Ukraine worries, US interest rate hike prospect rock prices

Commodities faced choppy trade last week, with gold torn between concerns over the Ukraine crisis and the prospect of a US interest rate hike in mid-2015.

By (AFP)

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Published: Sun 23 Mar 2014, 11:01 AM

Last updated: Fri 3 Apr 2015, 6:25 PM

Gold forged a six-month pinnacle as investors sought a safe haven from the growing Ukraine fears, before pulling lower as the dollar strengthened. Elsewhere, copper dived to a 3-1/2-year low on Chinese demand worries and coffee was dampened by the arrival of rain in Brazil, while cocoa zoomed to a 2-1/2-year peak on the back of stretched supplies, dealers said.

Precious metals

Gold jumped to another six-month high at $1,392.22 per ounce on Monday, as investors sought shelter from Ukraine and also US economic woes. Prices then sank on profit-taking, and as the dollar strengthened after the Federal Reserve hinted at an interest rate rise early next year. By late Friday on the London Bullion Market, the price of gold eased to $1,336 an ounce from $1,385 a week earlier. Silver dipped to $20.55 an ounce from $21.36. On the London Platinum and Palladium Market, platinum reversed to $1,439 an ounce from $1,478. Palladium grew to $789 an ounce from $780.

Base metals

Base or industrial metals prices diverged but copper tumbled to the lowest level since July 2010 on demand fears in key consumer China. By Friday on the London Metal Exchange, copper for delivery in three months rose to $6,508.50 a tonne from $6,469 week earlier. Three-month aluminium dropped to $1,719 a tonne from $1,733.50. Three-month lead advanced to $2,080 a tonne from $2,032.50. Three-month tin fell to $22,967 a tonne from $23,000. Three-month nickel increased to $15,955 a tonne from $15,921. Three-month zinc slipped to $1,956 a tonne from $1,979.25.

Oil

Prices fell on Monday as markets downplayed fears of disruptions to Western European energy supplies after Crimea voted in a disputed referendum to leave Ukraine and join Russia. US oil prices then surged on Tuesday on news of a key pipeline expansion that will help to draw down bulging crude supplies at the Cushing depot. New York crude extended gains on Wednesday after an inventory report showed supplies at the crucial Cushing trading hub fell 200,000 barrels to 29.8 million barrels a week ago. That compared with supplies of 49 million barrels a year earlier. Prices tailed off on Thursday as the dollar strengthened on raised expectations of a Fed rate hike sooner than previously thought. Heading into the weekend on Friday, the market won back ground on resurgent concerns over Ukraine. By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May eased to $107.51 a barrel from $107.58 a week earlier for the April contract. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April rose to $100.13 per barrel from $98.78.

Coffee

Prices fell sharply from recent heights, hitting three-week lows as traders banked profits and eyed predictions of heavy rains in key producer Brazil. By Friday on the ICE Futures US exchange, Arabica for delivery in May tumbled to 174.05¢ a pound from 203.75¢ a week earlier. On Liffe, London’s futures exchange, Robusta for May sank to $2,034 a tonne from $2,176.

Cocoa

Cocoa soared to 2-1/2-year highs on fears over keen demand and limited world supplies of the commodity that is mostly used to make chocolate. Cocoa hit £1,902 a tonne in London and $3,039 a tonne in New York, the highest points since September 2011. By Friday on Liffe, cocoa for delivery in May grew to £1,889 a tonne from £1,879 a week earlier. On ICE Futures US, cocoa for May eased to $2,985 a tonne from $3,006.

Sugar

Prices continued to push lower on easing concerns over dry weather in Brazil. By Friday on Liffe, the price of a tonne of white sugar for delivery in May decreased to $453 from $460.70 a week earlier. On ICE Futures US, the price of unrefined sugar for delivery in May fell to 16.98¢ a pound from 17.59¢.

Rubber

Prices in Kuala Lumpur declined on weak demand and high stockpiles in China and Japan, and amid the poor global economic backdrop. The Malaysian Rubber Board’s benchmark SMR20 fell to 190.95¢ a kilo from 197.35¢ last week.


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