Investor exuberance wanes

For the most part, commodity prices fell this week. This was not too surprising as the prices of many commodities, particularly the more industrial ones, appeared to have moved ahead of fundamentals. The slightly softer April PMI data out of China set the tone for the week, although we believe that broader activity indicators are still consistent with a cyclical pick-up in the Chinese economy. Meanwhile, some strengthening of the US dollar later in the week was an additional factor weighing on investor sentiment and prices. However, the gold price was broadly flat on the week, having benefited from weaker-than-expected US non-farm payrolls on Friday.