June 04, 2006	Sunday	Jumadi-ul-Awwal 7, 1427

LONDON, June 3: Commodities prices mainly headed lower this week, led by metals, which are pausing for breath after recently striking record and multi-year high points.

The Commodities Research Bureau’s index of 17 commodities fell to 345.64 points on Friday, from 345.82 points the previous week.

GOLD: Gold prices extended losses, touching the lowest level since the end of April on selling by speculators.

The start of the new trading month has proved quite negative for the precious as well as base (metals) complex with both resuming their corrective moves lower, said James Moore, analyst for specialist website TheBullionDesk.com.

Gold prices hit 619.10 dollars per ounce on Friday, the lowest point since April 25. Metals prices had began sliding the previous week on concerns that expensive commodity prices were spiking inflation, which in turn can weigh on economic growth.

Gold prices have recoiled from a 26-year high of 730.40 dollars, reached on May 12.

On the London Bullion Market, gold prices fell to 632.25 dollars per ounce at Friday’s late fixing, from 642.25 dollars a week earlier.

SILVER: Silver prices mirrored losses suffered by gold.

Like gold the metal appears the most at risk to further downside price movements, which in the current volatile conditions could trigger a pullback to 11-11.25 dollars, Moore said.

Earlier this month silver breached 15 dollars per ounce for the first time in 25 and a half years.

On the London Bullion Market, silver prices dropped to 12.15 dollars per ounce at Friday’s fixing, from 12.70 dollars the previous week.

BASE METALS: Base metal prices mainly fell, including nickel which dropped form a record high.

“Although the fundamentals (of supply and demand) remain tight for most of the metals... there is room for a deeper correction from which prices can then head higher again,” said William Adams, analyst at the specialist website BaseMetals.com

Nickel, which is mixed with other metals to provide resistance to heat and corrosion, had hit a record pinnacle of 22,500 dollars per ton on May 26.

Base metals, including aluminium, copper and zinc, have fallen from record highs in recent weeks owing to global concerns over rising inflation.

Historic peaks had been struck as low global inventories, supply disruptions and concern over Iran prompted frenzied speculative buying.

On Friday, three-month copper prices on the London Metal Exchange slid to 7,851 dollars per ton from 8,140 dollars the previous week.

Three-month aluminium prices declined to 2,631 dollars per ton from 2,772 dollars the previous week.

Three-month nickel prices fell to 21,600 dollars per ton from 22,200 dollars.

Three-month lead prices decreased to 1,060.50 dollars per ton from 1,117 dollars.

Three-month zinc prices dropped to 3,565 dollars per ton from 3,635.50 dollars.

Three-month tin prices stood at 8,285 dollars per ton from 8,140 dollars.

OIL: World oil prices steadied as a rise in US fuel stockpiles and a move by OPEC to maintain its crude output offset tensions in major producers Iran and Nigeria.

The Organisation of Petroleum Exporting Countries decided on Thursday to keep oil output at 28 million barrels per day, a 25-year high.

The same day, the US Department of Energy said reserves of gasoline (petrol), which are in focus at the start of the summer driving season, rose by 800,000 barrels to 209.3 million in the week ending May 26.

Crude oil reserves increased 1.6 million barrels to 345.5 million in the week. The US driving season sees Americans take to their cars on vacation, increasing strongly demand for motor fuel.

The market meanwhile tracked events in Iran. Six world powers agreed on Thursday on a incentive package of benefits if Iran suspended its nuclear fuel work, which has raised fears of weapons development, but threatened penalties if Tehran refuses to comply.

Market expectations are that Iran will reject the package, paving the way for possible UN sanctions over its disputed nuclear ambitions.

Analysts say that Iran — the world’s fourth largest producer of crude and the second-biggest member of OPEC — might cut oil exports in the face of sanctions.

Traders followed events also in Nigeria, Africa’s biggest producer of crude, amid the kidnapping Friday of eight Westerners on an offshore oil rig in Nigeria.

RUBBER: Rubber prices eased in Tokyo after striking a fresh record high beyond 300 yen.

SUGAR: Sugar prices lost ground.

Raw sugar has slumped 24 per cent since its 25-year high of 19.73 cents on the 3rd February in the broad commodity sell-off, due to a larger than expected sugar crop and some weakness in oil prices, Sucden analysts said.

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

As long as oil prices remain high the outlook for sugar remains well supported, the analysts added..

On NYBot, the price of unrefined sugar for July delivery dropped to 15.24 US cents per pound, from 16.10 cents.

On LIFFE, the price of a ton of white sugar for August delivery decreased to 445.20 dollars, from 454.10 dollars a week earlier.

COTTON: Cotton prices climbed as traders looked to end May in possession of the commodity.

On the New York Cotton Exchange (NYCE), the July contract rose to 52.55 US cents per pound on Friday, from 50.20 US cents a week earlier.

The Cotton Outlook Index of physical cotton increased to 55.35 US cents on Thursday, from 54.15 US cents a week earlier.—AFP