Currencies and Metals Outlook- An Excerpt from CRB'S Futures Market Service CURRENCIES The dollar index corrected down to a 4-week low from its recent 10-3/4 month high, while the euro corrected upward to a 4-week high from its recent 11-1/4 month low. The dollar/yen is consolidating just under its recent 7-1/2 month high, which was an upward correction from November’s 14-year low. Bearish factors for the dollar include (1) the action by EU governments to approve a $61 billion aid package for Greece, (2) the Feb US trade balance, which widened more than expected, and (3) reduced safe-haven demand for the dollar after the S&P 500 Index climbed to a 1-1/2 year high. Bullish factors include (1) the larger-than-expected increase in Feb US long-term TIC flows, a sign of strong foreign demand for dollar assets, and (2) the prediction from Morgan Stanley that the euro will weaken further because the countries that share the euro will not be able to execute their promised fiscal austerity programs. Recent strength in the euro may prove fleeting as economic growth in the Euro-Zone underperforms other developed economies. The euro corrected upward to a 4-week high against the dollar from its recent 11-1/4 month low after Greece was offered a 45 billion euro ($61 billion) rescue package. The respite in the euro’s downward momentum may prove only temporary as market expectations are for the Euro-Zone economy to expand 1.2% this year, compared with 3.0% in the US. Tougher fiscal austerity measures implemented by the Euro-Zone countries may sacrifice economic growth and prompt the ECB to err more on the dovish side, keeping interest rates near record lows, and the euro’s downtrend trend intact. METALS GOLD— Jun gold prices climbed to a 4-month high, modestly below the all-time nearest-futures high of $1,226.40 an ounce. Bullish factors include (1) the slide in the dollar to a 3-week low, (2) safe-haven demand due to sovereign debt concerns in Europe, and (3) demand for gold as a store of value since the massive liquidity programs of global central banks may debase their respective currencies and fuel inflation. A lack of inflation is a bearish factor with the +1.1% y/y increase in Mar core CPI matching the smallest gain in 44 yrs. As of Apr 6, large specs held a large long position of 203,446. The Gold Council reported that with gold prices up 38% in Q4 vs the year-earlier, gold demand fell -24% y/y in Q4 to 819.7 MT, Q4 jewelry consumption fell -8% y/y, Q4 industrial demand rose +11% y/y, and Q4 gold supply fell -8% y/y to 898 MT. COPPER—May copper prices extended their 2-1/2 month up move to a 20-1/2 month high. Bullish factors include (1) strong Chinese demand with Q1 China copper imports surging +14% y/y to 1.07 mln tons, and (2) China’s manufacturing sector expanding for the 13th straight month in Mar and the US manufacturing sector expanding at its fastest pace in over 5-1/2 years in Mar, signaling strength in the global economy. Bearish factors include (1) the -2.1% m/m decline in Feb US new-home sales to a record low 308,000, (2) the report from the WBMS that the global copper market ended 2009 in surplus by 209,300 MT, signaling adequate supply and slack demand, and (3) ICSG’s estimate of a 539,000 MT global copper surplus for 2010. Large specs as of Apr 6 increased their large long position to 22,946.

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