Sentiment on the copper market remained nervous on Thursday as rumours and speculation continued to swirl around China’s State Reserve Bureau.

Three-month copper contracts hit $4,182.5 a tonne, all-time high in a volatile trading in London. Prices swung in a more than a $70 range on the London Metal Exchange before ending at $4,144.5 a tonne, up $4.50 of Wednesday’s late quote.

The market continued to be dominated by speculation over whether the SRB, a government body which manages China’s strategic commodity reserves, might have to buy large quantities of the metal following a series of controversial trades by a Chinese trader.

China raised the possibility on Thursday that it might not recognise the trades on the London market when a Beijing official said the Chinese trader who made them was acting in a “personal” capacity and was no longer employed by the government.

The copper price, however, was boosted from the latest latest study of International Copper Study Group which showed a sharp fall in mining output. The study showed a 695 000 tonne downward revision in total copper mine output for this year compared with its forecast in March. The output downgrade was based on production disruptions primarily in Chile and the US.

Refined output had been revised lower by an even larger 831 000 tonnes. Production forecasts for 2006 were also pushed down. However, some analysts questioned if production forecasts are still too optimistic.

Other metals were steadier, with aluminium shrugging off a big inventory increase for the second successive day. Three-month aluminium ended $3.5 down to $2,007 a tonne at the end of open outcry trading in London. Zinc continued its recent strong performance, touching $1,628.5 a tonne, the highest level since July 1997.

Lead touched $1,003 a tonne, eyeing $1,017 peak set in fourth quarter 2004, but ended at $982.5, up 50 cents from Wednesday’s close.

Gold touched a near 18-year record high on improved confidence over demand for the metal. Speculative buying boosted the bullion to $486.80 a troy ounce, the highest level since January 1988. However, later on the day gold eased at $485.20/$485.90, up $6.20 from Wednesday’s late quote.

Platinum touched a new near 26-year high at $992 a troy ounce, up $7 from Wednesday’s late quote on improving demand for the metal. The precious metal has been supported from a bullish industry report released on Tuesday. Later on the day it however eased to $976. Analysts expect platinum to hit $1,000 level before end of the year.

Palladium, platinum’s sister metal, rose to $258 a troy ounce, its highest level since May 2004. Silver exceeded the critical $8 level hitting $8.11 a troy ounce, its highest level since December last year.

Oil prices resumed their downward trend after surging more than a dollar initially on Thursday as healthy US stockpiles eased concerns about energy supplies going into winter.

Brent crude oil for January delivery fell $1.15 to $54.85 a barrel in closing trade in London, while US benchmark for crude oil, West Texas Intermediate, for December delivery dropped $1.55 to $56.33 a barrel.

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