LONDON, June 11: Metals prices dropped this week as the dollar firmed, while oil extended gains and coffee fell from five-year high points.
The Commodities Research Bureau’s index of 17 commodities fell to 303.02 points on Friday, from 306.13 points the previous week.
GOLD: Gold prices dropped as the dollar firmed against major currencies.
“The precious metals continued to succumb to dollar-related pressure,” said James Moore, an analyst at the specialist website TheBullionDesk.com.
A stronger US currency makes gold — denominated in dollars on world markets — more expensive for buyers.
A firmer dollar “will ultimately lend further pressure to the market and with gold now lacking the strong physical cushion it saw two weeks ago, I think we could be looking at a test back towards 414 dollars and possibly lower.”
A fall in buying interest from India has reduced demand for gold.
On the London Bullion Market, gold prices eased to 422.55 dollars per ounce at the late fixing on Friday from 423.55 dollars the previous week.
SILVER: Silver prices slumped from three-month highs owing to technical sales and the strength of the dollar.
“Silver, previously the star of the (precious metals) complex, has been the worst-affected with prices falling all week since reaching 7.64 dollars on Monday,” Barclays Capital analyst Kamal Naqvi said.
“A failure to penetrate upper resistance levels and a firmer dollar encouraged” liquidation.
On the London Bullion Market, silver prices dropped to 7.240 dollars per ounce at the late fixing Friday from 7.530 dollars the previous week.
PLATINUM AND PALLADIUM: Platinum prices fell in the wake of losses by gold and silver, while palladium steadied.
“Liquidation has also hit platinum,” Naqvi said.
“Palladium, which has not gained as much to the upside as the rest of the complex, has been steadier.”
By Friday, platinum prices fell to 868 dollars per ounce on the London Platinum and Palladium Market from 874 dollars the previous week.
Palladium prices stood at 185 dollars per ounce on Friday from 184 dollars.
OIL: World oil prices won support from concerns about strong fourth-quarter demand, a surprise drop in US crude oil inventories and fears of disruptions to supplies.
The US Department of Energy reported crude oil reserves fell 3.0 million barrels to 330.8 million in the week to June 3.
The DoE also reported gasoline (petrol) stockpiles had fallen by a modest 100,000 barrels to 217 million barrels during the ongoing US summer holiday driving season when consumption is at a peak.
Distillates rose by 1.3 million barrels, the DoE added, in line with analysts’ consensus forecasts, amid fears of a shortage of heating oil during the next northern hemisphere winter.
Traders, meanwhile, looked ahead to a meeting of the Organization of Petroleum Exporting Countries in Vienna on June 15 to discuss production output levels.
OPEC president Sheikh Ahmed Fahd al-Sabah this week proposed a hike of 500,000 barrels per day in the cartel’s output ceiling at the meeting should prices remain too high.
The sheikh, who is Kuwait’s energy minister, added that the price of oil should be five to eight dollars lower than current levels.
The 11 OPEC members are producing in excess of 30 million barrels per day compared with an official fixed ceiling of 27.5 million bpd for the OPEC-10 (excluding Iraq), agreed in March in the Iranian city of Isfahan.
Supporting prices towards the end of the week were rumours of pipeline sabotage in Iraq and concerns about the potential impact of a tropical storm on production facilities in the Gulf of Mexico.
RUBBER: Rubber prices climbed owing to higher demand and the ongoing rainy season in major Asian producing countries.
“It’s been steadier again this week because of bad weather and good demand,” an anonymous London trader said.
“The demand is mainly in the Far East” while in “Western Europe and America (it) is very slow”.
In Osaka, the RSS 3 July contract rose to 162.20 US cents on Friday, from 161.80 cents a week earlier.
Singapore’s RSS 3 July contract firmed to 142 US cents on Friday, from 141.25 cents.
The market has a “balanced supply-demand picture, despite some anxiety as to the ultimate size of the Brazil crop” after wet weather in March, Prendergast said.
By Friday on LIFFE, the price of a tonne of white sugar for August delivery increased to 254.30 dollars from 249.40 dollars a week earlier.
On the CSCE in New York, a pound of unrefined sugar for July delivery stood at 8.79 cents on Friday from 8.87 cents.
GRAINS AND SOYA: Soya and grains prices mainly fell amid rainfall in producing regions of the United States and Australia.
On LIFFE, wheat for July delivery stood at 68.75 pounds per tonne on Friday from 68.00 pounds a week earlier.
In Chicago, the price of wheat for July delivery fell to 316.25 cents per bushel Friday from 323.25 cents.—AFP
