January 27, 2008	Sunday	Muharram 17, 1429

LONDON, Jan 26: Volatility gripped commodity markets this week as fears of a US recession gave way to hope for the world’s biggest economy.

Gold and platinum prices struck historic heights on Friday as investors once more bought up commodities as stock markets continued to recover from heavy falls seen earlier in the week.

By Friday, oil futures were little changed from a week earlier but that masked what was a roller-coast ride for black gold.

PRECIOUS METALS: Gold and platinum prices struck record highs Friday on renewed buying amid a recovery for equity prices and power shortages in South Africa.

Gold hit an all-time peak of $923.73 an ounce on the London Bullion Market.

Platinum recorded an historic high of $1,701 an ounce on the London Platinum and Palladium Market.

The precious metals beat their previous record highs, of more than $900 for gold and just under $1,600 for platinum, achieved earlier this month.

South Africa is experiencing major power supply interruptions, noted analysts at Barclays Capital on Friday.

South Africa produces 78 percent of the world’s platinum primary supplies, and a raft of suspensions at major operations has further driven platinum prices to record highs (...) Gold mines have also suffered, they added.

Three of South Africa’s biggest gold producers said Friday they had suspended production because of an electricity crisis hampering the country.

Gold Fields, Harmony and AngoGold Ashanti acted after energy group Eskom said it could not guarantee power to their mines.

South Africa, the world’s biggest gold producer, has been badly hit by power cuts since the start of the year with the government acknowledging on Friday that the situation had become a national emergency.

Gold prices meanwhile began soaring at the start of January as the dollar weakened heavily. Events on foreign exchange markets encouraged demand for gold because it made the precious metal cheaper for buyers using stronger currencies.

Meanwhile geopolitical turmoil also attracted investors to gold because the metal is regarded as a safe-haven. It also guards against rising inflation caused largely by soaring crude oil prices.

Gold should continue to rise in the near term as investors, who exited positions in gold in recent days to cover losses in equity markets, look to re-enter the market, Perrine Faye of the bulliondesk.com said Friday.

Elsewhere, silver struck a 27-year high of $16.61 an ounce on the back of gold’s rise.

On the London Bullion Market, gold rallied to $918.25 at Friday’s late fixing from $882 a week earlier.

Silver jumped to $16.53 an ounce from $15.82.

On the London Platinum and Palladium Market, platinum soared to $1,681 an ounce at the late fixing Friday from $1,560 a week earlier.

OIL: Oil prices tumbled at the start of the week on concerns about a recession in key energy consumer the United States.

But they began rebounding on Thursday in line with global stock markets, which surged despite fresh market nervousness caused by a massive 7.15-billion-dollar fraud-related loss at French banking giant Societe Generale.

Prices rallied above $90 a barrel on Friday.

Economic fears continue to dominate (oil) headlines, but unless the economic situation deteriorates even further and we see more heavy losses on global equity markets, crude should remain firm in the longer run, said Sucden analyst Andrey Kryuchenkov.Equities began spiking after the US Federal Reserve decided to slash US borrowing costs by a huge 75 basis points to 3.50 per cent, in an emergency and unprecedented move amid recession concerns.

Stock markets were also buoyed by a quick agreement by US leaders on a stimulus package worth $ billion for the troubled American economy.

Oil traders said rapid economic growth in China -- a major consumer of oil -- also offered support to crude prices this week.

China’s economy grew a blistering 11.4 per cent in 2007, reaching the highest level in 13 years and marking the fifth straight year of double-digit growth, the government said Thursday.

Fears of a recession in the United States, the world’s biggest energy consumer, has led the market to believe that oil demand could fall sharply, even in China, whose roaring economy is feeding on vast quantities of crude.

BASE METALS: Base metals price were mixed once more amid fears a US recession could hurt demand. Losses were limited by China’s strong economic growth figures.

China continues to remain one bright spot amidst all the doom and gloom,said UBS analyst Robin Bhar.

On Friday, copper for delivery in three months edged up to $7,110 a ton on the London Metal Exchange from $7,100 a week earlier. Three-month aluminium prices rose to $2,515 a ton from $2,447.

Three-month nickel fell to $27,200 a ton from $28,075.

Three-month lead gained to $2,660 a ton from $2,580.

Three-month zinc dropped to $2,285 a ton from $2,320.

Three-month tin increased to $16,500 a ton from $16,475.

COCOA: Cocoa prices rebounded on concerns over supply difficulties in leading producer Ivory Coast.

By Friday on the LIFFE, London’s futures exchange, the price of cocoa for March delivery climbed to 1,145 pounds a tonne from 1,111 pounds a week earlier.

On the New York Board of Trade (NYBOT), the March cocoa contract rallied to $2,212 a ton from $2,134.

COFFEE: Coffee prices ended the week mixed.

By Friday on the LIFFE, Robusta quality for March delivery rose to $2,027 a ton from $1,900 a week earlier.

On the NYBOT, Arabica for March delivery fell to 131.95 US cents a pound from 134.10 cents.

SUGAR: Sugar prices dropped, ending a run higher lasting six weeks when the commodity drew strength from demand for ethanol, a cheap biofuel alternative to motor fuel.

By Friday on the LIFFE, the price per tonne of white sugar for March delivery dropped to 332.60 pounds from 345.20 pounds a week earlier.

On the NYBOT, the price of unrefined sugar for March delivery slipped to 11.59 US cents a pound from 12.23 cents.

GRAINS AND SOYA: Prices of grains rose while soya fell.

By Friday on the Chicago Board of Trade, March-dated soyabean meal -- used in animal feed -- was at 12.44 dollars, down from 12.57 dollars.

The price of maize for March delivery rose to $5.01 dollarsa bushel from $4.95 a week earlier.

Wheat for March delivery jumped to $9.33 a bushel from $9.09.

On LIFFE, the price per tonne of wheat for May delivery climbed to 188.40 pounds from 183.50 pounds a week earlier.

—AFP