Expensive glow by Claudia Sonea

Jewelry will get more and more expensive, but look at the bright side oil and base metals fell due to a possible US recession that become more obvious after an unexpectedly sharp fall in January's ISM non-manufacturing survey. Precious metals have gotten to record hights like platinum that hit a record $1,809 a troy ounce on continuing concerns about production in South Africa, according to Tuesday reports. However, it eventually settled to $1,763 a troy ounce- slipping 1.5 per cent on profit-taking. Most of the concerns appeared after last week's electricity supply crisis in South Africa. Although power has been restored to mines, it was working only at 90 per cent of normal requirements, thus the mining companies have been unable to resume production at full capacity and the outlook for the country's platinum output remains uncertain as power supply remains an issue. On the other hand gold consolidated below $900, to $891.70 a troy ounce, after on Friday it reached $936.50. Anyway, you could skip buying jewels for now, but you desperately need gas, to get to work, to do your shopping and that is why the news that Nymex March West Texas Intermediate crude oil fell $1.35 to $88.67 a barrel while ICE March Brent lost $1.36 at $89.11 a barrel on recession fears, will really make you gasp in contempt. Furthermore, the US weekly inventories data released today is expected to show further proves of demand softening. A preliminary poll created by analysts working for Reuters said that refineries will reduce consumption for a fourth week and therefore refinery utilization will drop to 84.8 per cent. If US crude stocks are expected to rise 2.2m barrels, the distillate stocks are more likely to continue their seasonal decline with a fall of 2.1m barrels and gasoline inventories were expected to rise for a thirteenth week with an increase of 1.9m barrels. Another sector that suffered set backs was the trade in base metals due to severe winter weather and power supply disruptions. Jiangxi Copper, China's largest producer by volume, revealed that the recent snowstorms forced them to stop all production activities. Why would that be so bothering, for example Chile's Collahuasi copper mine, which produces 8.2 per cent of the country's copper, after an earthquake struck the north on Monday, continued its activity unharmed. John Hill stated that metal markets will suffer due to fears of US stock market and economy recession and the latest reports (zinc dropped 3.9 per cent to $2,372.5 a tonne; aluminium lost 1.6 per cent to $2,623.5 a tonne; and nickel eased 1.1 per cent to $26,800 a tonne) might just confirm it.

related story: http://news.yahoo.com/s/ft/20080205/bs_ft/fto020520081602316808;_ylt=AvUeS__64tMruEBd_GXqZWCs0NUE

by Claudia Sonea for SigEx Telecom (http://sigex.com)

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