Scotiabank’s Commodity Price Index edged down by 0.2% in August. The All Items Index remains 4.7% below a year earlier, despite a 10% gain from the bottom in late 2001.

“In August, a sharp drop in the Metal and Mineral Index, and a more moderate decline in the Forest Products Index, just offset stronger energy prices and a surge in the Agricultural Index,” said Patricia Mohr, vice president and commodities specialist, Scotia Economics.

“Strong oil prices are providing a positive backdrop for oil industry investment across Canada,” added Mohr. “New projects starting up this year include the Terra Nova oil field offshore Newfoundland, expansion of oil sands operations in Alberta and the beginning of a major round of refinery expansion in Edmonton to upgrade and refine expanding oil sands and bitumen production.”

The Metal and Mineral Index retreated in August as widespread declines in base and precious metals swamped a small gain in sulphur prices.

After slipping in August to US$310 per ounce, gold prices (London PM Fix) have rebounded to an average of US$317 in September and have jumped over US$322 today, largely on concern over Iraq.

The Forest Products Index declined in August as lumber prices moved to quite low levels — more than offsetting gains in newsprint, linerboard and oriented strandboard.

The Agricultural Index soared again in August as another drought-related surge in wheat, barley and canola prices more than offset lower hog and cattle prices.