Commodities are trading higher again today, as some weakness in the dollar and a broader return of risk appetite helps the complex, following the announcement by President Obama that he will be extending the Bush-era tax cuts for another two years; a move designed to stimulate the US economy and remove the uncertainty surrounding the contentious issue. Precious metals are once again leading commodities higher today, with silver seeing the majority of headlines as it tops $30/oz for the first time in 30-years, and with spot gold once again breaking to new record highs in terms of both the greenback ($1,428/oz) and in euros (€1,072/oz). The complex sees additional strength coming through following comments by Fed Chairman Ben Bernanke yesterday, hinting that more quantitative easing could take place if needed, increasing the speculative demand of precious metals as a hedge against inflation. Uncertainty surrounding Eurozone peripheral country debt with the Irish parliament today voting on the budget, and following on from the meeting of EU minsters yesterday which seemed to conclude their will not yet be any expansion of the bailout fund, nor a Eurozone bond being issued, is helping safe haven demand for precious metals again today. Crude oil is also making strong headway today, with WTI Nymex pushing through to over 2-year highs near $90/bbl, and bringing many to speculate it may top the key $100/bbl level before the end of the year. Brent crude too has been pushing new highs, currently trading around $90.50/bbl as the cold spell affective the northern hemisphere continues to push energy demand. The high price leaves crude at a level above where OPEC members have previously defined as ‘comfortable’, leading to some speculation that the cartel may implement dampening measures when they meet in Ecuador this weekend. However the short term nature of the recent price gains is likely to offset to one extent or anther members push to increase their output, with a no-change scenario still seen as the most likely to come out of the meeting. Base metals are making gains in line with the broader commodity markets today, with copper touching a new all-time high at $8,970/tn this morning, despite the Chilean mine strike at Collahuasi coming to an end. According to Macquarie Group, iron ore imports to China next year are set to rebound, as Brazilian and Australian producers begin to increase supply. The group say this will come particularly from the seaborne market, which is likely to be the country’s first choice to bridge the gap between its demand for the raw material, and the domestic production levels. The agricultural sector is also making good gains today, with cocoa prices once again benefiting from the ongoing crisis on the Ivory coast, peaking at a 4-month high of $3,048/tn this morning. The unseasonal wet weather in Australia is continuing to support much of the complex, although interestingly it is the coking coal market that is now seeing much of the attention, with many Australian mines going offline due to flooding, coking coal prices are being driven up again today as the issue remains in focus.

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