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Central bank gold sales unlikely to fill quota, analyst says
By Chris Flood and Delphine Strauss
Financial Times, London
Saturday, January 28, 2006
http://news.ft.com/cms/s/51b4e430-8fab-11da-b430-0000779e2340.html
Silver set the pace for commodity markets this week, reaching a 22-
year high of $9.76 a troy ounce yesterday, on hopes that a new
exchange traded fund (ETF) would attract significant investor
interest.
Barclays Global Investors is awaiting US regulatory approval for a
silver ETF, and this generated higher trading volumes.
Silver rose 7.9 per cent over the week to $9.56/$9.59a troy ounce
and dealers reported buying of March silver options at $12 yesterday.
"There is a serious risk that the silver price could ramp up by 25
per cent over the next couple of months, driven by supply concerns,"
said Paul Merrick at RBC Capital Markets. With inventories low and
falling, some fear an ETF could drive the market into a serious
deficit.
Gold ETFs, which allow investors to trade without the inconvenience
of having to store or deliver the physical metal, have grown rapidly
over the past year to accumulate 424.7 tonnes.
Gold traded at $557.00/$557.75 a troy ounce, below its recent 25-
year high of $567.60. Dealers said the price had held up well in a
volatile week with much lower volumes traded.
Platinum hit a record $1,065 per troy ounce yesterday after a gain
of 3.2 per cent this week, helped by positive investor sentiment,
strong price momentum and expectations that diesel engines would win
market share in the US.
Three-month copper increased 1.5 per cent to $4,847.5 a tonne, just
short of its record peak of $4,850, as LME stocks fell below the
critical 100,000 tonnes level.
Nick Moore of ABN Amro called on China's State Reserve Bureau to
disclose the size of its inventoriesof copper and other commodities
after it said it would ban trading in derivatives following a
suspected scandal last year. "The copper market swings on a few
hundred thousand tonnes of copper [stocks], so the actions of the
SRB have been pivotal in the price behaviour."
Aluminium hit a new record of $2,525 a tonne yesterday before easing
back to $2,500, up 5.1 per cent this week. Aggressive profit taking
hit zinc and lead on Friday. Zinc hit a record $2,315 a tonne on
Thursday but retreated to $2,250 yesterday. Lead fell 6.8 per cent
to $1,275 a tonne. Nickel rose 5.5 per cent on the week to $15,400
in spite of a large increase in LME stocks on Friday, pointing to
oversupply. Technical analysts said if resistance levels at $15,500
could be challenged, then $17,000 was next.
Oil prices heated up again on Friday amid concerns over possible
supply disruptions from Nigeria and Iran.
Nymex March West Texas Intermediate jumped $1.24to $67.50 a barrel
whileIPE March Brent added98 cents to $65.90 a barrel.
Sugar prices moved sharply higher in New York with the March 2006
contract reaching 18.82 cents a pound before settling at $18.73.
Freezing weather in central Europe pushed IPE February gas oil up to
$556.00 per tonne. IPE front month natural gas rose to 63.50p per
therm amid supply concerns.
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Ted Butler silver commentary archive:
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