Agoracom

LONDON — Investment money poured into commodities on Thursday, boosting copper and aluminum to 21-month highs, while zinc jumped 6 per cent.

Precious metals gained ground too, with gold and platinum hitting records, lifted by fund money piling into commodities as investors sought protection and high-yielding assets amid fears about the health of the global economy.

Copper for delivery in three months on the London Metal Exchange touched $8,445 (U.S.) per tonne, its highest since May 24, 2006, before closing up 3.4 per cent at $8,430, against Wednesday's close of $8,150.

At the New York Mercantile Exchange's Comex division, copper for March delivery ended 10.20 cents higher at $3.8105 a pound, after dealing between $3.7140 and a new contract high of $3.8465 — the highest level for a second month contract on a continuation basis since May 30, 2006.

On May 11, 2006, London copper recorded its all-time high of $8,800, while Comex copper hit $4.16.

“We've seen plenty of investors turned quite bullish on the [metals] complex as a whole,” said Daniel Hynes, an analyst at Merrill Lynch. “We've certainly seen weak equity markets, and in general commodities have been a diversifier against that. The index money and long-term pension money has been flowing.”

The Reuters-Jefferies CRB index hit a new record at 398.04 points, up 0.65 per cent.

“We strongly believe that this is due to commodity index buying,” a UBS report said, pointing to the commodity rally.

“This has provoked short covering in base metals and has contributed to the move higher in copper and aluminum.”

Aluminum firmed $62 to $2,946, after touching an intraday high of $2,970 — the highest since mid-May, 2006.

Gold hit a record $953.60 an ounce, while platinum rose to an all-time high $2,182, having risen more than 40 per cent this year, as mines in South Africa ground to a halt for five days during last month's power crisis.

Stocks of copper have fallen more than 30 per cent this year. On Thursday, they dropped 2,250 tonnes to 135,375, enough for less than three days' of global consumption.

“We expect market fundamentals to remain strong in the weeks ahead, which will likely maintain downward pressure on inventories and should also support prices,” analyst Michael Widmer at Lehman Brothers said in a research note.

Zinc jumped 6 per cent, helped by short-covering, traders said. Three-months zinc touched $2,550 per tonne and was later at $2,540 per tonne, up $135 from Wednesday.

“A lot of people were going short on zinc, and now that the prices are bouncing back, they're covering their positions,” an LME trader said.

Also supporting prices, China's Luoping Zinc and Electricity said it had halted mining production and reduced refined zinc production due to power shortages in Qujing city as more snow fell in Yunnan.

Nickel jumped to an intraday high of $29,300, up 4.3 per cent, before closing at $29,250, versus $28,100 Wednesday.

Tin hovered close to its record high of $17,575 set in November. It hit $17,480 before ending at $17,400 per tonne, up $300 from Wednesday.

Lead rose 1.8 per cent to $3,336 from $3,276