Commodities make small gains in Asia on U.S. attacks
Commodities make small gains in Asia on U.S. attacks
Dow Jones, Singapore
Most commodities, weighed by a supply glut and weak demand,
saw some gains early Monday in Asia, following United States-
United Kingdom military attacks on Afghanistan late Sunday. Some
fell on news of the attack.
Gold, base metals and rubber rose. Palm oil prices fell on
concerns that consumption from India and Pakistan, among the
world's largest buyers, will be crimped further.
Spot gold rose US$2.50 to $293.25/oz on the attack, but
analysts are divided over the metal's direction in the medium
term.
An analyst at a major Sydney bank expects gold to break
through the $300/oz barrier within the next few days. Technical
charts indicate the price move wasn't a spike, but a reflection
of the upward trend in gold due to the protracted nature of
hostilities, said the analyst.
"Gold is a sentiment-driven metal and sentiment has well and
truly changed," said the Sydney bank analyst.
Gold was boosted Monday more by the dollar's weakness since
Sept. 11, rather than by safe-haven buying, he added.
At 0550 GMT (0.50 p.m Jakarta time), spot gold was trading at
$293.35/oz, compared with its New York close Friday at
$290.75/oz.
Meanwhile, mining operations in Indonesia are unaffected thus
far.
PT. Freeport, a unit of U.S.-based Freeport Mc-Moran Copper &
Gold Inc. said there is no security threat and that it is
business as usual at its copper mines in Irian Jaya, Indonesia.
Crude palm oil futures on the Malaysia Derivatives Exchange
fell 2.5 percent midday tracking lower soy oil values in Chicago
and on initial reaction to the U.S. attacks.
U.S. attacks could raise fresh fears of shipping problems for
palm oil exporters, an MDEX trader said. Pakistan and northern
Indian ports are near the war zone.
Early weakening of the Indonesian rupiah following U.S.
attacks on Afghanistan was also bearish for palm oil, another
MDEX trader says. Weaker rupiah makes Indonesian exports more
competitive.
The MDEX December contract fell to 873 ringgit ($229.7) per
metric ton down 22 ringgit from Friday's close at midday. Trading
volume, however, was low at 433 lots as market awaits clearer
leads. One lot is 25 tons.
Rubber futures prices on the Singapore Commodity Exchange
closed higher midday Monday on short covering and a stronger U.S.
dollar against the rupiah, following the U.S. attack, traders
said. The Tokyo Commodity Exchange was closed Monday.
But the rebound is expected to be short-lived as the weaker
rupiah is likely to weigh on TSR20 prices, said a Singapore-based
trader.
November RSS1 on Sicom is up 0.25 at 96.75 Singapore
cents/kilogram (54 U.S. cents); November RSS3 and TSR20 are also
up 0.25 cents, at 53.25 U.S. cents/kg and 49.0 U.S. cents
respectively.
Physical demand for rubber, meanwhile, is being monitored
closely after the strike, said a trader in Singapore. It is too
early to predict price direction and impact on demand, as the
attack just started overnight.