Commodities In A Tailspin
Traders fled commodities
long positions, leading to the largest weekly drop in 25 years, as
speculation that higher rates will reduce the value precious metals. The CRB
Index of 19 commodities fell over 5% this week, after making record highs on May
11.
In the meantime, the dollar saw its first weekly
gain in a month, again in trader speculation the Fed may raise rates again on
June 29. The Fed fund futures are pricing in a 66% chance the Fed will raise
rates to 5.25% at that meeting.
Gold closed at $677.10, off 24.10.
In a report, the International Copper Study Group said copper production
exceeded demand by 77,000 tons in the first two months ofo 2006.
Bonds ended slightly higher, at 106 31/32, on
talk of a slowing economy.
Wheat fields in China, Russia, Ukraine, India and
Africa are facing dry conditions, according to AP. December wheat closed at
$4.462, down 1.25 cents.