Commodity market feels the heat too

NAGPUR: The Goldman Sachs fraud allegation took its toll on the commodity markets on Monday with all major international metals as well as crude plummeting in the commodity derivative exchanges at home. Analysts say the news led to selling pressure in the commodities, leading to the fall.At the Multi Commodities Exchange (MCX), by evening, silver fell by almost Rs 200, touching a low of Rs 26,806 a kg, gold was down by Rs 136, reaching a low of Rs 16,473 (per 10 gram). While copper prices touched a low of Rs 340 a kg, steel prices took a hit of Rs 500, dipping to Rs 26,980 a tonne, nickel stooped to Rs 1,150 a kg. Crude touched a low of Rs 3,690 a barrel.‘‘The issue has created afeeling of uncertainty among investors who apprehend that more such cases maycome up. Since entities like Goldman Sachs, too, have their funds parked incommodities, investors may prefer to pull out till things settle down,'' saidAmar Singh, head of commodities desk, Angel Broking.Commodityprices, however, got support later on account of a falling rupee. Moreover, themarkets were also expecting a correction and Goldman Sachs acted as the trigger,he added. Anuj Badjate of Badjate Securities in Nagpur said the crisis alsoindicates the likelihood of the beginning of the second leg of the financialcrisis in the western world which can have an impact on the demand for thesecommodities. Apprehensions of weaker demand could also have led to sellingpressure at these counters.However, G V Iyer of Apex Investmentsbrushed off the dip as just a correction. ‘‘These counters had seena one-sided rally over the last two months and the prices just needed a reasonto correct,'' he said.