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In the London market, gold fell to a seven-week low on October 17, as a surge in stock markets and renewed dollar strength encouraged the interest back into the safe-haven metal. In the day, gold was fixed at $310.75 an ounce. Gold has lost nearly 3 per cent, or just over $9 an ounce, since the start of that week as stock markets have rallied.
Gold prices hit a 2-1/2 year high of $330.30 an ounce in June 2002, but have gradually slipped back down as fears of a United States-Iraq war have receded, eroding the metal’s war premium.
Gold prices sagged during the period October 12-19, hit by waning speculative interest following a stunning recovery in global stock indices. The spot price of the yellow metal fell to $310 per ounce on October 17 - its lowest level in more than seven weeks - although prices subsequently recovered slightly.
World oil prices fell in recent days as talks between the United States and other members of the UN Security Council delayed a fresh resolution to disarm Iraq. Benchmark Brent crude oil slid to $26.97 a barrel on October 21, in the London market.
The threat of war in the Middle East and disruption to oil supplies has kept crude close to $30 a barrel since August. Oil prices have risen by nearly 50 per cent since the beginning of the year, as the US steps up a campaign to topple the Iraqi, leader. He has been accused of stockpiling the weapons of mass destruction, but Iraq denies having such arms.
The US Department of Energy (DoE) reported that the US crude oil stocks rose 8.9 million barrels, or 3.3 per cent, to 279.4 million in the week ended October 11 from the previous week.
Coffee price have risen in recent weeks about the potential implications for world supply of an unusually dry period of weather in some of the major Brazilian growing regions. Prices rose sharply to their highest level in two years, after it was predicted that the dry spell would persist in Brazil in the coming days.
In London Liffe’s January contract climbed $29 to settle at $699 a tonne on October 15. Earlier it touched a high of $709, the highest for a second-position contract since November 2000.
In New York, the CSCE December contract settled 6.90 cents higher at 69.70 cents a pound. Its peak, at 71.25 cents, was the highest for a front-month contract since the 72.50 cents reached at the end of July 2001.
Cocoa prices fell sharply, shedding more than #100 in the London market, as news of a peace plan in Ivory Coast encouraged selling on prospects that the cocoa trade would soon return to normal. Ivory Coast produces 40 per cent of the world’s cocoa crop.
In the London market, the contract for delivery in December, which hit a near 17-year high of 1636 pounds on October 14, was trading at 1354 pounds on October 18.
Weakening demand from manufacturing industries, has effected the secondary aluminium market in the continental Europe, which has seen the cost of ingots fall by 40 pounda tonne.
The near term outlook is distinctly pessimistic. The demand is poor from the construction sector, while from the auto industry it appears to be somewhat better.
