The energy and base metal complexes were the best performers among the commodities. WTI crude oil prices gained +1.9% to settle at 72.68. The gauge rose to as high as 73.23 in NY session as the release of better-than-expected initial jobless claims and retail sales data boosted stock prices. Natural gas price surged +6.1% to 3.93 as rise in inventory was lower than forecasts, as reported by the US Energy Department. Base metals' broad-based rally was driven by China's strong imports and fixed assets investment data. LME copper for 3-month delivery jumped 4% to 8-month high at 5376. Other metals, aluminum, lead, nickel and zinc also soared by +3%, +3.8%, +5.9% and +5.8%, respectively.

Initial jobless claims in the US plunged to 601K, the lowest level since the week ending January 24, in the week ending June 5 from 625K in the previous week. Looking at the 4-week average of 622K, it's clearly shown that initial jobless claims have been declining. Although continuing jobless claims in the week ending May 30 rose to a new high of 6.816 has retained some negative signals in the market, the pace of increase has moderated over the last few weeks. Overall, the development further indicated the worst of recession has been behind us.

US' retail sales rose +0.5% in May, better than consensus of +0.4% and -0.2% in the prior month, as boosted by a robust +3.6% rise in gasoline sales. This was probably the reason driving Nymex gasoline price up by +2.5% Thursday. However, mind that the higher gasoline sales were due to higher gasoline price instead of higher demand.

Stock markets advanced after the reports. Dow Jones Industrial Average rose +0.37% to 8770 while S&P 500 Index gained +0.61% to 944.9. In Asia Friday, the MSCI Asia Pacific Index extends gains by +0.4% while Japan's Nikkei 225 Average adds +1%.

Strength in base metal complex was spurred by the strong infrastructure-related spending in China as shown in the urban fixed asset investment data which surged +39% yoy in May (+32.9% on a year-to-date basis through May). The bulls were also excited about the strong import data which showed that imports of copper rose to a record 423K metric tons. However, aluminum imports came in -25% lower than April's level. Though the amount was still huge at 330K metric tons, it indicated China's purchase has slowed down.

Gold price edged +0.85 higher to settle at 962 while silver added +1.8% to close at 15.49 Thursday. While weakness in USD helped support precious metals' rally, the struggle remains tough as strong economic data in the US may again arouse speculations that the Fed will increase interest rate earlier than anticipated. Although we believe it's unlikely for the central bank to hike rate this year, in the current market environment that sentiment has so much power, we expect gold's upward movement will remain choppy.