The family's furniture, household appliances as well as the books and stationery of the children were destroyed in the April 16 floods
Oil rose nearly $1, moving close to $117 a barrel early on Thursday, dragging up grains, but commodity gains have slowed as consumers got their fill of bargains and those who had gambled on falling prices took their money off the table.
‘The fall in commodities has been driven by commodity trading advisor funds liquidating. The million dollar question is how long that selling will last?’ said Stephen White of Noah's Rule, an Australian-based treasury risk advisor.
‘The reality is that funds are de-leveraging and reducing positions in commodities. This has already happened in other markets -- look at the falls in equities.
He said although his outlook was bearish for the shorter term as world growth slowed, industrialisation in countries like China would continue to absorb vast quantities of raw materials, and higher production costs had lifted price floors.
‘This won't stop China from industrialising. There might be a slow down but fundamentally, base-line demand for these products remain.’
Despite in other marketsm base metals were flat, raising fears that the firmer dollar and a worsening outlook for global economic growth would continue to pile pressure on raw materials.
‘Chinese consumers are buying on dips, but the market is taking a very cautious tack and this might be a 'dead panda' bounce,’ ANZ's senior commodity analyst, Mark Pervan, said, speaking of base metals.
London Metal Exchange three-month copper fell $10 to $7,390 a tonne at 0651 GMT, after a 3.5 percent surge in the previous session, off Tuesday's six-month low of $7,120.
Pervan added: ‘Currencies, leading indicators and trade data are all pretty soft. Europe is starting to weaken and Japan is on the verge of a recession. Commodities thrive on good news and there is not much of that about.’
The dollar gained for a 10th straight day against a basket of currencies on Thursday, with investors cutting holdings of the euro and higher-yielding currencies as global economic outlook sours.
Data on Wednesday showed that Japan's economy contracted in the second quarter at the sharpest pace since its last recession in 2001, and the Bank of England also offered a bleak assessment of the outlook for growth in its quarterly inflation report.
GOLD UP
Gold, which struck an all-time high at $1,030.80 in March, has lost much of those gains to profit-taking, dipping to $830.55 an ounce. Prices came within a couple of dollars of $800 this week, an eight-month low.
‘Definitely there's a bit of bargain hunting, but I don't think we are out of gold's decline yet. Resistance should be around $836 and then $845. The downside, of course, will still be around the $800s,’ said a dealer in Singapore.
Crude oil rose by 76 cents to $116.76 a barrel, paring gains that followed falls in US crude and gasoline inventories on Wednesday.
US corn futures, tracking oil, also pared much of their early 3 percent gain.
September corn futures was trading 1.5 percent higher at $5.48-Ða bushel after rising as high as $5.55, while August soybean contract gained 1.3 percent to $12.79-Ða bushel.
‘Corn prices have fallen dramatically recently but concerns about weather conditions are back and oil prices are rising again, provoking strong buying interest,’ said a trader at KB Futures.
The family's furniture, household appliances as well as the books and stationery of the children were destroyed in the April 16 floods
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