BY REUTERS

Posted 1/4/2007

Copper prices fell to a new nine-month low on Thursday as investors sold on expectations of a supply glut this year, while gold slid to a one-week low on a firmer dollar, analysts said.

Crude Oil fell to below $57 a barrel, their lowest since last November on concerns about a rise in U.S. stocks data. Prices are down by nearly $4 since Wednesday.

Copper for three-month delivery on the London Metal Exchange hit $5,625 a ton, the lowest since April 5. Used in the building, power and auto industries, copper has lost about 35% since touching a record high of $8,800 in May and more than 10% over the past three days.

Concerns about the economic and housing market slowdown in the United States and forecasts of a surplus this year have combined to undermine investor confidence in the metal. Many speculators, including hedge funds, over the last few months have sold copper short a bet on falling prices. That selling accelerated this week, but analysts and traders think a bounce is inevitable, possibly on Friday.

Spot gold touched a session low of $624.20 an ounce as the dollar firmed, prompting investors to retreat, but analysts say long-term price prospects are positive.

It was last quoted at $626.45/627.20 from $627.70/628.70 late in New York on Wednesday, when it lost more than $12.

A rising dollar makes gold more expensive for holders of other currencies. However, expectations of a falling dollar over coming months will boost sentiment towards precious metals.

Analysts also say news that a European central bank bought gold last month might be the beginning of a new trend capable of pushing gold back to May’s 26-year high of $730.

But for now much depends on Friday’s U.S. jobs data, which will determine the direction of the dollar and gold.

Crude oil was down $2.70 at $55.59 a barrel after data showed a large rise in U.S. fuel stocks following unusually mild weather in the world’s biggest energy consumer.

Barclays added that it remained positive on prospects for corn prices because of robust demand from China and from ethanol manufacturers in the United States.

Refined sugar futures eased on speculative selling linked to weakness in oil prices and a stronger dollar. The London benchmark March hit a three-month low of $332 a tonne after losing $10 on Wednesday.