Gold,silver lose shine; global commodities fall

Commodities fell to a nine-month low as silver,copper and nickel tumbled on deepening concern over policymakers running out of tools to avert another global recession.

Commodities fell to a nine-month low as silver,copper and nickel tumbled on deepening concern over policymakers running out of tools to avert another global recession,hurting demand for metals,fuel and food. Gold fell below 1,700 an ounce in New York. The Standard amp; Poors GSCI Index of 24 commodities fell as much as 2.2 per cent,the most since December 2,and was down 0.8 per cent at 2:40 pm in London. The index is down 7.8 per cent this week,the lowest since May 6. Silver slumped 10 per cent,copper was down 2.7 per cent and nickel dropped 3.1 per cent.

In Mumbai,the unprecedented global sell-off in commodities hit the domestic bullion market hard as precious metals continued to witness heavy liquidation by speculators and traders. Gold slumped and silver bore the most brunt by plunging to a three-month low as panicky investors resorted to frantic unwinding amid fears that the worst was yet to come.

Rising fears of world economy falling into prolonged recession stomped investors minds after US Fed Reserves grim comments of gloomy economic outlook resulting in hectic sell-off in equities and commodities. In overseas markets,gold lost its safe haven tag and hit a one-month low as selling continued to offset their losses on other assets.

Standard gold 99.5 purity tanked by Rs 555 per 10 grams to end at Rs 27,475 from Thursdays closing level of Rs 28,030. Pure gold 99.9 purity tumbled by Rs 580 per 10 grams to close at Rs 27,585 from its overnight close of Rs 28,165. Silver ready .999 fineness crashed by a whopping Rs 6,530 per kilo to conclude at Rs 56,875 from Rs 63,405 yesterday.

Three-month copper on the London Metal Exchange fell as much as 7.3 percent to 7,115.75 a metric ton. Prices declined for a sixth day and have slumped 26 percent from the record 10,190 on Feb. 15. The metal is down 14 percent this week. Tin plunged as much as 14 percent to 17,000 a tonne.

Central bankers and finance ministers will discuss the economic outlook today at the annual meetings of the International Monetary Fund and World Bank in Washington.

The Federal Reserve on September 21 said it will replace 400 billion of short-term debt with longer-term Treasuries,saying it sees significant downside risks to growth.