Global Commodities Recap – 30TH November, 09

Crude oil seesawed near unchanged as the weak dollar and strong refined products futures supported, even as uncertainty about the Dubai debt situation kept the market cautious. Dollar tumbled against the euro as easing concerns about Dubai's debt problems and stronger than expected U.S. regional business activity data eroded safe haven demand for the greenback. But investor confidence was fragile and the dollar briefly trimmed losses after a Dubai official said the Dubai government does not guarantee Dubai World debt. Elsewhere OPEC oil supply rose in November on higher output from Nigeria, the United Arab Emirates and Saudi Arabia, according to the Reuters survey.

Gold prices remain nervous as some investors opted for cash in residual wariness about Dubai's debt shock, but losses were limited by a weaker dollar and dip buying. Dollar fell 0.13% versus a basket of major currencies, boosting gold. A weaker dollar makes dollar priced gold more attractive for non-U.S. investors. Gold's losses were also limited by comments from a senior Chinese official who said Dubai's debt crisis could be China's opportunity to snap up gold and oil assets. Copper accelerated as a weaker dollar and investors seeking safety in tangible assets helped to support prices, but concerns remained about the Dubai debt crisis, weak demand and rising stocks. Dubai raised fears of a second bout of financial turmoil last week when it asked for a six-month repayment freeze on debt issued by Dubai World and its unit Nakheel. The large amounts of money pumped into the economy by governments around the world and low interest rates have raised the specter of spiraling inflation in the years to come.

Courtesy: Religare Commodities

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