LONDON, Sept 9: Crude oil futures tumbled to five-month low points on easing supply concerns this week, leading to an erosion of gains won by precious metals.
On Friday, the Commodities Research Bureau’s index of 17 commodities fell to 322.18 points, from 328.90 points the previous week.
GOLD: The price of gold dropped to the lowest level for one and a half months, close to $600 per ounce, owing to weak oil prices and a rebounding dollar.
“With two of gold’s major anchors, oil prices and the dollar, working against the metal it was little wonder that gold fell, dragging the other precious metals lower,” UBS analyst John Reade said.
Gold is seen as a good hedge against rising inflation, which to a large extent tends to be fuelled by high oil prices.
Meanwhile, a strong dollar increases the cost of gold for buyers paying in other currencies, reducing demand for the precious metal.
Gold struck $640.58 per ounce on Wednesday, but slid to $607.20 Friday -- the lowest level since July 24.
On the London Bullion Market, gold prices slid to $610.00 per ounce at Friday’s late fixing, from $621.05 a week earlier.
SILVER: Silver prices followed a similar path set by sister metal gold.
After striking $13.27 per ounce on Tuesday -- the highest point since May 30 -- it fell to $11.99 on Friday.
On the London Bullion Market, silver prices eased to $12.22 per ounce at Friday’s fixing, from $12.75 the previous week.
BASE METALS: Base metal prices mostly gained, with copper rising above $8,000 per ton for the first time in a month.
Copper for three-month delivery on the London Metal Exchange rose to $8,110 per ton on Thursday, the highest reading since August 10.
Copper, used primarily in plumbing and the manufacture of electrical cables, hit an all-time record of $8,800 on May 11.
“We view this strength in prices as reflecting a growing view that copper market fundamentals are set to tighten as the end of the summer holiday period approaches,” Barclays Capital analyst Costanza Jacazio said.
Copper prices rose also despite full production being resumed this week at the world’s biggest copper mine in Chile after a strike there lasting almost one month.
The mine’s owner, Anglo-Australian mining group BHP Billiton, meanwhile said on Friday that it had made an offer to workers at its Spence copper mine in Chile in a bid to avoid another potentially damaging walk-out.
On Friday, three-month copper prices on the London Metal Exchange jumped to $7,851 per ton from $7,601 the previous week.
Three-month aluminium prices climbed to $2,640 per ton from $2,497.
Three-month nickel prices fell to $28,250 per ton from $28,800.
Three-month lead prices gained to $1,313 per ton from $1,232.
Three-month zinc prices advanced to $3,580 per ton from $3,451.
Three-month tin prices increased to $9,205 per ton from $9,015.
OIL: Brent North Sea crude on Friday tumbled below $66.0 per barrel for the first time since April 4, while New York’s light sweet crude hit $66.69 -- the lowest point since April 7.
Oil prices fell largely owing to expectations that Iran would not face economic sanctions over its nuclear programme any time soon.
They were pressured also by strong rises in US energy stockpiles, fading fears over the current Atlantic hurricane season and by an announcement from British energy giant BP that it might restore production sooner than expect at the biggest oil field in the United States.
On Friday in New York, a barrel of crude for delivery in October slumped to $66.75 per barrel from $70.35 the previous week.
In London, a barrel of Brent North Sea crude for delivery in October dived to $66.15 per barrel, from $70.40.
RUBBER: Rubber prices extended losses as speculators continued to exit the market owing to adequate supplies.
On TOCOM, Tokyo’s commodity exchange, natural rubber for February delivery dropped to 219.80 yen per kg on Friday, from 242.10 yen a week earlier.
Singapore’s RSS 3 January contract fell to 183.75 US cents per kg on Friday, from 201.25 US cents a week earlier.
SUGAR: Sugar prices rebounded strongly, especially in London where they climbed above $400 per ton on fund buying.
The previous week they had hit fresh low points for 2006 owing to abundant supplies.
In London on Friday, the price of white sugar reached $422.80 per ton -- the highest point for one month.
On LIFFE, the price of a ton of white sugar for October delivery jumped to $420, from $375.80 a week earlier.
On NYBOT, the price of unrefined sugar for October delivery stood at 11.98 US cents per pound, from 11.75 cents.
GRAINS AND SOYA: The price of wheat hit the highest level since May 2004 in London -- reaching 88.50 pounds per ton Friday -- owing to concerns that European harvest yields may not be as good as hoped.
Market watchers were meanwhile awaiting publication next Tuesday of output forecasts from the US government.
On the Chicago Board of Trade, the price of wheat for September delivery rose to $4.04 per bushel on Friday, from $4.00 a week earlier.
Maize for September delivery climbed to $2.32 per bushel on Friday, from $2.30.
September-dated soyabean meal -- used in animal feed -- dipped to $5.41 per ton on Friday, from $5.42.
On the LIFFE, the price of a ton of wheat for November delivery advanced to 88.00 pounds on Friday, from 86.70 pounds.
COTTON: Cotton prices slipped further owing to forecasts of a healthy world harvest, even amid an expected downwards revision to the US harvest caused by recent dry weather.
On the NYBOT, the December contract dropped to 53.13 US cents per pound on Friday, from 54.65 US cents a week earlier.
The Cotton Outlook Index of physical cotton stood at 59.60 US cents on Thursday, compared with 60.25 US cents a week earlier.
WOOL: Wool prices fell in leading producer Australia as the nation's dollar rose slightly against its US counterpart, making exports more expensive for buyers abroad.—AFP