Oil, gold prices hit multi-month highs

LONDON, United Kingdom – Oil and gold prices hit multi-month peaks this week on improved demand prospects in the world’s two biggest economies, the United States and China, and owing to a weaker dollar.

OIL: Global crude prices rallied on improving US demand prospects.

On Wednesday, US crude struck the highest level for 4 months at $100.37 a barrel, while Brent achieved the steepest peak since the start of year at around the $110 a barrel mark.

“Renewed concerns of colder weather in the US bolstered support” for New York prices, said Kash Kamal, research analyst at Sucden brokers.

World oil markets are unexpectedly tight as growth in advanced economies picks up, the IEA warned on Thursday, urging the OPEC cartel of crude producing countries to skip a seasonal output drop as stocks touch six-year lows.

The International Energy Agency (IEA) said a pick up in demand in advanced countries, led by the United States, has more than compensated for a slowing of emerging market consumption.

The IEA, energy market analysis arm of the OECD group of advanced democracies, put much of that switch down to the rebound in the United States and the tightening of US monetary conditions which has sparked turmoil in emerging markets.

Oil price support this week came also from a rise in Chinese crude imports.

Chinese data released on Wednesday showed the world’s top energy consumer imported a record 6.63 million barrels of crude oil per day in January, up 5.2% from December.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in April stood at $108.38 a barrel compared with $108.01 for the expired March contract a week earlier.

On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for March gained to $99.98 a barrel from $98.13.

Gold Shines

PRECIOUS METALS: Gold hit a 3-month peak at $1,321.52 an ounce – the highest point since November 7.

Sister metal silver also reached a 3-month high at $21.30 an ounce.

“Precious metals are continuing to make up ground lost during last year’s slump,” said Fawad Razaqzada, analyst at traders Forex.com.

“The weaker dollar is continuing to support both metals. This week we have seen even more underwhelming US economic pointers such as retail sales and unemployment claims.”

A weaker US currency makes dollar-denominated commodities cheaper for buyers holding rival currencies.

China’s gold consumption soared 41.36% in 2013, industry data showed this week, with state media reporting Tuesday that the country has probably overtaken India as the world’s largest consumer of the precious metal.

Last year, China consumed 1,176.4 tons of the yellow metal, the China Gold Association said in a statement.

By late Friday on the London Bullion Market, the price of gold rallied to $1,320 an ounce from $1,259.25 a week earlier.

Silver jumped to $21.09 an ounce from $19.87.

On the London Platinum and Palladium Market, platinum grew to $1,426 an ounce from $1,379.

Palladium gained to $740 an ounce from $711.

BASE METALS: Base or industrial metals prices mostly climbed in the wake of robust Chinese import data.

“Although China’s imports of many commodities reached new record highs… this headline can be written most months. Indeed, the data were probably flattered by demand brought forward ahead of the relatively early Chinese New Year,” said Thomas Pugh, analyst at consultants Capital Economics.

China imports jumped 10% to $175.27 billion in January but its trade surplus still surged as exports strengthened markedly.

By Friday on the London Metal Exchange, copper for delivery in three months rose to $7,158.50 a ton from $7,143 week earlier.

Three-month aluminium climbed to $1,751.75 a ton from $1,722.

Three-month lead advanced to $2,140 a ton from $2,132.

Three-month tin gained to $22,930 a ton from $22,160.

Three-month nickel increased to $14,295 a ton from $14,140.

Three-month zinc fell to $2,044.75 a ton from $2,064.

Cocoa strikes new heights

COCOA: Prices struck fresh 2.5-year highs with supplies of the commodity in deficit.

Cocoa peaked at £1,871 a ton in London and $2,977 a ton in New York.

With demand exceeding supply, “there is also talk of some losses in Indonesia and other countries in southeast Asia from recent heavy rains”, said Jack Scoville, analyst at brokers Price Futures Group.

By Friday on LIFFE, London’s futures exchange, cocoa for delivery in May stood at £1,851 a tonne compared with £1,850 for the March contract a week earlier.

On the ICE Futures US exchange, cocoa for May traded at $2,959 a tonne compared with $2,896 for the March contract.

COFFEE: The price of coffee stayed around multi-month highs on dry weather in Brazil that threatens to reduce output in the country, which is the world’s biggest producer and exporter of the commodity.

Recent price surges are the result of “concerns about the impacts of the drought on the Brazilian coffee supply” noted analysts at Commerzbank.

By Friday on ICE Futures US, Arabica for delivery in May stood at 141 US cents a pound compared with 136.60 cents for the March contract a week earlier.

On LIFFE, Robusta for May traded at $1,802 a ton compared with $1,829 for the March contract.

SUGAR: Prices advanced in London and New York, winning continued support from drought conditions in Brazil.

By Friday on LIFFE, the price of a tonne of white sugar for delivery in May stood at $441 compared with $432.50 for the March contract a week earlier.

On ICE Futures US, the price of unrefined sugar for delivery in May traded at 15.94 US cents a pound compared with 15.68 US cents for the March contract.

RUBBER: Prices rebounded on higher demand after recent losses caused by robust supplies.

The Malaysian Rubber Board’s benchmark SMR20 jumped to 194.45 US cents a kilo from 186.15 cents last week. – Rappler.com