November 26, 2006	Sunday	Ziqa'ad 4, 1427

LONDON, Nov 25: The price of nickel and platinum hit historic highs this week, while other dollar-sensitive metals such as gold, silver and copper also posted strong gains.

After coming under pressure early in the week, oil prices also advanced, while commodities like sugar, coffee, cocoa, wool and rubber retreated.

Cereals and soya were stronger, however.

BASE METALS: Base metals rose, with nickel hitting a new peak since its first quotation in 1979, supported by low global supplies and the weak dollar.

The price of nickel climbed Friday to $33,500 per ton on the electronic platform of the London Metal Exchange (LME), the world's premier non-ferrous metals market.

It has now surged by 150 percent since the start of the year.

In thinner than usual trading conditions because of the US Thanksgiving holiday, base metals extended their recovery from the recent lows, with zinc and nickel leading the charge higher helped by a weaker dollar, UBS bank analyst Robin Bhar said.

Since base metals are traded in dollars, a weaker greenback boosts demand, and prices especially if supplies are limited.

LME base metals were all higher in quiet trade, with many market participants away until Monday because of the US Thanksgiving holiday, according to Michael Davies, analyst at Sucden brokerage house.Leading the way was nickel, which set a new all time high as stocks remained at extremely low levels, he said.

Other metals also gained.

Copper surpassed 7,000 dollars per ton and tin topped $10,000.

On the LME, the price of copper for delivery in three months was $7,040.50 per ton Friday, up from $6,690 a week ago.

Aluminum was $2,695 per ton, up from $2,615.

Zinc was quoted at 4,514.50 dollars per tonne, up from 4,080 dollars.

Nickel rose to 33,400 dollars per tonne from 29,395 dollars last week.

Tin was 10,075 dollars per tonne, up from 9,700 dollars.

Lead was quoted at 1,580 dollars per tonne, up from 1,494 dollars.

PLATINUM/PALLADIUM: The price of platinum also hit a record this week amid rumors about the possible launch of an exchange traded fund (ETF) for platinum, with palladium following in its wake.

We don't know if and how it's going to happen, according to Stephen Briggs, analyst at Societe Generale. If there were any significant buying for this ETF, it would cause grave disruption to the market.An ounce of platinum surged nearly 12 percent during the sole trading session on Tuesday, beating a new London record at 1,402.50 dollars. Its price fell back slightly amid profit taking.

The platinum market has been in deficit since 1999. Output is expected to hit seven million ounces in 2006, or 20,000 ounces below demand.

Though palladium also made gains, its climb was slowed by excess production for the sixth year in a row this year.

“Palladium looks set to remain within its 305-30 dollar range as above ground stockpiles cap the metals upside potential,” according to James Moore, of The Bullion Desk.

On the London Platinum and Palladium Market (LPPM), an ounce of platinum was worth 1,192 dollars Friday Friday evening, compared with 1,160 dollars the previous week. Palladium was 328 dollars, compared with 316 dollars.

GOLD: In the wake of the weaker dollar, gold traded Friday at $640.30, its highest level since September 6.

In the absence of strong fundamentals support at current price levels the future path of the euro and US dollar is likely to remain a key theme in the gold market over the next few months, said Costanza Jacazio, an analyst at Barclays.

On the London Bullion Market, an ounce of gold traded for 639.50 dollars at Friday evening's fixing, compared with 620.50 dollars the preceding week.

SILVER: With the weak dollar, the price of silver surged to 13.49 dollars an ounce Friday in London, the highest level since May 17, when its price of $15.22 was in turn its highest level in 15 years.

I remain bullish towards silver with investors and speculators still keen buyers, while base metal gains add background support, said Moore of The Bullion Desk.

Silver is both a precious and industrial metal, which explains why base metal movements affect its price.

On the London Bullion Market, silver traded at 13,37 dollars per ounce at the Friday fixing, compared with $12.75 a week ago.

OIL: Following a week of fluctuations, prices finished higher because of export problems in Alaska and Nigeria. Movements tended to be exacerbated with slower trading because of the Thansgiving holiday in the United States.

Prices began the week lower before rebounding by more than $1.30 on Tuesday, as bad weather interrupted exports from Alaska.

Loading of crude at the Valdez export terminal were suspended Monday, reducing by up to 75 percent deliveries through the Trans Alaska Pipeline.

Loading resumed gradually on Thursday.

Concern about supplies eased Wednesday when the US government announced an increase of 5.1 million barrels in crude stockpiles last week in the United States, or seven times more than expected by analysts.

However, the suspension of some exports from the Italian group ENI in Nigeria on Friday following a new separatist attack, sent prices back upward.

The increase in prices is curbed however by lingering skepticism over the intentions of the Organization of Petroleum Exporting Countries.

Opec was at pains to convince the market that it will follow through on a pledge to reduce output by 1.2 million barrels per day in November, and reduce it again in December.

In London, a barrel of Brent North Sea crude for January delivery traded at $60.07 around 1530 GMT Friday, compared with $58.99 from the previous Friday.

In New York, a barrel of crude for January delivery traded at 59.88 dollars in electronic trading, up from 58.97 dollars the previous week.

COFFEE: The price retreated in London but gained marginally in New York.

It fell to 1,409 dollars per tonne on Friday, its lowest level since mid-October, amounting to a significant correction from its peaks of more than 1,650 dollars two weeks ago.--AFP