Commodity prices rallied to multi-month highs this week on increasing signs that the worst of the world recession may be over.
“The recent surge in commodity prices appears to have been driven primarily by hopes of a strong recovery in the global economy,” Capital Economics analyst Julian Jessop said.
“However, there are still many reasons to be cautious. For a start, although some commodity firms have undoubtedly taken advantage of lower prices to rebuild stocks in anticipation of a pick-up in final demand, that increase in demand has yet to materialize,” he said.
OIL: New York crude oil hit US$70 for the first time in seven months on Friday as the US dollar slid on news of a dramatic slowdown in US job losses, traders said.
New York crude spiked to US$70.32 a barrel, the highest level since Nov. 4. It later retreated sharply as the dollar recovered.
“This initial rally in crude looks to have failed,” aided by a recovering dollar, said Adam Klopfenstein, senior market strategist at Lind-Waldock.
A struggling US currency makes dollar-priced crude cheaper for buyers holding stronger currencies, in turn stimulating demand and pushing up prices. When the dollar strengthens the reverse tends to apply.
After plunging from record highs above US$147 last July on supply concerns, oil prices touched multi-year lows in December, at one point nearing US$32 a barrel, as the economic slowdown crushed demand for energy.
On Friday, on the New York Mercantile Exchange (NYMEX), light sweet crude for delivery in July closed at US$68.44 a barrel from US$65.94 a week earlier. It was down US$0.34 from Thursday, after a jump to US$70.32 a barrel, the highest level since Nov. 4.
On London’s InterContinental Exchange (ICE), Brent North Sea crude for July climbed to US$68.34 a barrel from US$65.05 a week earlier. Brent crude fell US$0.37 from Friday, having spiked as high as US$69.91.
PRECIOUS METALS: Gold prices approached US$1,000 an ounce before traders cashed in their gains late on. By late Friday on the London Bullion Market, gold fell to US$962 an ounce from US$975.50 a week earlier.
Silver rose to US$15.65 an ounce from US$15.52.
On the London Platinum and Palladium Market, platinum climbed to US$1,275 an ounce at the late fixing on Friday from US$1,175.
Palladium jumped to US$257 an ounce from US$236.
GRAINS AND SOYA: Soya and grains prices traded mixed.
By Friday on the Chicago Board of Trade, maize for delivery in July rose to US$4.45 a bushel from US$4.36 a week earlier.
July-dated soyabean meal — used in animal feed — increased to US$12.29 from US$11.84.
Wheat for July fell to US$6.28 a bushel from US$6.37.
NO-LIMITS PARTNERSHIP: ‘The bottom line’ is that if the US were to have a conflict with China or Russia it would likely open up a second front with the other, a US senator said Beijing and Moscow could cooperate in a conflict over Taiwan, the top US intelligence chief told the US Senate this week. “We see China and Russia, for the first time, exercising together in relation to Taiwan and recognizing that this is a place where China definitely wants Russia to be working with them, and we see no reason why they wouldn’t,” US Director of National Intelligence Avril Haines told a US Senate Committee on Armed Services hearing on Thursday. US Senator Mike Rounds asked Haines about such a potential scenario. He also asked US Defense Intelligence Agency Director Lieutenant General Jeffrey Kruse
INSPIRING: Taiwan has been a model in the Asia-Pacific region with its democratic transition, free and fair elections and open society, the vice president-elect said Taiwan can play a leadership role in the Asia-Pacific region, vice president-elect Hsiao Bi-khim (蕭美琴) told a forum in Taipei yesterday, highlighting the nation’s resilience in the face of geopolitical challenges. “Not only can Taiwan help, but Taiwan can lead ... not only can Taiwan play a leadership role, but Taiwan’s leadership is important to the world,” Hsiao told the annual forum hosted by the Center for Asia-Pacific Resilience and Innovation think tank. Hsiao thanked Taiwan’s international friends for their long-term support, citing the example of US President Joe Biden last month signing into law a bill to provide aid to Taiwan,
China’s intrusive and territorial claims in the Indo-Pacific region are “illegal, coercive, aggressive and deceptive,” new US Indo-Pacific Commander Admiral Samuel Paparo said on Friday, adding that he would continue working with allies and partners to keep the area free and open. Paparo made the remarks at a change-of-command ceremony at Joint Base Pearl Harbor-Hickam in Hawaii, where he took over the command from Admiral John Aquilino. “Our world faces a complex problem set in the troubling actions of the People’s Republic of China [PRC] and its rapid buildup of forces. We must be ready to answer the PRC’s increasingly intrusive and
STATE OF THE NATION: The legislature should invite the president to deliver an address every year, the TPP said, adding that Lai should also have to answer legislators’ questions The Chinese Nationalist Party (KMT) yesterday proposed inviting president-elect William Lai (賴清德) to make a historic first state of the nation address at the legislature following his inauguration on May 20. Lai is expected to face many domestic and international challenges, and should clarify his intended policies with the public’s representatives, KMT caucus secretary-general Hung Meng-kai (洪孟楷) said when making the proposal at a meeting of the legislature’s Procedure Committee. The committee voted to add the item to the agenda for Friday, along with another similar proposal put forward by the Taiwan People’s Party (TPP). The invitation is in line with Article 15-2