On Friday around 5.30 p.m., a ton of nickel traded at 35,260 dollars on the LME, after hitting 40,700 dollars in the same session.
Nickel prices soared with non-stop trading on Friday after last week’s chaotic rally on the London Metal Exchange (LME).
“Nickel is finally trading and remains open because it is finally finding a level…”, underlines Al Munro, broker at Marex, adding nevertheless that it always evolves in a confused way “in a context of disastrous liquidity”.
“Drastic price swings (…) drive many investors out of commodity markets, which in turn reduces liquidity and has the effect of increasing price volatility,” says Ipek Ozkardeskaya, analyst for Swissquote bank.
“Nickel has clearly become the face of this crazy volatility,” she continues, as the price of the “devil’s metal” jumped 15% to its upper bound for the second day in a row on Thursday.
Since the mad surge in prices on March 8 to more than 100,000 dollars per tonne – transactions since canceled by the LME – then more than a week of interruption in nickel trading, the London Metal Exchange tries to contain the volatility of the metal.
The London Metal Exchange has in effect imposed price movement limits, initially of plus or minus 5%, gradually increasing to 15%.
Investors were fleeing the market, sending nickel prices plunging to its low limit within seconds at each open.
On Friday around 4:30 p.m. GMT (5:30 p.m. in Paris), a tonne of nickel traded at 35,260 dollars on the LME, after hitting 40,700 dollars in the same session.
Seven days ago, trading stopped directly at the price of 31,380 dollars per tonne, the lower limit then set by the LME.
L’or brille
The price of gold rose over the week, boosted by the uncertainty hanging over the markets with the invasion of Ukraine by Russia and pushing investors towards the safe haven.
“The yellow metal will remain supported given high inflation and overwhelming uncertainty. But that does not necessarily mean that we are heading towards the highest historical highs, which are 5% higher”, summarizes Craig Erlam, analyst at Oanda.
“Gold’s gains are currently limited by the Fed’s aggressive rate hike policy,” the US Federal Reserve said Han Tan, an analyst at FXTM.
The prospect of higher rates makes government bonds, also a safe haven, more attractive, and weighs on investors’ interest in gold, which pays no return.
Around 4:30 p.m. GMT (5:30 p.m. in Paris), an ounce of gold traded for 1,956.15 dollars, against 1,921.62 dollars a week earlier at the end of trading.
The sugar is rising
Sugar prices climbed over the week, even reaching a six-year high (to be verified QW1) in London, between limited supply in Brazil and strong demand in Russia.
“These markets are once again influenced by the price of oil,” comments Jack Scoville, analyst at Price Group.
Russia’s invasion of Ukraine has boosted oil prices amid fears that economic sanctions will reduce Russian supply.
As a result, in Brazil, the world’s largest cane producer, farmers prefer to convert their harvest into ethanol to take advantage of the high cost of energy, reducing the amount of sugar available on the market.
In addition, “a high demand for sugar from Russia explains the recent strength in prices”, comments Carsten Fritsch, analyst at Commerzbank.
Scenes of struggle for sugar in supermarkets have made the rounds of social networks, Russians rushing in recent days on certain foodstuffs for fear of running out.
Part of the population, traumatized by the shortages of the 1990s, seeks to stock up on this product commonly used to preserve certain foods.
In New York, a pound of raw sugar for delivery next May was worth 19.63 cents, against 18.93 cents seven days earlier.
In London, a ton of white sugar for delivery the same month was worth 562.50 dollars against 536.10 dollars the previous Friday at the close.