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US economic recovery, while gold slid back under 1 ,000 dollars per
ounce on profit-taking. "It looks like there is a flood of money out
of commodities," said Ellis Eckland, an independent oil trader.
"Investors want to get to the exit as soon as possible; they feel
that the real economy is weak." Elsewhere, traders eyed the Group of
20 nations' two-day summit in Pittsburgh that begins on Thursday.
G20 leaders are promising tough action to police markets and prevent
a repeat of the global financial crisis. OIL: Crude oil prices
slumped on evidence of weak energy demand in key consuming nation
the United States. The market had shed more than three dollars on
Thursday as mixed US economic data and signs of sluggish oil demand
highlighted fears about a tepid recovery from the global recession.
Prices had already fallen almost three dollars on Wednesday in
reaction to a large jump in US crude oil inventories -- a sign that
energy demand remains weak. Worries about the pace of the US economic
recovery intensified after data Thursday showed existing home sales
fell 2.7 percent in August to 5.10 million units, snapping a
winning streak. On Wednesday, a widely-watched Department of Energy
report showed US crude reserves rose 2.8 million barrels in the week
to September 18 , against analysts' expectations of a decline. Stocks
of distillates, which include heating fuel, rose by three million
barrels last week. Distillates are being closely monitored ahead of
the northern hemisphere winter when demand for heating fuel peaks.
Energy demand has plunged after the global economy slipped late last
year into its worst recession since the 1930 s. This sent oil prices
tumbling from historic highs of more than 147 dollars in July 2008
to around 32 dollars in December. Prices have since recovered
somewhat but investors remain concerned over the pace of the upturn.
Oil prices had risen strongly above 70 dollars on Tuesday as the
European single currency struck a one-year high point above 1.48
dollars. But the dollar has since clawed back some ground. Since oil
is traded in the US currency, a weaker dollar makes the commodity
more attractive to holders of stronger units, leading to greater
demand and pushing prices higher. PRECIOUS METALS: Gold prices
retreated as traders cashed in gains from last week's strong rally
which saw the precious metal climb within a whisker of a record high.
Gold sank as low as 985.28 dollars per ounce on Friday, which was
the lowest point for more than two weeks. "The yellow metal started
to tumble, paying a heavy price for (the) decision to book profits,"
said ODL analyst Marius Paun. "A stronger US currency accompanied by a
steep decline in crude prices added to the downside pressure." The
previous week, gold had struck 1 , 024.28 dollars an ounce, which was
the best level since March 2008 when it hit a record 1 , 032.70.
Gold is regarded as a safe bet for investors to guard against
inflation, which is of growing concern following trillions of dollars
in borrowing by governments and radical measures including the
printing of new money. By late Friday on the London Bullion Market,
gold fell to 991.50 dollars an ounce from 1 ,012 dollars a week
earlier. Silver slid to 16.20 dollars an ounce from 17.11 dollars.
BASE METALS: Base metals prices mostly fell amid concerns about
Chinese demand tailing off. Three-month aluminium fell to 1 ,832
dollars a tonne from 1 ,929 dollars. SUGAR: Sugar futures fell after
reaching 28- year highs earlier this month. By Friday on LIFFE, the
price of a tonne of white sugar for delivery in December slid to 577
pounds from 582 pounds a week earlier. On NYBOT, the price of
unrefined sugar for March fell to 21.78 US cents a pound from 23.67
cents. GRAINS AND SOYA: Maize and wheat prices advanced but soya
pulled lower amid unease about frosty weather in key producer United
States. By Friday on the Chicago Board of Trade, maize for delivery
in December rose to 3.38 dollars a bushel from 3.18 dollars a week
earlier. November-dated soyabean meal -- used in animal feed --
decreased to 9.29 dollars from 9. 41 dollars. Wheat for December
rose to 4.72 dollars a bushel from 4.57 dollars. RUBBER: Malaysian
rubber prices dropped due to a quiet market amid the Eid al-Fitr
holiday, dealers said. On Friday, the Malaysian Rubber Board's
benchmark SMR20 fell to 208.30 US cents per kilo, from 209.70
cents last week.
