Base metals, crude oil up; precious metals lower

| April 13, 2006 | 0 Comments

Precious metals saw their prices decline on Thursday, but base metals reached new highs and crude oil headed up again on continuing worries about Iran and Nigeria.

Gold declined ahead of the long weekend, closing at $594.00/$594.80 per troy ounce in London. Profit-taking was responsible for the downturn in prices, but the declines were limited by rising oil prices and political concerns. Additionally, analysts still believe that the trend is toward higher gold prices that might even go beyond the 1980 high of $850 per troy ounce.

In other precious metals, silver dropped to $12.69/$12.72 per troy ounce and platinum was down to $1,077/$1,082 per troy ounce.

Copper added 0.7 percent to trade at a new record high of $6,145 per tonne on supply worries. Grupo Mexico said on Wednesday that while it could fulfill its April contracts for copper, it cannot guarantee supplies after that because of an ongoing strike at its La Caridad mine. Additionally, inventories in Lonton Metal Exchange warehouses were reported to be down by another 100 tonnes.

Zinc was up to a record $3,018 per tonne during the day before declining slightly to trade at $3,010 even though the London Metal Exchange reported that its zinc inventories had gone up by 8.6 thousand tonnes. However, total stockpiles were still at less than half that of a year ago, at 273,225 tonnes and are expected to decline further.

Crude oil prices were up on worries that supplies will become tighter as demand rises, especially in light of continuing uncertainties over supply problems in Nigeria, Russia, and some non-OPEC producers. The International Energy Agency said that in order to meet demand, OPEC will need to increase production this year. The continuing situation in Iran over its uranium enrichment program also contributed to the rise in prices.

Brent crude June contracts on the International Petroleum Exchange were up 36 cents to $70.22 per barrel. Brent reached a record $70.30 per barrel in earlier trade during the day. Meanwhile, May delivery West Texas Intermediate crude added 28 cents to $68.90 per barrel on the New York Mercantile Exchange.


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