0905 [Dow Jones] COMMODITY SUMMARY: Base metals higher following news of mine closures in response to falling prices, rising cost pressures; drop in USD sparked short-covering rally. Xstrata announced closure of Falcondo ferronickel operation in Dominican Republic for four months, citing low nickel prices and escalating energy costs. Metals could be in for more short-term gains, but outlook gloomy; "weakening demand, as opposed to cutbacks in supply, is the far more dominant pricing variable because it tends to be pervasive, harder to predict in terms of its cyclical duration and doesn't lend itself to being switched on and off," says MF Global's Ed Meir. LME 3-month copper up $220 at $7,575/ton, aluminum +$26 at $2,780, lead +$104 at $1,799, zinc up $84 at $1,744, nickel up $1,340 at $19,390, tin +$450 at $19,750. Fall in USD also lifted gold, helped platinum pare losses to 11-month low. Crude oil bounced as U.S. PPI soared to highest annual rate in 27 years for July, +1.2% vs expected +0.5%. Spot gold trading at $814.40/oz, +70 cents vs NY close, and up from near $780 overnight low. Silver at $13.28, +4 cents, platinum at $1,352, +$7, palladium at $283.50, down $1.50. Nymex September crude +47 cents at $115/bbl.(EFB)
