Industrial metals rise, gold also gains
July 20, 2007: 01:20 PM EST
Jul. 20, 2007 (AFX International Focus) --
NEW YORK (AP) - Industrial metals prices extended their gains Friday as lead and tin hovered near all-time highs amid
concerns that global supplies may struggle to satisfy demand.
Elsewhere, oil prices gave back some of the week's gains, while prices in the precious metals and agriculture markets
ticked higher.
Strong growth in Asia has led to increased demand for the materials basic to industrial development, including copper
and the steel-coating metals nickel and zinc.
China reported Thursday its economy, measured by gross domestic product, grew at a torrid 11.9 percent in the second
quarter and outpaced the 8 percent targeted rate. Chinese demand for nickel, copper and other base metals has been
a key impetus behind the prices surges of the past two years.
The Shanghai Futures Exchange reported its weekly inventory levels on Friday, which showed a small drop in copper
stocks. The London Metal Exchange posted lower copper, lead, aluminum and zinc inventories, and prices climbed
across the complex.
Strikes at copper mines in Latin America have interrupted production in some cases, and the specter of supply
disruptions continues to hover over the market. Copper rose more than 2 percent on the LME and added 5.3 cents to
$3.715 a pound at midday on the New York Mercantile Exchange.
Speculative money has also been chasing the industrial metals, helping to exaggerate price moves in markets plagued
by tight supplies and strong demand. UBS (OOTC:UBSLF) (NYSE:UBS) analyst Robin Bhar said in a note Friday he
believes lead prices are overvalued and a correction is in order. Lead swelled nearly 5 percent on the LME.
In the precious metals market, a weaker U.S. dollar spurred gold prices higher. Gold often serves as a safe-haven asset
for investors concerned by currency depreciation. As the euro and British pound rose against the dollar, gold for August
delivery gained $5.40 to $683.50 an ounce on the Nymex.
Nymex September silver rose 5.5 cents to $13.43 an ounce.
Meanwhile, energy futures faltered, as August light, sweet crude shed 36 cents to $75.56 a barrel and August gasoline
slipped 2.81 cents to $2.1633 a gallon. Crude oil prices, which have piled on almost $2 a barrel since the start of the
week, made a brief move over $76 in earlier trading before falling back. Gas futures, meanwhile, have declined in six of
the past seven trading sessions.
A report from the Energy Information Administration on Wednesday showed that the nation's refineries have been
ramping up use of refining capacity, which should lead to increased demand for crude oil and more ample supplies of
products including gasoline.
In Chicago, agriculture futures trading was volatile amid a forecast for hot, dry weather in the U.S. Midwest. After last
Friday's predictions for hot, dry weather were subsequently washed out by rains across the Corn Belt, 'nobody knows
what to do with today's hot and dry forecast,' said John Roach of Roach Ag. Marketing Ltd., in a daily report.
Weather that is too hot or dry can hurt a corn or soybean crop during its crucial pollinating period. December corn was
quoted up 2 cents to $3.3825 a bushel at midday on the Chicago Board of Trade. November soybeans were flat at
$8.82 a bushel, while September wheat dipped 3.5 cents to $6.165 a bushel.
Additional Articles For further study:
"Dollar Gains Against Euro; Yen as US Stock Futures Rebound" Bloomberg 7/25/07
"Asian Stocks Rebound; Led by JFE Holdings" Bloomberg 7/30/07
"Dollar Decline Looks Set to Resume Next Week" FX Outlook 7/27/07
"Inflation in India; How to Tackel it" Rediff 3/21/07
"The Coming Collapse of the US Dollar" Rediff 6/11/07
“Signs of the Times” by Dr. Irwin Kellner
“Fed Chickens Out” by MoneyNews.com editors
“Gold, What's Next” by Mary Anne and Pamela Aden 7/25/07
“Industrial Metals Rise - Gold Also Gains" 7/20/07
“GOLD: Big Picture Focus” by Mary Anne and Pamela Aden
"Oil Rebounds Following Decline of the Dollar" 727/07
"Set to Resume Next Week" by FX Outlook 7/27/07
"The Faultlines in the Economy" by Alan Maas
"U.S. Current-Account Deficit Deserves Some Noise" by John M. Berry
"Why the sudden dollar plunge?" By John Stepek, MoneyWeek
If you have any questions regarding these or any other articles you've read, feel free to contact
me by calling me directly David Hellier at (877) 314-COIN (2646) or email me anytime at
dave@gold-precious-metals-ira.com.