Gold, tin prices hit record highs

October 09, 2010 | 16:43
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LONDON, October 8, 2010 (AFP) - Gold and tin hit record highs this week as the dollar slid on worries over the US economic recovery, with the weaker currency boosting demand, analysts said.

Investors are betting that the US authorities will have to take more stimulus measures to keep an unsteady recovery on track.

A weaker US currency tends to boost demand and prices for dollar-priced commodities such as metals and crude oil as they become cheaper for buyers using stronger currencies.

Supply concerns added to the price pressures on several commodities.

PRECIOUS METALS: Gold struck a series of record highs, with the top at 1,364.77 dollars an ounce on Thursday.

Sister metal silver reached its best level for 30 years, at 23.48 dollars an ounce and palladium hit a nine-year peak of 604 dollars an ounce.

Expectations of fresh stimulus "from the US central bank are helping to underpin prices, while worsening data could only tip policymakers' decision towards yet another liquidity boost for when the Fed meets in early November", said VTB Capital analyst Andrey Kryuchenkov.

By late Friday on the London Bullion Market, gold was higher at 1,341.50 dollars an ounce, up from 1,316 dollars a week earlier.

Silver advanced to 22.37 dollars an ounce from 21.95 dollars.

On the London Platinum and Palladium Market, platinum gained to 1,683 dollars an ounce from 1,679 dollars.

Palladium edged up to 572 dollars an ounce from 571 dollars.

OIL: Crude oil prices were carried higher this week on the back of the struggling dollar and ahead of next week's meeting of the OPEC oil cartel.

The US economy unexpectedly shed 95,000 non-farm jobs in September and unemployment remained stuck at 9.6 percent, government data showed Friday, highlighting the sluggish recovery.

"The release of US payrolls data ... did nothing to quell the uncertainty in the markets, coming out much worse than expected, dropping by 95,000 against an expectation of no change," said CMC Markets analyst Michael Hewson.

The nonfarm payrolls reading also marked a sharp decline from a revised 57,000 job losses in August.

"September's payroll report adds to the evidence that the (US) recovery is losing what little forward momentum it had -- and will harden the resolve of the more dovish Fed officials to press forward with another round" of stimulus, said Capital Economics analyst Paul Ashworth.

The oil market was also looking ahead to a meeting Thursday in Vienna of the The Organization of Petroleum Exporting Countries, which pumps 40 percent of the world's crude oil.

Analysts expect no change in output as the cartel's 12 members appear satisfied with current prices. OPEC meets periodically to set output levels with a view to supporting revenues and investment levels.

Ahead of the meeting, Iraq this week reported a 24-percent sharp rise in proven oil reserves to 143.1 billion barrels, ranking it number three in the world Saudi Arabia and Venezuela.

By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in November jumped to 84.30 dollars a barrel from 82.92 a week earlier.

On the New York Mercantile Exchange, Texas light sweet crude for November rallied to 82.83 dollars a barrel from 80.67 dollars.

BASE METALS: Base metals mostly advanced, with tin hitting a record high of 26,790 dollars a tonne on Wednesday, in part due to tight supplies.

"A culmination of positive factors, predominantly on the supply side of the market with production disruptions" notably in China and Indonesia boosted tin, said Barclays Capital analyst Gayle Berry.

By late Friday on the London Metal Exchange, copper for delivery in three months rose to 8,270 dollars a tonne from 8,159 dollars a week earlier.

Three-month aluminium climbed to 2,400 dollars a tonne from 2,371 dollars.

Three-month lead fell to 2,272 dollars a tonne from 2,308 dollars.

Three-month tin jumped to 26,300 dollars a tonne from 25,900 dollars from a week earlier.

Three-month zinc gained to 2,293 dollars a tonne from 2,230 dollars.

Three-month nickel rallied to 24,405 dollars a tonne from 23,900 dollars.

GRAINS AND SOYA: Grains and soya advanced after the US government lowered its harvest estimates, putting soya output at 92.76 million tonnes for 2010/11, down from an earlier prediction of 94.79 million tonnes.

The data "was extremely bullish (supportive)" for prices, said Dax Wedemeyer, an analyst for brokers US Commodities.

By Friday on the Chicago Board of Trade, maize for delivery in December jumped to 5.28 dollars a bushel from 4.65 dollars the previous week.

November-dated soyabean meal -- used in animal feed -- rose to 11.35 dollars a bushel from 10.57 dollars.

Wheat for December was up to 7.19 dollars a bushel from 6.55 dollars.

COFFEE: Coffee futures dropped on expectations of high crop yields in major producers Brazil and Vietnam.

By Friday on the New York Board of Trade (NYBOT), Arabica for delivery in December slid to 179.10 cents a pound from 182.95 cents the previous week.

On LIFFE -- London's futures exchange -- Robusta for January fell to 1,668 dollars a tonne from 1,751 dollars for the November contract last Friday.

COCOA: Cocoa traded mixed as analysts warned about the outlook in leading producer Ivory Coast.

"The weather has been mostly favourable so far to crop prospects in West Africa," said Macquarie analyst Kona Haque.

"However, with forecasts for heavy rains and upcoming elections in Ivory Coast, risks of disease and political unrest leading to supply losses or disruptions remain high."

By Friday On NYBOT, cocoa for delivery in December edged up to 2,779 dollars a tonne from 2,776 dollars a week earlier.

On LIFFE, cocoa for December fell to 1,857 pounds a tonne from 1,874 pounds.

SUGAR: Sugar futures hit eight-month highs of 683.20 pounds a tonne in London on Friday amid doubts about supplies.

"The expected surplus in 2010-11 is looking far less certain than it did just a few months ago on weather-related production downgrades," said Barclays Capital analyst Sudakshina Unnikrishnan.

By Friday on NYBOT, the price of unrefined sugar for delivery in March climbed to 26.40 US cents a pound from 23.57 cents a week earlier.

On LIFFE, the price of a tonne of white sugar for December stood at 681.90 pounds, compared with 603.50 pounds for the March contract.

RUBBER: Malaysian rubber prices rose as poor weather conditions hit supplies.

The Malaysian Rubber Board's benchmark SMR20 increased to 359.95 US cents a kilo from 347.25 cents a week earlier.


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