October 22, 2006	Sunday	Ramazan 28, 1427

LONDON, Oct 21: Base metal prices notched up another record week on plunging stocks and keen demand, while crude oil prices headed lower as traders tracked Opec output news and US energy reserves.

On Friday, the Commodities Research Bureau's index of 17 commodities firmed to 306.11 points, from 303.64 points the previous week.

GOLD: Gold rebounded above 600 dollars for the first time since October 2.

Prices strengthened with gold retesting the 600-dollar mark on strong investor interest prompted by the positive sentiment in the oil market and the sharp decline in the dollar, said Barclays Capital analyst Sudakshina Unnikrishnan.

A weaker dollar makes commodities priced in the US unit on world markets more attractive to buyers using other currencies. Investors also seek refuge in gold because it is seen as a safe store of value in times of higher inflation.

The precious metal touched as high as 602.40 on Friday before pulling back slightly.

On the London Bullion Market, gold prices rose to $596.40 per ounce at Friday's late fixing, from $573 one week earlier.

SILVER: Silver prices climbed in line with other precious metals, breaching $12 per ounce.

Silver saw a strong rally as fund players appeared as keen buyers, said James Moore, an analyst for specialist website TheBullionDesk.com.

The metal hit 12.11 dollars on Friday -- last seen on September 11, 2006.

On the London Bullion Market, silver prices rose to $11.98 per ounce at Friday's fixing, from $11.40 the previous week.

PALLADIUM AND PLATINUM: Platinum and palladium prices rose.

Deutsche Bank analysts said that palladium gains would be limited owing to plentiful stockpiles.

“We remain concerned about the sizeable quantities of above ground stocks in both Zurich and Russia that could be liquidated and sold into the market if required,” they said.

On the London Platinum and Palladium Market, platinum rose to $1,080 per ounce at the late fixing Friday, from $1,073 the previous week.Palladium gained to $326 per ounce on Friday from $314 the previous week.

BASE METALS: The base metal complex enjoyed another historic week.

On the London Metal Exchange, three-month zinc prices reached an all-time pinnacle of $4,020 per ton the highest level since the metal was first listed in 1915. Zinc is used to galvanize iron and steel.

Nickel had touched an all-time peak of $32,250 per ton, while lead hit a record high $1,550 per ton. Tin prices meanwhile had struck $11,000 per ton the best level since 1989 when the metal was re-introduced on the London market.

Base metals are currently enjoying a record-breaking run thanks largely to weak stocks, ongoing production problems and soaring demand from China, whose economic growth has continued at a blistering pace.

However, China's economy expanded at a slower pace with growth of 10.4 per cent in the third quarter as extensive efforts to apply the brakes showed signs of working, official data showed.

On Friday, three-month copper prices stood at 7,665 dollars per tonne on the London Metal Exchange from $7,520 the previous week.

Three-month aluminium prices rose to $2,739 per ton from $2,641.

Three-month nickel prices advanced to $32,000 per tonne from $30,710.

Three-month lead prices decreased to $1,499 per ton from $1,508.

Three-month zinc prices climbed to 3,995 dollars per ton from $3,805.

Three-month tin prices stood at $9,950 per ton, up from 9,770 dollars a week earlier.

OIL: Crude oil held close to 60 dollars per barrel this week as the OPEC oil cartel trimmed daily output by 1.2 million barrels, but fell heavily late Friday as traders remained unconvinced over the move.

Over the past two weeks, mixed signals from Opec has helped to drive down crude prices, which have now lost around 25 per cent since striking record highs in July and August.

Crude futures also fell as a larger-than-expected increase in US crude oil reserves countered the effect of a surprise plunge in heating fuel stocks.

The US Department of Energy said Wednesday that distillate stocks, such as heating fuel and diesel, tumbled 4.5 million barrels in the week to October 13.

That was far more than the expected fall of 800,000 barrels.

Crude oil inventories rose 5.1 million barrels. Analysts had expected a rise of 1.5 million.

Opec oil ministers, meeting in the Qatari capital of Doha, agreed Friday to slash its production by 1.2 million barrels per day (bpd) from November 1, blaming the move on an over-supplied market.The cut will reduce actual production to 26.3 million bpd from 27.5 million bpd currently, which is below Opec's official quota of 28 million bpd, in place since July 2005. Traders gave a cautious welcome to the news.

Crude prices stabilized Friday before plunging by more than a dollar as traders questioned the effectiveness of the output decision.

The market is sceptical about the ability of the cartel to really implement a cut of 1.2 million,” said Investec analyst Bruce Evers.

It's going to take six weeks before we really know the amount that's really been taken off the market.”At about 1730 GMT on Friday in New York, a barrel of crude for delivery in November sank to $57.35 per barrel from $58.85 the previous week.In London, a barrel of Brent North Sea crude for delivery in December eased to $59.53 per barrel, from $59.80.

RUBBER: Rubber prices firmed as traders tracked the rainy season in major producing Asian nations.

The main underlying problem is still the rains that are keeping prices on the simmer and the availability of latex isn't quite coming through, Corrie MacColl analyst Rashid Ahmed said.

The rainy season, which began in October, makes it harder for farmers to collect latex.

On TOCOM, Tokyo's commodity exchange, natural rubber for February delivery rose to 230.40 yen per kilogramme on Friday, from 222.10 yen a week earlier.

Singapore's RSS 3 January contract gained to 192.25 US cents per kilogramme on Friday, from 183 US cents a week earlier.

COCOA: Cocoa prices were mixed, supported partly by simmering tensions in major producer Ivory Coast, but traders shrugged off news of a strike.

Market participants said it is possible that some support came from political tensions in Ivory Coast while news about the growers' strike had little impact on the market, Sucden analyst Michael Davies said.

On the LIFFE, London's futures exchange, the price of cocoa for December delivery dipped to 816 pounds per tonne on Friday, from 818 pounds a week earlier.

On the New York Board of Trade (NYBOT), the December contract stood at $1,428 per tonne on Friday, from $1,419 a week earlier.

COFFEE: Coffee prices slid as speculators sold their holdings and rains were forecast in key producer Brazil.

Rainy weather weakens prices owing to rising supplies on the market.

On LIFFE, Robusta quality for November delivery stood at $1,494 per tonne on Friday, from $1,498 a week earlier.

On NYBOT, Arabica for December delivery edged down to 101.85 US cents per pound on Friday, from 104.50 cents.

SUGAR: Sugar price gains were also held back by forecasts of rising output.

The market remains under pressure from expectations of oversupply in 2006/2007, said Davies, adding that many more crops had been planted following record price levels last May.

By Friday on LIFFE, the price of a ton of white sugar for March delivery changed hands at $358.10, compared with $352.70 a week earlier.

On NYBOT, the price of unrefined sugar for December delivery stood at 11.53 US cents per pound, from 11.19 US cents the previous week.

GRAINS AND SOYA: Wheat prices fell on profit-taking following record gains the previous week, while soya prices rose on increased buying interest.

On the Chicago Board of Trade, the price of wheat for December delivery decreased to $5.08 US per bushel on Friday, from $5.32 a week earlier.Maize for December delivery gained to $3.14 per bushel on Friday, from $3.07.

November-dated soyabean meal -- used in animal feed -- advanced to 6.07 dollars, from $5.89 the previous week.

On the LIFFE, the price of a ton of wheat for November delivery slid to 95.25 pounds on Friday, from 98.10 pounds.

COTTON: Cotton prices remained close to their lowest levels since August 2005 as Chinese buyers were notable by their absence.

On the NYBOT, the December contract fell to 48.70 US cents per pound on Friday, from 49.03 US cents a week earlier.

The Cotton Outlook Index of physical cotton dropped to 56.20 US cents on Thursday, from 56.50 cents the previous week.

WOOL: Wool prices jumped higher thanks to strong Chinese demand.

The demand was widespread, but led by buyers for China, said the Australian Wool Industries Secretariat.

The Eastern index rose to 7.55 Australian dollars per kilo on Thursday, from 7.41 the previous week. The British Wooltops index stood at 391 pence on Thursday, compared with 387 pence the previous Thursday.—AFP