Trichet said the euro zone was in a period of weak economic activity. But Investors were also shaken by sharp falls in equities, prompting them to shift to dollars while pulling funds out of risky assets, including precious metals, but Asian bargain hunters were detected buying gold on dips.

Crude slipped below $106.It fell sharply as dollar headed stronger as U.S. service sector data came in stronger than forecast ignoring the fact of fall in crude inventories . Traders are watching the course of storms in the Atlantic Ocean. On Thursday, Powerful Hurricane Ike weakened slightly as it charged across the Atlantic toward the Bahamas and the United States, while Tropical Storm Hanna's death toll from floods in Haiti grew to 90. Traders are awaiting OPEC's Sept. 9 meeting. A consensus was building within OPEC to cut output to support prices and prevent a supply overhang from developing.

Base metals tumbled on back of hefty increase in LME stocks especially in copper. It dipped below the key $7,000 per tonne level after LME inventories posted their biggest one-day surge in four years. Strong dollar is also weighing on metals. Shanghai weekly stock also gave additional pressure as copper stocks in Shanghai increased 1,487 tonnes, or 8.4 percent, to 19,112, snapping a six-week string of declines. Chile's Codelco is looking to boost its molybdenum production as much as 22 percent by 2012, a senior company official told Reuters late on Thursday. BHP Billiton Ltd/Plc suspended all its iron ore mining in Australia on Friday, shutting in a third of the country's production after the second mine worker death in the past 10 days. Lead fell as much as 5 percent to $1,800 a tonne, a two-week low, Aluminium, which has been range-bound most of the week, traded at $2,660 from $2,677 per tonne, Zinc fell as low as $1,756 from $1,891 a tonne, nickel fell to $18,701 from $19,400, and tin dropped as low as $18,550 from $19,400.

Courtesy: Religare Commodities