Copper passes US$8,000, gold hits new 25-year highMay 10...

Copper passes US$8,000, gold hits new 25-year high

May 10 2006

LONDON: Copper rose to US$8,000 (US$1 = RM3.58) a tonne for the first time as a mine closure in Mexico fuelled speculation among investment funds that returns from metals will keep outpacing stocks and bonds.
Gold also rose to a 25-year high, platinum and zinc were at records and aluminium climbed above US$3,000 for a second day. Copper has gained as labour disputes and production threats from Mexico to Indonesia have dented global metal stockpiles. Grupo Mexico SA, the world's seventh-largest copper miner, said yesterday it shut the San Martin mine as a strike deepened concern about safety.
"It's hard to see how the momentum can stop at this moment," said Roy Carson, a London-based trader at Triland Metals Ltd, which trades on the floor of the London Metal Exchange (LME), the world's biggest metals bourse. "Continued speculative buying" is stoking prices.
Copper for three-month delivery advanced as much as US$195, or 2.5 per cent, to US$8,010 a metric tonne, and traded at US$7,905 as of 10.06am local time on the LME. The metal, used in wiring and plumbing, has risen 81 per cent this year.
Pension and hedge funds are pouring money into commodities as raw materials from sugar to oil produce returns that are outpacing other assets. Crude oil has gained 16 per cent this year in New York and traded above US$71 a barrel yesterday. Fund investments in commodities may exceed US$120 billion by 2008, up from US$80 billion last year, according to Barclays plc. - Bloomberg