May 3, 2008


Commodities jump, but losses raise concerns of downturn (STEVENSON JACOBS, 5/03/08, AP)

After a week of steep losses in rice, wheat, gold and silver, investors are wondering whether the commodities price bubble may be about to burst. [...]

The flight from commodities has been most pronounced in gold, which has lost virtually all its gains from this year and is 20 percent off its all-time trading high of $1,038.60 an ounce, reached March 17.

Moreover, investors are funneling money out of gold exchange-traded funds, or ETFs, which sell shares backed by gold bullion. The biggest gold ETF in the U.S., street TRACKS Gold Shares, has shed 83 tons of gold since March, roughly half the amount it acquired during the metal's run-up beginning late last year.

"That's an indication that the credit market tightness is being alleviated," said Tom Pawlicki, commodities analyst with MF Global Research in Chicago. "At this point I think we're probably in the early stages of a weakening commodities market, a strengthening dollar and more risk appetite."

...all we're short of is housing.

Posted by Orrin Judd at May 3, 2008 10:06 PM
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