May 14, 2006	Sunday	Rabi-us-Sani 15, 1427

LONDON, May 13: Metals prices rallied to all-time highs this week on a rush of speculative buying amid geopolitical concerns and tight supplies.

Metals were boosted also by news Wednesday that economic giant China planned to set up strategic reserves of copper, aluminium, uranium, coal, iron, and other key mineral resources over the next five years.

It’s been fireworks in the commodity market, said Corrie MacColl analyst Rashid Ahmed.

Oil prices experienced a roller-coaster week as traders tracked supply developments in major producers and consumers. Among soft commodities, rubber prices bounced to a 22-year high in Tokyo.

The Commodities Research Bureau’s index of 17 commodities advanced to 360. 63 points on Friday, down from 350.80 points the previous week. The index hit a record 365.45 on Thursday.

GOLD: The price of gold reached the highest level since 1980 owing to geopolitical and supply worries.

On the London Bullion Market, the price of gold touched $730.40 per ounce on Friday, which was last reached in January 1980.

The metal has rocketed by almost 40 per cent since the start of 2006.

Growing momentum from investors and speculators looks set to extend its rally, said James Moore, an analyst with specialist website TheBullionDesk. com.

Gold’s historic high stands at $850, reached in January 1980.

Precious metals are winning support from a weakening US dollar, tensions over Iran and inflation fears prompted by high oil prices.

A weaker dollar makes commodities priced in the US unit on world markets more attractive to buyers using other currencies.

Investors seek refuge in precious metals — particularly gold — which are seen as a safe store of value in times of higher inflation and geopolitical uncertainty — such as the current Iranian nuclear energy crisis.

On the London Bullion Market, gold prices jumped to 725 dollars per ounce at Friday’s late fixing, from 678 dollars on Friday the previous week.

SILVER: Silver prices breached $15 per ounce for the first time in 25 and a half years, in the wake of a stellar performance by sister metal gold and following a successful start to a new silver fund being traded on the American Stock Exchange.

Silver prices reached $15.22 per ounce on Thursday, the highest point since December 1980.

UBS analyst Robin Bhar forecast silver to reach $16 within three months.

On the London Bullion Market, silver prices raced to $14.94 per ounce at Friday’s fixing, from $14.07 the previous week.

PALLADIUM AND PLATINUM: Platinum prices hit a record high and palladium topped $400 per ounce for the first time for more than four years.

Platinum struck $1,340 per ounce on Friday, giving it a 36-per cent jump in value since the start of 2006. Also Friday, palladium hit $406.50 per ounce, the highest point since January 2002.

These remarkable gains are an indication of the weight of new money that is entering the metals markets at the moment, Bhar said.

Further gains for most of the precious metals look likely in the short term.

On Friday on the London Platinum and Palladium Market, platinum surged to 1, 325 dollars per ounce at the late fixing on Friday, from $1,180 the previous week.

Palladium leapt to $404 per ounce on Friday from $380 the previous week.

BASE METALS: The prices of aluminium, copper, zinc and nickel struck fresh record highs as low global inventories, supply disruptions and concern over Iran prompted frenzied speculative buying.

Three-month aluminium prices hit a record $3,310 per ton on Thursday. The commodity is used predominantly by the transport and construction industries.

Zinc, used to coat steel and iron, hit a historic peak of $4,000 per ton. Meanwhile nickel, which is mixed with other metals to provide resistance to heat and corrosion, reached an all-time summit of $21,200 per ton.

Copper, used in electrical wiring and plumbing, struck $8,800 per ton, following the closure of a mine in key producer Mexico.

Mexican mining company Group Mexico announced the closure Wednesday of its San Martin plant in northern Mexico amid an ongoing strike at the copper, silver and zinc mine.

These remarkable (price) gains are an indication of the weight of new money that is entering the metals markets at the moment, Bahr said

Further gains for most of the precious metals look likely in the short term.

On Friday, three-month copper prices on the London Metal Exchange jumped to $8,590 per ton from $7,680 on Friday of the previous week.

Three-month aluminium prices leapt to $3,156 per ton compared with $2,900 the previous week.

Three-month nickel prices rose strongly to $20,043 per ton from 19, $850.

Three-month lead prices increased to $1,280 per ton from $1,225.

Three-month zinc prices gained to $3,794 per ton from $3,470.

Three-month tin prices rose to $9,600 per ton from 9,325 dollars.

OIL: World oil prices rose in volatile trade as the market tracked troubles in major producers Iran and Nigeria, inventories data in the United States and a forecast revision by the International Energy Agency (IEA).

Crude futures fell at the start of the week on news that Iranian President Mahmoud Ahmadinejad had written to US President George W. Bush in an attempt to resolve tensions with its arch-enemy the United States.

However, they quickly recovered after Washington dismissed the letter.

Iran faces possible UN sanctions over its nuclear drive, which the Islamic nation maintains is purely for civilian purposes.

According to analysts, any disruption to crude exports from Iran could send global crude prices rocketing beyond 100 dollars per barrel.

After the rebound, crude futures fell again Wednesday after news that US energy inventories rose in the week to May 5. But on Thursday they rallied once more after the abduction of three foreign workers in the Nigerian oil city of Port Harcourt.

The workers’ release, coupled with a move by the IEA to lower its forecast for global oil demand this year, led to another pull-back for prices.

Analysts also tracked developments in southern Nigeria on Friday following an explosion at an oil pipeline which killed some 200 people.

New York crude hit a record high $75.35 per barrel in April and earlier this month Brent struck an historic peak of 74.79 dollars on supply concerns.

On Friday in London, a barrel of Brent North Sea crude for delivery in June climbed to $72.50 per barrel, from 70.76 dollars on Friday of the previous week.

In New York, a barrel of crude for delivery in June increased to 72.30 dollars per barrel on Friday from $70.00 the previous week.

RUBBER: Rubber prices in Tokyo reached the highest level for 22 years thanks to keen investment fund buying and soaring Chinese demand.

In Thursday’s Japanese trading, the commodity touched a peak of 274.50 yen per kilogramme.

Rubber was “following oil and gold” prices higher, according to Corrie MacColl’s Rashid Ahmed.

Oil is used to make synthetic rubber while investors buying hard commodities, such as gold, tend at the same time to buy also soft commodities.

On TOCOM, Tokyo’s commodity exchange, natural rubber for August delivery climbed to 270 yen per kilogramme on Friday, from 255.30 yen a week earlier.

Singapore’s RSS 3 August contract increased to 237.75 US cents per kilogramme on Friday, from 220.50 cents a week earlier.

COCOA: Cocoa prices firmed on investment fund buying amid concern at tensions in leading producer Ivory Coast.

The market remains wary about the prospect for growing tension between rival factions in Ivory Coast and the potential for another outbreak of violence, Sucden analysts said.

Ivory Coast produces 40 per cent of global cocoa output.

On the LIFFE, London’s futures exchange, the price of cocoa for July delivery rose to 873 pounds per ton on Friday, from 861 pounds a week earlier.

On the New York Board of Trade (NYBoT), the July contract gained to 1,568 dollars per ton on Friday, from $1.512 a week earlier.

COFFEE: Coffee prices went off the boil.

Coffee futures slipped sharply lower... due to a combination of fund liquidation, weak technical signals and limited roaster buying, Sucden analysts said.

On LIFFE, Robusta quality for July delivery slid to 1,147 dollars per ton on Friday, from 1,206 dollars a week earlier.

On NYBoT, Arabica for July delivery stood at 102.90 US cents per pound on Friday, from 108.25 cents.

SUGAR: Sugar prices reached an historic high as oil futures rebounded, traders said.

Sugar cane is used to produce ethanol, a cheaper alternative to motor fuel, or gasoline, which is refined from crude oil.

The price of a ton of white sugar for August delivery rose to a record peak of 495 dollars in London trading on Friday.

White sugar prices have jumped by 44 per cent since the start of 2006 and have doubled in one year.

On LIFFE, the price of a ton of white sugar for August delivery gained to 491.50 dollars, from $472.50 a week earlier.

On NYBot, the price of unrefined sugar for July delivery stood at 17.64 US cents per pound, compared with 17.21 cents.

GRAINS AND SOYA: Wheat and soya prices rose across the board as traders monitored weather patterns in major producer the United States.

Next week, it will all depend on the planting weather” said Allendale analyst Rich Nelson.

AG Edwards analyst Victor Lespinasse added: Wheat is on the flowering stage right now (and) is vulnerable.

On the Chicago Board of Trade, the price of wheat for July delivery rose to 4.06 US dollars per bushel on Friday, from 3.74 dollars a week earlier.

Maize for July delivery gained to 2.60 dollars per bushel on Friday from 2. 42 dollars.

July-dated soyabean meal — used in animal feed — climbed to 6.17 dollars per ton on Friday, from 6.10 dollars.

On the LIFFE, the price of a ton of wheat for July delivery advanced to 79.40 pounds on Friday, from 77.90 pounds.

WOOL: Wool prices staged a rebound, as the Australian dollar pared gains against its US counterpart, making Australia’s wool exports cheaper for buyers abroad using other currencies.

“The Australian wool market finished 1.1 per cent higher on average,” the Australian Wool Industries Secretariat said.

The Australian Eastern index closed at 7.13 Australian dollars per kilo on Thursday, compared with 7.08 Australian dollars a week earlier.

The British Wooltops index stood at 407 pence on Thursday, compared with 413 pence a week earlier.—AFP