For all the gloom and volatility, commodities were not the big alternatives for investors last week.
Sure there was some interest in gold, copper and oil, but not to the extent you might have thought given the bad news about bank losses, the US economy, property trusts in Britain, property companies in Australia and gloom in Japan.
It's as though investors of all sizes have decided to be careful while they wait and see what the US Fed does with interest rates.
President Bush's mooted emergency package of $US140 billion to $US150 billion came and went and will probably get caught up in election wrangling before anything meaningful can emerge.
Oil rose for the first day in four in New York on Friday after the Bush package was revealed.
But it was more the surprise rise in US consumer confidence in December on the back of easier petrol prices that helped oil move higher.
Economists took the news to suggest the economy may be able to withstand rising fuel prices and declining home values: but it's historical and when the index for this month is produced, it will no doubt show the impact of the gloomy news, especially heavy market plunges.
Oil has fallen from a record $US100.09 a barrel earlier this month to $US90.57 on Friday on Nymex.
That was down 2.3% for the week. But oil is still 79% above where it was a year ago.
Helping oil and other commodities was the long weekend with traders covering themselves for the non trading day tonight. Given the volatility in markets at the moment, traders didn't want to be 'short' over the long weekend, especially if there's more bad news around.
With the world economy slowing, the International Energy Agency last week cut its forecast for global oil demand in the first quarter by 100,000 barrels a day.
Gold had a modest rise on Friday but it too vacated the record heights prices got to earlier in the week.
February gold futures rose $US1.10 to $US881.60 on Comex in New York on Friday. That was sharply down from the record $US916.10 an ounce reached last Tuesday, January 15.
Gold fell 1.8% last week, the first fall for a week in a month.
March Comex silver rose 21.5 USc to $US16.225 an ounce. The metal gained 15%.
Copper had a good week with London Metal Exchange stocks hitting a two month low, but suggestions of a drop in Chinese demand this year at the weekend won't help sentiment this week.
March Comex copper futures rose 1.7% on Friday to $US3.2345 a pound but was still down 2.1% last week as those recession fears in the US made traders cautious.
Still traders took heart from the drop in LME stocks with some claiming the fall may be signaling an increase in demand from China, the world's major consumer. That's what happened a year ago.
Bloomberg reported that China's copper consumption will grow 8% this year, sharply down from the 22% rise last week
Bloomberg quoted leading Chinese metal group, Maike Metal International Group in its report. The firm said credit tightening policies in China might lower demand in the coming year as the authorities seek to slow growth in the world's fastest growing major economy.
Bloomberg said "China's copper consumption will rise to 5.13 million metric tons in 2008 from 4.74 million tons last year, Shen Haihua, general manager of Shanghai Maike Dickson Investment Management Co., a unit of the trader, said in an interview yesterday. The 2008 forecast allows for a 10 percent cut in consumption attributed to credit tightening.
"Still, we believe Chinese consumption growth this year will make up for a slowdown in Western countries led by the U.S.,'' Shen said, adding that 5.13 million tons was a "conservative'' forecast.
"Domestic production of refined copper may rise to 3.89 million tons in 2008 from 3.47 million tons last year, Shen said, adjusting a forecast made in October.
"The balance will be made up by imports and de-stocking, he said. Imports may fall to 1.32 million tons this year from 1.48 million tons last year, he said. Maike's consumption figure is calculated as domestic output plus net imports adjusted for inventory changes."
The Maike Group was China's biggest copper importer in 2007, bringing in 250,000 tonnes, or 16% of total imports, according to Shen.
Stockpiles monitored by the LME fell 2,325 tonnes to 183,225 tons, the lowest since November 21. The decline marked the longest slump in supplies since July. Copper prices are up 12% in the past month as LME supplies have fallen 6.4%.
