Metals slide: Round II

Silver plunges by Rs 8,415 per kg in India; Gold loses Rs 395 per 10 grams

Metals came under pressure amid another broad sell-off as concerns over further Chinese monetary tightening,a weaker euro and further commodity-margin increases weighed on prices. In what analysts said phase two of the commodity slide this month,silver,gold and copper bore the brunt of the sell-off.

Silver came under heavy panic selling from stockists and fell by Rs 8,415 per kilo,while gold lost a hefty Rs 395 per 10 grams in Mumbai. Global commodity markets witnessed the second major carnage in less than a week on the back of a combination of factors like renewed strength in the dollar and concerns over the outlook for economic growth amid fears of inflationary pressure sparking broad-based selling of commodities, said a dealer.

Base metals retreated in overseas markets,with copper hitting a fresh-five month low,as investors remained edgy after a broad commodities index lost 3 per cent on Wednesday,barely a week after last Thursdays 5 per cent rout. Worries about a cooling Chinese economy after data showed industrial output growth slowing more than expected helped fuel Wednesdays slide,which saw the Reuters/Jefferies CRB index a broad measure of commodity performance drop 3 per cent. The index looks set to erase its year-to-date gain of 1.6 per cent after sliding nearly 9 per cent from this years peak hit just days before the May 5 selldown.

In Mumbai,silver ready .999 fineness slumped by Rs 8,415 per kg to close at Rs 51,705 from Wednesdays closing of Rs 60,120. Standard gold 99.5 purity tanked by Rs 395 per 10 grams to end at Rs 21,755 from Rs 22,150. Pure gold 99.9 purity too fell by Rs 400 per 10 grams to conclude at Rs 21,855 as against Rs 22,255 previously. After last weeks slump and subsequent recovery,were seeing another wave of selling on everything today, said a trader.

A drop of more than 5 per cent in oil prices on Wednesday dragged US stocks lower,and Asian and European equities followed suit. Were seeing a big drop in commodity prices today. Coppers taken a big hit,as has silver8230; money seems to be coming out of commodities,out of equities,and people seem to be willing to hold cash and sit on the sidelines for the time being, Manoj Ladwa,senior trader at ETX Capital,said.

In India,the BSE metal index fell 3 per cent. Sterlite shares dipped by 4.76 per cent,NMDC by 4.65 per cent and Hindalco 4.66 per cent. Copper tumbled to a five-month low as investors headed for the exit,fearing slower economic growth.