Editor’s Note
This report details a weak opening for India’s Multi Commodity Exchange on February 16, with broad declines across natural gas, silver, gold, and base metals attributed to profit-taking after recent gains.
The commodity market on the Multi Commodity Exchange (MCX) opened under pressure on Monday, February 16, the first trading day of the week. Sharp declines were recorded in natural gas and silver, while gold and base metals also remained weak. Profit-booking appears to be dominating the market following the rally in the previous session.
Natural gas recorded a sharp decline right from the opening, with prices falling by nearly 6 percent to around 276 rupees. This drop, following the previous session’s rally, is being attributed to aggressive profit-booking and weak international cues. In early trade, the gas contract emerged as the biggest loser, influencing the market’s direction.
Silver, which showed strong gains in the previous trading session, saw its decline deepen today. In morning trade, prices fell by about 3 percent, slipping to around 237,000 rupees per kilogram. According to market experts, pressure on prices is due to large position unwinding and profit-booking by short-term traders following the recent rally. Attention will now be on whether buying returns at lower levels or the downtrend continues.
All major gold contracts also appeared under pressure. Gold, Gold Mini, and smaller contracts linked to gold recorded declines of half to one percent. This indicates that investor sentiment remains cautious even in safe-haven commodities for now. The market is also keeping an eye on cues related to the dollar and global bond yields.
Softness was also observed in commodities linked to industrial demand. Base metals like copper, zinc, and aluminum recorded declines of about half to one percent, signaling that enthusiasm for fresh buying in the industrial segment remains weak for now. However, the electricity-linked contract showed strength, remaining a limited exception in the market.
According to MCX futures data from this morning, a weak trend persists in the base metals segment. Futures prices for most metals are trading lower, indicating traders are currently avoiding fresh buying. However, spot market prices remain relatively higher, suggesting physical demand has not completely weakened.
Copper futures are trading down by over 1%, around 1,195 rupees per kilogram, while the spot market price remains around 1,236 rupees. Futures trading below spot indicates the market appears somewhat cautious about near-term demand.
Aluminum futures are trading with a slight decline in the range of 307–308 rupees per kilogram. The price in the spot market remains slightly higher, suggesting industrial demand is currently stable, but traders are avoiding taking aggressive positions.
Zinc futures are trading down by about half a percent, around 322 rupees, while the spot price remains around 326 rupees. This clearly shows caution persists in the market, although physical market demand is still intact.
Nickel futures are trading around 1,525 rupees, while the spot price remains around 1,576 rupees. This large gap indicates confidence in industrial demand has weakened for now, and traders are reducing risk.
In lead as well, the futures price remains below the spot market, indicating cautious trading is currently underway across the entire base metals segment. Overall, while there is pressure in the futures market, the strength in spot prices suggests real demand has not completely weakened yet.
Overall, the market currently appears to be in a phase of correction and position adjustment following the rally. During the day’s trading, it will be important to see if buying returns after the decline or if selling pressure increases further. In the coming hours, cues from international markets will also play a crucial role in determining the direction of domestic commodity trading.