Monday, December 28, 2009

Large Part of Crude Rally Was Due to Investment Flow

Commodity prices stay strong in European session as USD retreats against major currencies. The benchmark contract for gold climbs to 1113 and is likely to record a third day of increases. On weekly basis, the yellow metal is anticipated to gain for the first time in 5 weeks.

Base metals stay strong after rallying for 2 weeks. While the LME is still closed, copper futures in Comex and Shanghai Futures Exchange (SFE) advance. Strong industrial production in Japan and labor action in copper mine suggest supply/demand condition to tighten further.

Copper price April delivery on the SFE surged to a 16 month high at RMB 59180 (+2.3%) after Japan's IP report, the contract closed at RMB 5830, up +1.1%, for the day. In Chile, workers at Codelco's Chuquicamata mine decided to go on strike next month as they are discontent with the company's wage offer. The company offered a +3.8% wage increase and benefits worth 14.5 peso to sign a new 3 year contract but this has been rejected by the workers already.....Read the entire article.

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