Commodity prices rallied last year on keen demand and signs of global economic recovery, with oil soaring and gold striking record levels, while copper and sugar surged.

“The year 2009 has been a rollercoaster ride for most commodity
markets, with copper, sugar and New York crude performing especially
well,” said VTB Capital commodities analyst Andrey Kryuchenkov.

“Refined copper and raw sugar were certainly the outstanding gainers as
both more than doubled from lows at the start of the year.”

He added: “China’s unprecedented financial stimulus had certainly
benefited raw materials linked to the expanding infrastructure and
industrial growth.

“Demand (from leading industrialised economies) has yet to show
significant and sustained signs of an economy recovery. However,
end-of-year data, especially from the US, was fairly encouraging.”

Back in 2008, crude oil and base metals had forged historic peaks on
supply woes, before tumbling as the global financial crisis and
recession sparked demand worries.

Crude oil leapt this year by around 80 per cent as traders were
heartened by evidence that the battered global economy was on the mend,
with the euro zone, Japan and the US escaping a fierce recession.

The worldwide economic downturn had slammed demand for energy and sent
oil prices plunging to around $33 towards the end of 2008.

“So much then for 2009, a year that the oil market spent mainly in a
recovery mode,” said Barclays Capital analyst Paul Horsnell.

Gold prices sparkled this year, scoring a record peak of $1,226.56 per
ounce at the start of last month, before tailing off as many traders
cashed in gains.

The glamorous metal has smashed records on the back of inflationary
fears and increasing moves by central banks to diversify assets away
from the dollar, which weakened against the European single currency.

Copper took its annual gain to more than 140pc as traders fretted over
possible strikes in key producer Chile. Most other base metals also
leapt higher on better-than-expected US data and thin market
conditions.

Source: Gulf Daily News

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