Gold 1,433/oz - prices look steady despite seasonally weak period

• US jobless rate falls indicating improving prospects in the US
• ECB may raise interest rates on Thursday as economic activity rises
• Copper hedging is rising according to the FT as some miners doubt Chinese consumption growth
• China Daily, official source reckons Chinese inflation may now be controllable. This indicates that Chinese credit tightening and other measures to control inflation may be less severe than feared by some.

ECONOMIC NEWS

Dow Jones Industrials +0.46% at 12,376.72

Nikkei 225 +0.11% at 9,718.89

HK Hang Seng +1.25% at 24,098.38

US - The big news at the end of last week was that the US unemployment rate fell to 8.8% last month from 8.9% in February. It was the fourth monthly fall in a row. The majority of new jobs were created in the private sector offsetting job losses in the public sector.

China - Domestic, non official estimates suggest that the consumer price index increased to 5.3% in March, the highest level in more than two years driven by rising food prices. Official figures will be released into the market mid month.

• The State Council's development Research centre has stated that the country's inflation is "controllable" and that there is not much upside for prices. Despite this optimistic view the general consensus is that the government will continue to push monetary tightening over the coming months.

Europe - ECB is widely expected to raise rates this week, however concerns are re-emerging over the effects on peripheral countries that have been struggling to attain sustainable levels of growth post downturn. Policy makers meet in Frankfurt on April the 7^th.

• The Euro has had its strongest start to a year on record on the back of the prospect of rising rates and supporting growth from Germany.

Japan - The widely watched Tankan survey, which aims to provide an indication of business and specifically manufacturing sentiment has shown that post earthquake, expectations are that the outlook for the economy has deteriorated. The results although not unexpected will likely prompt the Bank of Japan to increase its monetary support program over the coming months.

Australia - The Treasury Department have estimated that the natural disasters that hit Australia at the beginning of the year will cost the economy circa US$9.4bn

Ivory Coast - Fighting has intensified in the commercial capital Abidjan over the weekend as rival forces reinforce their position within the city. Local reports suggest that forces loyal to internationally recognised election winner Alassane Ouattara are preparing to launch a full on assault on the Presidential palace. Local TV has been broadcasting pro Gbagbo propaganda and calling for all local supporters to join in the fight.

Canada - In a new twist concerning the takeover of Lundin Mining, Chinese group, Minmetals has entered the fray with a C$6.3bn bid 23% ahead of the Equinox bid. The board of Lundin is yet to meet to consider the bid.

• Minmet would meet the payments from cash and debt with Chinese banks.
• Equinox will be considering its options. We wait to see if it will up its offer.

South Africa - Figures released at the end of last week show that the South African Revenue Service collected more than 6bn rand from mining royalties in the first year of implementation.

• A former President of the National Union of Mineworkers has stated that mine nationalism without compensation would spark revolution as a result of the number of workers that would lose their pensions.

Brazil -Local media is reporting that a government proposed plan to introduce an Iron ore export tax that would aim to increase investment in domestic steel production has been rejected by finance ministers.

FOREX - ECB rate rise prospects appear to make US$:Euro rate highly volatile with further gains to the Euro forecast

US$1.422/eur vs $1.415eur yesterday. Yen84.05/$ vs 83.65/$ SAr6.71$ vs 6.76/$ $1.613GBP vs 1.606/GBP

COMMODITY NEWS

Precious metals:

Gold US$1,433/oz vs US$1,434/oz on Friday - Prices are up this morning as inflationary concerns remerge and geopolitical concerns in the middle remain prominent.

• SPDR gold trust holdings remain at 1,211.23 (38.942moz) Current value US$55,198bn

Platinum US$1,778/oz vs US$1,777/oz Friday -

Palladium US$779/oz vs US$767/oz Friday -

Silver US$38.37/oz vs US$37.66/oz Friday -

Rhodium US$2,375/oz vs US$2,375/oz Friday -

Base metals:

Copper US$9,420/t vs US$9,358/t Friday - Reports this morning suggest that in the short term, prices are expected to come back a bit more as Chinese demand remains sceptical. However looking into the second half of the year, mine shortages are expected to play an increasingly important role, especially taking into account the rebuild in Japan and as a result prices could rise.

• Anglo American has stated that heavy rains will mean that production at the Collahausi mine in Chile will be below estimates for the year.

Aluminium US$2,638/t vs US$2,630/t Friday -

Nickel US$25,759/t vs US$25,757/t Friday -

Zinc US$2,423/t vs US$2,352/t Friday -

Lead US$2,761/t vs US$2,687/t Friday - Mitsubishi Materials has stated that it will boost lead output by 16% in the coming months in order to meet increasing demand for batteries

Tin US$31,600/t vs US$31,660/t Friday -

Energy:

Oil US$119.25/bbl vs US$117.65/bbl Friday - Prices have moved up today as the market expects demand in the US will improve in the coming months as the labour market recovers.

• Imminent elections in Nigeria are prompting some concerns of more geopolitical unrest in West Africa.

Gas US$4.313/MMBTU vs US$4.372/MMBTU Friday

Uranium US$62.50/lb vs US $60.00/lb last week -

Other:

Rare Earths - According to the China Business Journal, China may gradually invest more than US$1.5bn in creating official state reserves and stockpiling REEs.

Steel - Reports this morning are emerging that Chinese buyers have been holding back on purchases of Japanese scrap steel and have blocked some cargos citing radiation concerns.

Stainless steel - Macquarie have forecast that global stainless steel production could increase to 8.8m tonnes in Q1, 12% higher than Q4 2010.

Mining last week:

Sable Mining (SBLM LN) 23.5p mkt cap £217m - Results from Lubu indicate coking coal potential

Triple Plate Junction (TPJ LN) 6.5p, mkt cap £19m - Long gold intersection in PNG

European Nickel (ENK LN) 15.38p mkt cap £40.28m - Operational update

Fortescue Metals (FMG AX) - considering listing in Hong Kong

Mount Burgess Mining (MTB AX) - 15.5c, mkt cap A$6m - Copper cobalt anomaly defined at Tsumkwe, Namibia

Rio Tinto (RIO LN) 4,279p mkt cap £87,802m - Bid for Riversdale declared unconditional

Baobab Resources* (BAO LN) 39p mkt cap £64.8m - 3.5km magnetic anomaly may add substantially to resources

Horizonte Minerals (HZM LN) 20.5p mkt cap £57.3m - Drilling update from Araguaia returns high grades

Firestone Diamonds (FDI LN) 30.5p mkt cap £98m - Operational progress

Hambledon Mining* (HMB LN) 4.13p mkt cap £21.35m - Drilling update from underground programme

Central Rand Gold (CRND LN) 1.36p mkt cap £22m - Survival steps facing acid mine drainage

Perseus Mining (PRU AU) AUS$3.10 Mkt Cap, AUS$1313 -

African Aura (AAAM LN) 290p mkt cap £250m - Institutions and directors over 40% supportive of restructure

Petropavlovsk (POG LN) 1035p, mkt cap £1953m - Results show impact of higher costs on lower grade prod'n

BUY - Target 1368p

Solomon Gold (SOLG LN) 28p, mkt cap £75m - Newmont takes Guadalcanal jv forward on high grade results

Mwana Africa (MWA LN) 7.4p mkt cap £39.4m - Funding cancelled and gold production update

Petropavlovsk (POG LN) 992p, mkt cap £1,863m - Results meeting highlights costs and exceptional charges

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