Oil, copper post modest gains, watch equities

NEW YORK – Industrial commodities such as copper and oil showed modest gains on Friday after latching onto a mild rally in equity markets amid improving US economic data.

But agricultural markets and soft commodities, save for cocoa and sugar, ended broadly lower as players took profits on recent gains. Soybeans, for instance, extended Thursday’s rally to new six-month highs, before retreating.The Reuters-Jefferies CRB index a broad commodities index which tracks prices across 19 futures markets, finished up 0,3 per cent.’It’s a mixed bag,’ said Ralph Preston, futures analyst at HeritageWestFutures.com in San Diego, California. ‘The quiet action in oil, metals was almost boring.’However, Preston said, momentum is building to the upside in oil and copper as US data on housing and industrial activity – even employment – has been more friendly than depressing of late.’Oil and copper are probably the best indicators of the economy and I’ve got a beautiful technical chart showing crude prices could be at a boil. I would expect a sharp breakout in oil from the tight US$48-$52 range it has held over the two weeks and copper to shoot well above US$2,20,’ Preston said.The front-month contract for US crude oil settled up 35 cents at US$50,33 a barrel.US copper’s second month contract, May, closed up 2,45 cents at US$2.1940 a pound.Traders attributed the higher closings to the run-up in US stocks, which settled up a sixth straight week after investors bet on strong first quarter corporate results following a surprising turnaround at financial firms like Citigroup.Further boosting sentiment was a Reuters/University of Michigan Surveys of Consumers report showing US consumers having more confidence in the nation’s economy now than back in September when the sudden collapse of Lehman Brothers caused a near-implosion of the global banking system.Front-month US crude climbed as high as US$51,37 a barrel while May copper touched a session peak of US$2 2050. In London, Brent crude settled up 29 cents at US$53,35 a barrel and the third-month copper contract finished up $74 at $4 803 a ton.But not all analysts were upbeat about industrial commodities and prospects for the global economy.David Thurtell, a base metals analyst at Citigroup in London, forecast that for the short term ‘things will hold ground or maybe go down a little bit lower.’’Demand is still pretty anaemic,’ he said, referring to copper and other metals like zinc and lead.Gold continued its decline as investors’ interest in other commodities sapped funds away from the precious metal, whose prices have fallen about 15 per cent from February’s near-record highs above US$1 000 an ounce.US gold’s benchmark June contract settled Friday’s trade down US$11,90 at US$867,90 an ounce.’As other asset classes begin to become attractive.It makes perfect sense that you are seeing money being withdrawn from the gold funds to be put into other assets,’ said David Wilson, precious metals analyst at Societe Generale.-Nampa-Reuters