Commodity markets moved higher this week on upbeat US data and rising stock markets, given a boost after the International Monetary Fund ramped up its 2010 global growth forecast, analysts said. "Commodity prices have returned to positive territory in recent days, although fragile sentiment on the broader macro-economy remains," said Barclays Capital research analyst Sudakshina Unnikrishnan.
The IMF on Thursday upgraded its global growth forecast for this year despite renewed financial turbulence stemming from Europe's debt crisis. It projected the world economy would expand by 4.6 percent, up from its 4.2 percent forecast in April, reflecting "stronger activity" during the first half of 2010. The fund maintained its 2011 growth forecast at 4.3 percent. Stronger world growth helps drive demand for commodities.
OIL: Crude oil prices rebounded, topping 76 dollars on positive investor sentiment amid hopes of sustained solid energy demand. "This week, crude oil prices rebounded and traded above 76 dollars per barrel, buoyed by the recent rally in the global equities markets," said analyst Myrto Sokou at the Sucden brokerage in London.
"It looks like we have seen the bottom (of the market) as this week crude oil prices tested a four-week low near 71 dollars but easily recovered." Stronger demand in the United States, shown by a drop in crude inventories there, also helped push prices higher.
"A slightly better IMF world growth outlook helped support both equities and commodity markets," said Andrey Kryuchenkov, an analyst for Russian financial group VTB Capital. The market was buoyed by a regular report showing that US crude oil reserves plunged almost five million barrels in the week ending July 2, much more than expected as Gulf of Mexico production was impacted by Hurricane Alex last week.
Positive US economic data - showing a decline in the number of Americans registering for jobless benefits - added to the positive tone. "The recent strong rally in the global equity markets, encouraging economic figures and the large drawdown in oil inventories are considered bullish (positive) signs for the near-term," Sokou said.
"In addition, the optimistic view from the IMF with potential robust growth from the US and Asia could spread further optimism with the potential for an increase in oil demand for the second half of 2010." By late Friday on the New York Mercantile Exchange, Texas light sweet crude for delivery in August had jumped to 76.04 dollars a barrel from 72.98 dollars the previous week. On London's Intercontinental Exchange, Brent North Sea crude for August delivery climbed to 75.39 dollars from 72.38 dollars.
PRECIOUS METALS: Precious metals held steady, with gold creeping higher after recently striking a record high. "Gold's safe-haven appeal has been challenged by a positive global growth revision from the IMF," said Kryuchenkov. The metal is regarded as a safe haven investment in times of economic uncertainty.
"Moreover, US weekly jobless claims declined, giving a slight boost to equity markets. So, risk aversion has somewhat improved, limiting the upside in gold," he added. The metal hit an all-time peak of 1,265.30 dollars an ounce on June 21.
By late Friday on the London Bullion Market, gold had firmed to 1,208.75 dollars an ounce from 1,201.50 dollars the previous week. Silver slid to 17.87 dollars an ounce from 17.98 dollars. On the London Platinum and Palladium Market, platinum edged up to 1,527 dollars an ounce from 1,516 dollars. Palladium increased to 454 dollars an ounce from 433 dollars.
BASE METALS: Prices of industrial metals rose across the board. "Metal prices are still getting support from a slightly weaker US dollar and firmer equity markets, in the Asian region especially," Commerzbank analysts said in a research note.
"Market players' risk appetite appears to have risen again," with many expecting a strong quarterly earnings season which begins next week with major US companies. MF Global analyst William Copp said the metals were boosted ahead of key Chinese trade numbers due at the weekend.
"Metals are higher again ahead of Chinese trade data coming out over the weekend ... June copper exports are expected to have risen for the first time in three months," he said. By Friday on the London Metal Exchange, copper for delivery in three months had jumped to 6,722 dollars a tonne from 6,484 dollars a week earlier.
-- Three-month aluminium advanced to 2,000 dollars a tonne from 1,953 dollars.
-- Three-month lead increased to 1,835 dollars a tonne from 1,760 dollars.
-- Three-month tin rallied to 17,690 dollars a tonne from 17,200 dollars.
-- Three-month zinc rose to 1,880 dollars a tonne from 1,795.25 dollars.
-- Three-month nickel climbed to 19,440 dollars a tonne from 19,099 dollars.
COFFEE: Coffee futures steadied, just two weeks after hitting 12-year peaks amid a tight supply situation. By Friday on Liffe - London's futures exchange - Robusta for delivery in September rose to 1,714 dollars a tonne from 1,710 dollars the previous week.
On the New York Board of Trade (NYBOT), Arabica for September dipped to 164.70 US cents a pound from 166.30 cents. Two weeks ago, it hit a record 176.50 2,378 pounds a tonne from 2,393 pounds the previous week. On the NYBOT, the September cocoa contract slid to 2,999 dollars a tonne from 3,021 dollars.
SUGAR: Sugar prices firmed. By Friday on the NYBOT, the price of unrefined sugar for delivery in October rose to 17.18 US cents a pound from 16.33 cents the previous week. On Liffe, the price of a tonne of white sugar for October increased to 519.10 pounds from 482 pounds.
GRAINS AND SOYA: Maize, soya and wheat prices rebounded further. By Friday on the Chicago Board of Trade, maize for delivery in December jumped to 3.95 dollars a bushel from 3.84 dollars the previous week. November-dated soyabean meal - used in animal feed - rose to 9.47 dollars from 9.05 dollars. Wheat for September rallied to 5.36 dollars a bushel from 5.03 dollars.
RUBBER: Malaysian rubber prices advanced. The Malaysian Rubber Board's benchmark SMR20 contract rose to 293.60 US cents a kilo from 289.20 cents a week earlier.