November 05, 2006	Sunday	Shawwal 12, 1427

LONDON, Nov 4: Crude futures tumbled this week, while wool prices hit the highest level for more than two years on strong demand and tight supplies.

Zinc and lead again broke record highs, while precious metals enjoyed strong gains.

On Friday, the Commodities Research Bureau's index of 17 commodities fell to 309.88 points, from 311.46 points the previous week.

GOLD: The price of gold struck the highest point for almost two months as the dollar weakened.

It rose above $627 per ounce on Friday -- a level last reached on September 8.

Gold has “established itself quite comfortably above the psychological level of $600 an ounce on improved (investor) sentiment”, Barclays Capital analyst Costanza Jacazio said.

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

On the London Bullion Market, gold prices jumped to $622.75 per ounce at Friday's late fixing, from $596.25 one week earlier.

SILVER: Silver prices mirrored gold's advance.

The precious metal reached $12.67 per ounce -- also the highest level since September 8.

Silver mimicked gold's moves, although relatively quietly, UBS analyst John Reade said.

On the London Bullion Market, silver prices rose to $12.62 per ounce at Friday's fixing, from $12.05 the previous week.

PALLADIUM AND PLATINUM: Platinum prices surged almost 12.0 per cent over the week as the market responded to a lower dollar.

While precious metals headed higher in general on Thursday, the award for outstanding performance goes to platinum, Reade said.

BASE METALS: Zinc and lead prices struck all-time peaks for a second week running on strong demand and tight supplies.

Zinc hit $4,325 per ton Wednesday on the London Metal Exchange (LME) -- the highest level since the metal was first listed in 1915.

Zinc appears to have taken over from copper as the bellwether of the LME complex, said UBS commodities analyst Robin Bhar, adding that the move higher was “underpinned by a further fall in LME stocks”.

Elsewhere, lead reached $1,700, the highest reading since the metal began trading in London in 1953.

On Friday, three-month copper prices fell to $7,296 per ton on the London Metal Exchange from $7,520 the previous week.

Three-month aluminium prices dropped to $2,770 per ton from $2,830.

OIL: World oil prices tumbled from above $60 owing to easing supply concerns.

Oil prices are being dampened by high levels of US energy inventories, slower economic growth in the United States and forecasts of a warmer northern hemisphere winter which should dampen demand for heating fuel.

Crude futures are under pressure also from doubts over the Opec cartel's promised production cuts.

The Organisation of the Petroleum Exporting Countries agreed last month to cut actual production to 26.3 million barrels per day from 27.5 million barrels per day currently, as of November 1.

Opec was spurred into action to combat a steep fall in oil prices, which are well off all-time highs above $78 per barrel reached in July and August.

At about 1445 GMT on Friday in New York, a barrel of crude for delivery in December slumped to $58.65 per barrel from $60.20 the previous week.In London, a barrel of Brent North Sea crude for delivery in December slid to $58.47 per barrel, from $60.66.

RUBBER: Rubber prices extended losses with the rainy season not in full flow across Asian producing countries.

Fund managers' interest seems to have withdrawn from the rubber market,said Rashid Ahmed, an analyst at Corrie Maccoll.

The main factor affecting the market really seems to be that, considering it's (the) rainy season, the past week or so has not seen such bad weather in the (Far) East. Rains are there but they are not too bad.The so-called rainy season, which began in October and draws to a close in late November, makes it harder for farmers to collect latex.

COCOA: Cocoa prices grew further.

London cocoa futures gained ground following strength in New York on fund buying, Sucden analyst Michael Davies said.

The market remains supported by the potential for political unrest in Ivory Coast.Ivory Coast has been split into two since a September 2002 when a coup attempt led by New Forces rebels failed to depose Ivorian President Laurent Gbagbo. The rebels have since then controlled half of the world's top cocoa producer.

COFFEE: Coffee prices rose, supported by fund buying.

Vietnam's exports in November and December are expected to stay unchanged from last year despite an expected increase in production, Davies said.

On LIFFE, Robusta quality for January delivery climbed to $1,586 per ton on Friday, from $1,517 a week earlier.

On NYBOT, Arabica for December delivery increased to 112 cents per pound on Friday, from 107.50 cents.

SUGAR: Sugar prices fell slightly.

Fundamentally, sugar supply remains abundant for 2006/07 and as a result market sentiment remains bearish, Davies said.

Trade buying dominated the market; however there was some speculative selling pressure as well.By Friday on LIFFE, the price of a ton of white sugar for March delivery dipped to $365.00, compared with $366.50 a week earlier.

On NYBOT, the price of unrefined sugar for March delivery eased to 11.56 US cents per pound, from 11.90 US cents the previous week.

GRAINS AND SOYA: Wheat prices declined, while soya and corn rose.

There has been some profit-taking on wheat at the end of October but wheat came back in the past days, Allendale analyst Joe Victor said.

Wheat prices have been hitting multi-year peaks owing to drought conditions in Australia, which has slashed the cereal's output.

Corn prices meanwhile gained this week from a smaller than expected US crop.

On the Chicago Board of Trade, the price of wheat for December delivery dropped to US$4.90 per bushel on Friday, from $5.06 a week earlier.Maize for December delivery grew to $3.43 per bushel on Friday, from $3.29.

January-dated soyabean meal -- used in animal feed -- gained to $6.62, from $6.49 the previous week.

COTTON: Cotton prices receded owing to uncertainty on the size of Chinese imports during 2006/07 and a drop in US weekly exports.

Imports by China are projected at 3.7 million tons over the period, representing 40 per cent of world imports, the International Cotton Advisory Committee said.

However, there is significant uncertainty regarding projected 2006/07 Chinese imports due to lack of information on Chinese consumption and the (buying or selling) intention of the China National Cotton Reserves Corporation, it added.

On the NYBOT, the December contract fell to 48.90 US cents per pound on Friday, from 50.40 US cents a week earlier.

The Cotton Outlook Index of physical cotton decreased to 57.30 US cents on Thursday, from 57.50 cents the previous week.

WOOL: Wool prices breached 8.0 Australian dollars for the first time since September 2004.

There are reports of stronger demand than has been seen for some time,the Australian Wool Industries Secretariat said.

“No doubt, the market is also impacted on by supply concerns going into the second half of the season. The widespread demand was reflected by a strong presence from buyers from Europe and other parts of Asia adding to the Chinese buyers.The Eastern index jumped to 8.44 Australian dollars per kilo on Thursday, from 7.82 Australian dollars the previous week.

The British Wooltops index gained to 424 pence on Thursday, from 391 pence the previous Thursday. AFP