A big week for commodities last week as yield and profit hungry financial investors continue to pile into the sector desperate for performance after the disasters of credit markets.
Gold set an historic high above $US975 on Friday, as speculators chased it higher, despite the late climb in the US dollar against the euro.
The driving force was more fears about the US economy and worries about financial stocks, including America’s biggest insurer, AIG, which reported a big loss from credit derivatives, sparking worries about its health.
The late strength in the greenback saw traders take profits, while silver jumped to a 27-year peak near $US20 an ounce before falling. Palladium surged nearly 4 percent to its highest price in over six years.
Comex gold set a record for the third day in a row, hitting $US975.90 an ounce before falling to $US975 an ounce for the April contract. The spot month, March, finished at $971.10, both new record closes.
Gold has risen 16% this year on the top of 2007’s 32% rise.
Silver rose to $US19.92 an ounce on Comex before falling to $19.808 for March spot and $US19.861 for April delivery.
Platinum hit a high of $US2,161 an ounce and was ended at $US2,158 for the spot month and last week’s record of $US2,192.
………………………………………..
Sugar rose to its highest level in 18 months after Federal Reserve Chairman Ben Bernanke urged the US to cut tariffs on imports of cane-based ethanol from Brazil, the world’s largest producer.
Brazil used more than half of its sugar-cane crop to make ethanol for domestic consumption, instead of for human use.
The call came as oil prices returned to over the $US101 a barrel level.
The US imposes a tax of 54 US cents a gallon on ethanol from Brazil to protect the locally made ethanol, which is sourced from corn.
The tariff has allowed a number of big companies, such as Archer Daniel Midland and Cargill establish large ethanol businesses, while there’s a fleet of smaller operation which are now struggling as corn prices hit record levels.
The tariff is due to finish at the end of this year but it’s an election year, so you’d have to bet on it being extended if only for crass political gain and not any economic or business reason.
Sugar futures for May delivery finished at 14.69 US cents a pound in New York after touching 14.83 US cents, the highest for a most-active contract since August 2006.
Mr Bernanke told the US Congress on Thursday that he favoured open trade. "I think that allowing Brazilian ethanol, for example, will reduce costs.” If commodity prices come down, including energy prices and raw-food prices, I would expect to see finished-food prices come down as well.”
Including Friday’s gain, sugar prices have risen by more than 35% so far this year, thanks mainly to the activity of speculators, hedge and index funds.
Oil prices fell Friday after hitting a surging new record.
Oil set successive record highs from Tuesday to Friday last week, driven by the falling US dollar and financial investors playing in the market.
The US dollar hit a record low of $US1.5239 per euro on Friday but then rebounded to $1.5195 as Wall Street fell sharply on more financial worries.
There was a late surge of worried money into US bonds which tumbled to just over 3.50% for 10 year securities and this bolstered the dollar.
Nymex April crude fell 75 US cents by the end on Friday to $US101.84 a barrel ; that was after it touched an all time high of $US103.05 a barrel Oil rose 3.1% last week and are up 65% on a year ago.
In London April Brent crude lost 80 US cents to $US100.10 a barrel. It reached a record $US101.27 a barrel Friday.
Turkish troops withdrew from northern Iraq after the biggest military incursion into the country in 11 years, easing concerns and OPEC countries meet next week and may decide to maintain supply at a meeting on March 5, ignoring calls for stepped up output.
Copper prices fell as stockpiles in Shanghai rose for a third week, and worries about the health of demand from the faltering US economy overcame the aggressive dealing by financial investors.
Dealers said that stocks tracked by the Shanghai Futures Exchange rose 8% last week; an indication that Chinese demand is slowing after the quick buying to bolster supplies during the bad weather of a month ago.
Shanghai stocks were up 3,700 tonnes, which would support traders who though the drawdown of London Metal Exchange stocks was being matched by the build up in China as stock flowed there to cover any possible tightening in demand as a result of the bad weather.
May copper futures fell 2.3 US cents to $US3.855 a pound on Comex after hitting $US3.9105, on Thursday. That was the highest for a most-active contract since May 15, 2006. The metal rose 1.4% last week and is 40% above where it was a year ago.
Copper stockpiles in Shanghai totalled 48,885 tonnes, including the latest increase. Stocks monitored by the LME rose 2,050 tonnes 143,650 tons for the week, even after a 1,200-tonne fall Friday.
On the LME, three month copper dropped $US80 to $8,430 a ton.
Three month LME nickel hit $US32,050 a tonne, the highest since November and closed Friday at $US31,595, up $US495 from Thursday on reports that BHP’s Cerro Matoso nickel mine in Columbia may be the subject of strike action by its workers."
It’s not clear how long the strike will last at the mine, which produces 55,000 tonnes of ferronickel annually, or about 4% of the world’s nickel.
Tin eased from the record high of $US18,900 per tonne it reached Thursday, closing at $US18,750 versus $US18,850 the day before.
Aluminium fell $US44 to close at $US3,106, after hitting its highest since May 2006 on Thursday. Zinc ended at $US2,740 a tonne against $US2,795 on Thursday.
In C
