COMMODITY prices bounced back with a vengeance yesterday following last week’s crash with Brent crude oil surging more than $6.77 a barrel in its second largest one-day gain ever.
The rebound, which saw Brent crude for June close 6.2 per cent higher at $115.90 a barrel, erased almost a third of last week’s losses.
Oil’s resurgence led a broad rally in commodities, with silver jumping seven per cent higher to above $37 an ounce after last week’s 25 per cent dive, and gold rising one per cent to regain the $1,500 an ounce level.
Trading volume, however, was low suggesting that the resurgence may not continue.
“I think we’ve broken the back of the upward market in oil and commodities in the short term and I think this is a more of the correction of the downward move,” said PFG Best’s Flynn. “I don’t think we’re going to get back to the highs.”
Alex Heath at RBC Capital in London echoed that. “The pattern is one to sell the rallies at the moment. On the whole, the risk remains to the downside ... until we see some clarity out of statistics to indicate that growth is back on line.”