Much of this was reduced to a loss of confidence in the euro. The single European currency fell more than four months against the dollar last week after Jean-Claude Trichet, President of the European Central Bank, indicated that interest rates may not move over the next month and concern grows that the debt of the Greece crisis is spiral out of control.
Also, U.S. crude oil stocks rose. The Energy Information Administration, in its report of crude oil weekly said U.S. commercial crude oil inventories increased by 3.4 m in the week ending April 29 to 366.5 million barrels. This means that oil inventories remain above the upper limit of the average range for this time of year. These data were released on Wednesday, when the rout meeting pace.
Prizes will be always volatile. Mining is a cyclical industry and it is not going to change. However, we are far form near the end of the cycle, as there is not much sign of China shot tools immediately.
Course, worrisome inflation in the country has meant that there was some tightening - and this has had an impact on demand. But it is lighter, and the country will continue to aspire products for some time.
Prices will still rise and fall last week is a correction rather than when the party. Barclays is in agreement.
"In this context, the huge decline in prize money and a substantial strengthening of the dollar appear to have triggered a phase of long liquidation in commodities which had flammable legacy for some time, but will probably not last very long"Barclays Capital said.""
Of course, raw materials will drop significantly at some point in the future. Miners are investing billions in bringing new capabilities on stream - and when the offer of equation begins to expand rapidly, the cycle will be at its peak.
However, it is quite a bit more later. It takes several years to get to the stage where boards approve expenditures, regardless of the time it takes to build the mine.
There are also significant delays on the order of mining equipment and this can lead to a major bottleneck - especially in a mining boom as we are witnessing at the moment.
Investors can feel reassured that prices will recover - especially if the dollar continues its almost inevitable runway below. The only thing that could derail this gesture would be another crisis in the euro area.
There was speculation Greece may have to get out of the single European currency. If this occurs, a flight safety would occur and lots of dollars would be repatriated, sending the currency higher.
However, it is very difficult both a top - or a Fund - in any market and it is preferable to use the falls by buying opportunities. The correction may continue for some time, but it is likely to be precisely: a temporary correction. GW
Silver loses its luster.
Silver indeed lost its lustre last week, dropping by more than a quarter in price.
Many observers, including this column a month ago, has warned that the money was heading for a fall, but few could predict the size of the correction.
A week earlier, he had been teasing $50 an ounce, but the price is now languishing below $38. Analysts say silver has been the leader in the rout of the goods which saw metals to considerably lower this week. Most of the raw materials fell as the dollar has accelerated. Investors retreat reached in concerns about the growing global moderator request high oil and doubts that commodity prices have been driven out by speculation above the foundations of the offer and the application of recent months.
Daniel Major and Nick Moore RBS believe correction is overdue in precious metals: "gold and silver prices have been richly to price and trade well above fundamentally justified levels."
"As an example, gold and silver margins producer are enormous." Precious metals consultants GFMS feel fresh cash world production of gold in 2010 $ per ounce and the costs of total production to $723 per ounce. Money, the situation is even more spectacular, with 2010 estimated total cash costs at only $5.27 ounce against a price spot a week ago was ounce $50. » RM
Brent crude plunged $10
Oil has seen a dramatic sell-off, plunging $10 Thursday at $113 per barrel in a rout of products in all areas. Investors was afraid to long Records held by the fund managers and concerned about the erosion of the demand caused by price to $125 per barrel. However, analysts warned that the decline is probably a correction in the short term and the disruption of supply or shortages on the oil market could easily send the prize to the same heights by next year. RM
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