Commodities Watch: Gold & Silver Continue Surge; Oil Tops $111; Corn Prices Also Rising Again; Positive Outlook for Aluminum (GLD, SLV, USO, CORN, MOO, AA, JJU, CENX, AWC, KALU, NOR, ACH)

Time for our daily look at the world of commodity prices and key developments. This Friday brings gold and silver, corn prices on the rise, and even a positive read on aluminum.  Commodities markets seem to be trying to weather a near-perfect storm of a weaker dollar and rising commodity prices feeding inflation. Yesterday’s rate hike by the European Central Bank has pushed the dollar down further, and the drop has been exacerbated by a likely US government shutdown at midnight tonight.

Gold has set a record high today above $1,470/ounce and silver has burst through the $40/ounce level. Demand for gold is rising due to its safe-haven status, and much of the rise in silver prices is due to its perceived value as a long-term investment, if not a safe-haven. The SPDR Gold Shares ETF (NYSE: GLD) is currently posting a 52-week high of $143.69, up nearly 1% from yesterday’s close, and the iShares Silver Trust (NYSE: SLV) has also pegged a 52-week high currently of $39.48.

The weaker dollar lifts the price of all commodities because most are priced in dollars. WTI crude oil is headed toward $112/barrel and Brent crude is on its way to $125/barrel. The United States Oil ETF (NYSE: USO) is up more than 1% today, at $44.52 after setting a new 52-week high of $44.58, and is up about 13% since the beginning of the year.

Corn futures had been sliding slightly since closing at $7.59/bushel yesterday. The grain has turned north at about mid-day, though, currently trading at $7.65/bushel. The USDA today re-iterated its forecast that corn stockpiles in September will total 675 million bushels, less than half the total stockpile in September 2010. The lower price for corn futures early today were almost certainly due to the unchanged USDA forecast. Then reality set in, in the form of lower global stocks of corn and the weaker dollar. The Teucrium Corn Fund (NYSE: CORN) is up marginally today, to $45.66, near the top of its 52-week range of $23.79-$46.25. The Market Vectors Agribusiness ETF (NYSE: MOO) is also up about 0.2%, to $55.97, in a 52-week range of $35.56-$57.93.

A new report from Deutsche Bank notes that aluminum prices could rise to $3,200/metric ton later this year, a rise of about 23% from current prices. The bank believes that rising production costs, particularly the cost of energy, will raise producers’ costs, and those costs will be passed along to customers. Alcoa, Inc. (NYSE: AA) reports first quarter results on Monday, and is expected to post EPS of $0.27 on revenue of $6.14 billion. Alcoa’s shares are up about 14% since January 1st, and analysts expect a solid report based on the company’s pricing power.

The iPath DJ-UBS Aluminum Total Return Sub-Index ETN (NYSE: JJU) set a new 52-week high today of $35.84, currently up about 0.6%. Other aluminum producers include Century Aluminum Co. (NASDAQ: CENX), Alumina Ltd. (NYSE: AWC), Kaiser Aluminum Corp. (NASDAQ: KALU), Noranda Aluminum Holding Corp. (NYSE: NOR), and Aluminum Corp. of China Ltd. (NYSE: ACH). All except Kaiser have posted share price gains of more than 5% since the beginning of the year, with Century leading the pack with a gain of about 30%. For the past 52 weeks, all remain at or near 52-week highs.

Paul Ausick