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Sugar strikes 2008 low, gold shines

Sugar strikes 2008 low, gold shines

LONDON: Many commodities faced a fierce sell-off earlier this week, rooted in demand fears arising from China’s slowdown, but later rebounded in line with equities after surprisingly strong US growth data.

World stock markets were hammered on Black Monday — with Shanghai collapsing by almost 8.50 per cent — as risk-averse investors dumped shares and many commodities over panic that the flagging Chinese economy could spark a new world recession.

Crude oil dived to 6.5-year lows but finished the week in positive territory after a Chinese rate cut and solid US GDP numbers.

The Bloomberg Commodity Index of 22 raw materials tumbled to a 16-year-low, with many markets plagued also by oversupply and rising production.

OIL: Prices collapsed Monday to levels last seen during the global financial crisis, with Brent and WTI sinking to $42.23 and $37.75 respectively. Prices then held close to six-and-a-half year lows on fears about slowing economic growth and faltering demand from top energy consumer China.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in October rallied to $47.20 a barrel from $45.91 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for October gained to $42.03 a barrel from $40.91.

PRECIOUS METALS: Gold scored a seven-week pinnacle at $1,170.34 per ounce on Monday as investors sought safety in the traditional safe haven.

However, gold fell back towards the end of the week, weighed down as the dollar advanced on solid US GDP data. By Friday on the London Bullion Market, the price of gold declined to $1,135 an ounce from $1,156.50 a week earlier.

Silver eased to $14.44 an ounce from $15.46. On the London Platinum and Palladium Market, platinum decreased to $1,003 an ounce from $1,028. Palladium slid to $573 an ounce from $610.

BASE METALS: Copper tumbled Monday to $4,855 per tonne — the lowest point since July 2009. There was also a six-year low for aluminium at $1,506 a tonne, last witnessed in June of the same year.

In addition, lead fell Monday to $1,618.50 a tonne, reaching a nadir last touched in June 2010. Zinc hit a similar low Wednesday at $1,673.

Some base metals pulled back into gains towards the end of the week. By Friday on the London Metal Exchange, copper for delivery in three months firmed to $5,086.50 a tonne from $5,043 a week earlier.

SUGAR: New York prices sank Monday to 10.13 US cents per pound, the lowest since June 2008, amid the broader commodities sell-off, before rebounding somewhat.

London prices had last week forged a 6.5-year low on the back of abundant supplies and the weak Brazilian Real currency.

By Friday on LIFFE, London’s futures exchange, a tonne of white sugar for delivery in October rose to $348.10 from $332 one week earlier.

On the ICE Futures US exchange, unrefined sugar for October advanced to 11.14 US cents a pound from 10.56 cents.

COCOA: Prices sank in line with turbulent global markets, plumbing low points last seen in May, before rebounding into slender gains.

By Friday on LIFFE, cocoa for delivery in December rose to 2,091 pounds a tonne from 2,073 pounds a week earlier.

On ICE Futures US, cocoa for December increased to $3,128 a tonne from $3,121.

COFFEE: The price of coffee touched multi-month lows, weighed down also by the strong dollar.

By Friday on LIFFE, Robusta for delivery in November reversed to $1,643 a tonne from $1,653 one week earlier. On ICE Futures US, Arabica for December stood at 124.75 US cents a pound compared with 132.60 cents one week earlier.

RUBBER: Prices fell in line with losses for regional futures markets. On Friday, the Mala­ysian Rubber Board’s benchmark SM­R­20 dropped to 128.50 US cents per kilo from 129.90 US cents last Friday.

Published in Dawn, August 30th, 2015

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