sed around 80% of its rise in summer 2012 as farmers have planted a much larger area, which means a higher likelihood of much higher future supply. We stay short for now as we think this downtrend has further to go. We are also long gasoil vs. Brent. Global inventories are very low and demand from Asia is picking up, consistent with the economic data, which we expect to improve further over the coming months. An expected cold snap should also help push demand higher through January * We took profit on our long position in gold last Friday and year-to-date gold is down around 1%. We believe many investors had bought gold over the past few years to hedge against the risk of “QE unlimited.” The recent FOMC minutes, however, have since raised the risk of an early end to QE, reducing to need to hedge through gold. The risk is thus that a number of market participants will reduce their gold hedges, pushing gold prices down further. We still like gold as a hedge against long-term inflation risks once global growth returns to trend and we would look to reopen the position at around $1,550/oz.. Jan Loeys (1-212) 834-5874 jan.loeys@jpmorgan.com John Normand (44-20) 7134-1816 john.normand@jpmorgan.com Nikolaos Panigirtzoglou (44-20) 7134-7815 nikolaos.panigirtzoglou@jpmorgan.com Seamus Mac Gorain (44-20) 7134-7761 seamus.macgorain@jpmorgan.com Matthew Lehmann (44-20) 7134-7813 matthew.m.lehmann@jpmorgan.com Leo Evans (44-20) 7742-2537 leonard.a.evans@jpmorgan.com If you no longer wish to receive these e-mails then click here to unsubscribe www.jpmorganmarkets.com ________________________________ Analyst certification: I certify that: (1) all of the views expressed in this research accurately reflect my personal views about any and all of the subject securities or issuers; and (2) no part of my compensation was, is, or will be directly or indirectly related to the specific recommendations or views expressed herein. Important disclosures, including price charts, are available for compendium reports and all J.P. Morgan–covered companies by

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