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Commodities prices hang in balance as Greek voters take to polls

By Michael Bellart (Global Times)

08:23, June 18, 2012

Global commodity futures were mixed late Friday ahead of the Greek election as the markets took comfort in news that world's major central banks would take action if Greece elected anti-bailout candidates.

The benchmark three-month copper contract on the London Metal Exchange (LME) rose 0.7 percent after the Chinese mainland markets closed Friday, ending at $7,560 per ton. The contract fell 0.6 percent last week, its sixth straight week of losses.

LME copper lost some of its early momentum after news broke that the central banks have prepared measures to combat a liquidity crisis that may emerge if Greece elects parties opposed to the bailouts, Reuters reported.

If anti-bailout parties win the election, it could result in the debt-ridden country exiting the euro currency union - an unprecedented action that many fear would throw the financial markets into chaos.

Commodity analysts from the Australian bank ANZ predicted that the prices of major commodities such as copper and crude oil could plummet if anti-bailout candidates win Greece's election. "We predict commodity markets could drop an average of 12 percent in a relatively short five-day trading period if the Greek election fails to return a positive outcome," they said in a note Friday.

Among the most vulnerable is crude oil. Nymex West Texas Intermediate (WTI) crude oil for July delivery lost 0.7 percent after the domestic markets closed Friday, finishing at $84.03 per barrel, though the contract managed to end positive for the week. "The crude oil markets will be most affected, with long speculative positions vulnerable to profit-taking," the note said.

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