Sun, May 19, 2013 - Page 15 News List

Commodities mainly retreat on US dollar strength

AFP, LONDON

Commodity prices mostly weakened this week, hit by a stronger US dollar and falling demand for raw materials amid persistent concerns about the state of the troubled global economy, analysts said.

Figures published on Wednesday revealed that the recession dogging the eurozone has snared key economy France.

In Brussels, French President Francois Hollansade tipped “zero” growth on the national level, blaming an EU-wide, German-led austerity trap and hitting out at banks for holding back on lending.

OIL: Crude futures won late support from talk of a potential scaling back of US stimulus measures despite a stronger US dollar making crude more expensive for holders of rival currencies, analysts said.

Markets also shrugged off disappointing US economic data, as speculation is increasing that the US Federal Reserve is mulling an exit to its quantitative easing stimulus policy.

On Wednesday, oil prices recovered from sharp early losses to finish higher on news that US stockpiles had eased from record levels.

US crude stocks fell by 600,000 barrels the previous week, suggesting a slightly tighter market.

Stocks nevertheless remained high at 394.9 million barrels, and worries of soft global demand amid rising supplies continued to cast a shadow over the markets.

OPEC boosted production to 30.21 million barrels a day last month from 29.93 million in March.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in July stood at US$104.47 a barrel compared with US$102.42 for the expired June contract a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for June grew to US$95.64 a barrel from US$94.25.

PRECIOUS METALS: Prices slid further as traders continued to switch money into equities.

“Gold prices continue to come under pressure and look set to test US$1,300 as more high-profile investors pared back their holdings of the yellow metal,” said Michael Hewson, analyst at CMC Markets trading group.

“With inflation falling back across the globe a lot of investors are winding back their gold exposure and putting their cash to work in higher yielding and more risky assets like equities and peripheral sovereign bonds. Silver prices are also coming under increasing pressure,” he added.

By late Friday on the London Bullion Market, the price of gold slid to US$1,368.75 an ounce from US$1,426.50 a week earlier.

Silver dropped to US$22.52 an ounce from US$23.37.

On the London Platinum and Palladium Market, platinum fell to US$1,470 an ounce from US$1,490.

Palladium rose to US$736 an ounce from US$702.

BASE METALS: Base or industrial metal prices mostly declined.

“There does not seem to be any kind of spark to lift metals higher, at least for now,” INTL FCStone analyst Ed Meir said.

By Friday on the London Metal Exchange, copper for delivery in three months dropped to US$7,330 a tonne from US$7,375 a week earlier.

Three-month aluminum slid to US$1,857 a tonne from US$1,870, while three-month lead rose to US$2,008 a tonne from US$1,996.

Three-month nickel fell to US$14,830 a tonne from US$15,415, while three-month tin rose to US$20,940 a tonne from US$20,849.

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