Crude oil rose to the highest ever on April 9, and the euro touched a record against the US dollar on Thursday, proving that the sliding greenback is still the main underlying driver of commodities, not demand or supply factors. Gold is up 11% so far this year and the euro has risen just over 8.3% against the US dollar, while oil is 14%.
But gold prices are down around 10% from the record $US1,033.90 an ounce reached on March 17, when the euro and oil set previous all-time highs. The metal rose 1.5% last week, despite traders' doubts. Comex June gold fell $US4.80 to $US927 in New York on Friday.
Silver futures for May delivery fell 35.3 cents, or 2%, to $US17.69 an ounce, capping a small fall for the week. It's still up 19% so far in 2008. Copper rose on Friday on the weaker dollar; traders ignoring the implications of the GE result. Thanks to financial investors copper prices have risen 30% so far this year while the dollar is down 6.3% against a weighted basket of six major currencies (The US Dollar Index) and off 8.3% against the euro.
Comex May copper futures rose 2.05 cents to $US3.9445 a pound in New York. But the price was down 0.3% this week, partly due to concern the metal could be pricing itself out of some usages at a time when demand is slowing and inflation a problem for manufacturers and other customers.
China's imports of copper and copper products in March rose to 240,634 tonnes from 226,908 tonnes in February; but that was sharply lower than the 307,723 tonnes in March 2007. Traders didn't stop to consider the implications of that fall: for whatever reason China has been consuming less copper.
China now accounts for around 24% of world copper consumption. China's lower imports are not being covered by higher production. The country only produces around 850,000 tonnes of copper a year. On the London Metal Exchange, three month copper rose $US20 to $US8,650 a tonne, or $US3.92 a pound.
Oil prices were little changed in New York after the International Energy Agency cut its 2008 global oil-demand forecast for a third straight month. The IEA reduced its outlook by 310,000 barrels to 87.23 million barrels a day, from last month. May crude oil rose 3 US cents to settle at $US110.14 a barrel on New York Mercantile Exchange. Prices rose 3.7% and are 77% above where they were a year ago.
In London Brent crude for May settlement rose 55 US cents to end at $US108.75 a barrel. That was a record closing price. Futures reached an all-time intraday high of $US109.98 a barrel on Thursday. New York crude hit a record $US112.21 a barrel on April 9.
Traders ignored the IEA's forecast that demand in the US will fall 410,000 barrels to 20.38 million barrels a day in 2008 because of the slowdown, the biggest decline of any country. But strong demand in parts of Asia and the Middle East will keep global consumption growth from slowing further, according to the IEA forecast.
Prices also fell after the United Nations predicted world wheat production would rise 6.8% to record 647 million tonnes this year, paving the way for a gradual recovery in tight global inventories. The Food and Agriculture Organisation said Friday that total world cereal production may rise 2.6% to 2.16 billion tonnes.
