April 22, 2006	Saturday	Rabi-ul-Awwal 23, 1427

LONDON, April 21: Precious metals continued their fall on Friday, with silver down over 20 per cent and gold five per cent from Thursday’s high as speculators sold long positions.

Oil and base metals were steadier in early trade — copper resumed its advance to new highs — though most commodities were affected by short-term volatility, and mining stocks were off earlier highs.

The sharp dip in precious metals took a bit of shine off the boom market, but analysts said the up trend was likely to continue.

Whatever short-term turbulence may be encountered on the way as speculative enthusiasm waxes and wanes, a long bull market in commodities is under way, said Sean Corrigan, chief investment strategist at Diapason Commodities Management, a commodities fund co-founded by investment guru Jim Rogers.

Gold bullion traded as low as $610.20 per ounce on the spot market on Friday morning, down 5 per cent from its 25-year high of $645.75 on Thursday, while fund selling slashed 21 per cent from the silver price.

It traded down at $11.60 on Friday morning, compared with its 23-year high of $14.68 the previous day, though both it and gold recovered some of this lost ground by 1113 GMT.

While gold was primarily a speculative purchase, oil and base metals were supported by supply and demand fundamentals as the global economy expands.

While commodities investors have benefited from the price rise, industries that consume these raw materials could be hurt, French auto parts maker Valeo warned.

The industry will be terribly affected by the rise in raw material (prices) in the second quarter, its chief executive said.

Some hedge funds may have to trim their short dollar positions to meet margin calls on long commodity futures positions, particularly gold and silver, lending support to the greenback.

The New York Mercantile Exchange raised margins for the gold, silver and copper futures markets which have recently rocketed to all-time and over two-decade highs.—Reuters