14 March 2003 03:26
AAP MARKETS REPORT for Friday March 14, =3 Sydney
COMMODITIES In LONDON, London Metal Exchange metals ended easier after copper and aluminium ran through support at
the bottom of recent ranges in late Thursday trade, triggering expected sell-stops, traders said. "The metals were
set for a soft close given today's US economic data," said analyst Robin Bhar and Standard Bank London.
Poorer-than-anticipated US February retail sales and unemployment data appeared to have little impact on the LME when
released at 1330 GMT. Bhar said the strong showing of equity markets may have also hurt metals as money moved into
stocks. Bhar said the market was looking to the release of US industrial production figures at 1415 GMT on Friday.
"We have had poor numbers now in the last month and people are talking again of double-dip (recession)," said
Bhar, adding that the market was expecting weak numbers. "However, if they are better you are going to get a
bounce," the analyst said. "It's a very tricky market ... We have a potential war around the corner and
people don't really know," said one trader. "A war will psychologically push things down very quickly,
but not very far, and after that everything will start to recover ... as soon as it starts." Despite a potentially
gloomy economic outlook, both Bhar and trader agreed that the base metals market looked constructive in the longer term,
but as long as a threat of a war existed, it would make people very cautious when taking positions. Copper ended
Thursday's afternoon's kerb session at $1,654 a tonne, dropping from $1,673 at the end of the previous day. On
its way down it triggered sell-stops below $1,660. "These stops were certainly triggered," said Bhar. The
analyst said he saw support for the red metal at $10 levels below the market price and a more solid floor at $1,640.
Aluminium slipped below support to end on the kerb at $1,390.5, down $19 on Wednesday. "In the half hour (before
the kerb session started) aluminium went below $1,400 I am sure there have been some stops there. But there is buying in
the market," the trader said. Nickel ended at $8,240 down $40 on the previous close. "Big tonnages coming back
onto the market after the fairly large backwardation we have had," the trader said. Zinc also retreated closing
down $7 at $815, while lead was untraded, indicated at $477/78, down $1. Tin was also untraded at $4,540/50, up from
$4,525. In NEW YORK, COMEX gold fell to three-month lows on Thursday, with sell orders lined up at the open in response
to reports that some Iraqi military officials were discussing surrender in event of a US-led invasion, and traders said
initial selling triggered massive liquidation. Traders said the rising dollar and stock markets in reaction to the Iraq
news fueled gold's liquidation, which triggered a whole series of stop-loss sell orders. "Today was a
landslide because a series of stop-loss orders were set off one after the other," said one gold dealer. "Stops
everywhere liquidating," said one COMEX broker. April gold pulled off the low to trade down $11.90 at $334.60 an
ounce, but slid to $332.0 from a $346.70 high. Gold was last at current levels on December 13, when the low was $331.50
an ounce on April futures. Traders and brokers attributed the sell-off to the news that Iraqi officers were already
negotiating a surrender. In Europe, gold sank to an 11-week low as investors unloaded their safe-haven asset, the dollar
jumped more than 1 percent against the euro and European stock markets gained. "Everything is reacting favorably as
if nothing is going to happen, meaning there will be no war," said one dealer. "Gold's reaction was also
due to the higher dollar and stocks." Spot gold fell to $335.10/6.10 an ounce on Thursday, well off the $346.0/6.75
finish on Wednesday. London bullion dealers fixed the spot reference price at $334.50. Elsewhere in precious metals, May
silver lost 9.0 cents to $4.545 an ounce, and traded in a $4.50-$4.635 range. Spot silver fetched $4.53/55 an ounce,
down from the $4.62/64 close on Wednesday. Silver was fixed at $4.585. NYMEX April platinum dropped $10.0 to $686 an
ounce. Spot was indicated lower at $690/695 an ounce. June palladium fell $3.80 to $233.0 an ounce. Spot was quoted
sharply lower at $223/228 an ounce. In NEW YORK, Profit-taking in NYMEX crude oil futures extended losses at midday on
Thursday amid a possible delay until next week of a UN vote on a resolution that could trigger war against Iraq. Word
from the White House of the possible delay came amid frantic US and British efforts to win the support of undecided
members of the 15-member UN Security Council. At 12:30 EST (1730 GMT), NYMEX April crude traded 78 cents lower at $37.05
a barrel, after dropping to a session low of $36.90 and ranging as high as $37.80. The market retreated after
Wednesday's gain of $1.11 to $37.83, which came as after government and industry data showed large draws in crude
oil and gasoline inventories last week. British Foreign Secretary Jack Straw said that Britain was willing to drop one
of six demands to be raised in the resolution -- that Iraqi President Saddam Hussein appear on TV and pledge to give up
weapons of mass destruction -- to help secure the necessary votes for the measure to pass. Traders said these
developments added to uncertainties over military action against Iraq, though the US continued to prepare for a possible
war, with its latest move to deploy B-2 Stealth bombers, believed headed for the Indian Ocean base at Diego Garcia. In
London, April Brent crude was down 49 cents at $33.42 a barrel. France, Germany and Russia on Thursday flatly rejected
British proposals aimed at breaking a deadlock over a second UN resolution, reducing the chances of Washington getting
United Nations backing for a war on Iraq. French Foreign Minister Dominique de Villepin said Britain's idea of
setting specific tests of Baghdad's compliance with UN weapons inspectors was unacceptable as it was still based on
the idea of setting a deadline for military action. The United States needs nine yes votes and no vetoes from permanent
members of the Security Council for the amended resolution to pass. Iraq dismissed the British proposal as an
"aggressive plan for war". A diplomatic source said Iraq would send a report on its disposal of VX nerve agent
to chief UN weapons inspector Hans Blix on Friday and another report on anthrax a few days later. NYMEX April heating
oil was down 4.82 cents at 98.70 cents a gallon, trading 98.70 cents to $1.0290. NYMEX April gasoline was off 2.89 cents
at $1.0850 a gallon, after moving $1.0820 to $1.11. MORE
[AIW [Asia Africa Intelligence Wire]] |
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