Extending the 7% decline last week, LME copper for delivery in 3 months plunges 4% more to 4285 in European morning. Other base metals also drop amid the spread of swine flu with aluminum sliding 1.5%, zinc losing 4% and lead falling 5%.

Outbreak of swine flu in Mexico sparked worries all over the world. In Asia, investors compared it with SARs, occurred in 2003, which dragged the stock markets down to multiyear lows while regional economies took several years to recover.

Frankly, before the flu news, copper price has already reached a medium-term peak at 4819 on March 15 as favorable news has played out and fundamentals remained weak. Although LME inventory fell further to 425.3M metric tons, it's still gained 25% year-to-date. Moreover, the robust surge in imports in March was largely driven by the favorable arbitrage between Shanghai (SHFE) and London (LME) copper price. As the arbitrage became no longer profitable, investors lost interest in trading copper now.

Gold price retreats to 905 after rising for 3 consecutive days as pressured by 55-day resistance at 922.4. Dollar's strength as well as sluggish flow in investment demand have also weighed on the precious metal. Investment in the SPDR Gold Trust stayed unchanged at 1104.45 metric tons today As the same time, CFTC's report showed that net speculative long position in gold futures declined by 1528 to 128 367 contracts for the week ended April 21.

Severe selling pressure has sent platinum price 3% lower to 1148 as automakers in the US announced more disappointing news. GM said it will reduce the number of dealers by 42% to 3600 and slash 21000 more US factory jobs by the end of 2010. Meanwhile, Chrysler reached a contract with the labor union in which the workers will have to accept worse terms so as to prevent the company from going bankrupt. However, it remains uncertain on whether Chrysler can survive until April 30.

Oil price drops further to 48.15 in European session as driven by weakness in stock markets. The UK's FTSE 100 Index loses 0.83% with airline shares leading the fall. Investors concern the spread of the disease will hammer earning of the industry.