Base metals, oil down

Base metals and oil saw prices decline on Thursday, while precious metals were generally up on the day. The declines in base metals were principally due to the news that China had raised interest rates, triggering worries that commodities demand could decline in that Asian nation. The worries, and the declines, came even though some analysts maintained that higher interest rates would benefit commodity prices and non-Chinese companies in the long run.

Copper dropped 1.6 percent to $7,180 per tonne although supplies concerns are high over inventories that have dropped to very low levels. In addition, workers at a mine in Chile were scheduled to vote during the day on whether or not to strike.

Nickel was down 0.9 percent to $19,375 per tonne, despite a drop of 504 tonnes of inventory in London Metal Exchange warehouses and worries loomed of a strike at a Canadian facility.

Aluminium was down 1.6 percent to $2,791 per tonne, affected by another move by the Chinese government, this one to reduce electricity subsidies, which is expected to force smaller commodities producers to consolidate.

Zinc was down as well, by 3.9 percent to $3,230 per tonne.

In precious metals, gold added 0.2 percent to $639.80 per troy ounce after going as low as $628.20 and as high as $643 during the day. Silver was up by 0.9 percent to $12.92 per troy ounce on the news that the new iShares silver exchange traded fund will begin trading on Friday on the American Stock Exchange. Meanwhile, platinum hit a new record as it added 1.2 percent to $1,147 per troy ounce. Palladium was nearly unchanged at $362 per troy ounce.

Elsewhere, crude oil dropped for the fourth day in a row. June contract Brent crude on the International Petroleum Exchange lost 90 cents to $71.19 per barrel. West Texas Intermediate crude for June delivery was down 78 cents to $71.15 per barrel.

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