Source: The Canadian Press

Bank of Nova Scotia’s monthly commodity price index climbed 4.2% in April amid higher prices for metals and minerals, but the bank warned this could be the “high-water mark” for 2010.

Metals and minerals led the index’s advance, jumping 10.3% month over month as the global economic recovery led to higher prices for base metals, precious metals and coal.

Forest products were also higher, with both building materials and pulp and paper prices gathering steam in April. NBSK pulp prices in the U.S. market jumped from US$910 per tonne in March to $960 in April and continued to climb to $1,000 in May _ a new record high.

The agricultural index edged up, adding 0.2% in April amid small increases in price for canola, barley and livestock.

The oil and gas index was the only decliner in the month, losing 5.6% due to lower prices for liquefied petroleum gas and natural gas exports which are linked to new shale developments across North America.

Scotiabank commodity analyst Patricia Mohr said the commodity price index may have hit a ceiling for now.

“While commodity prices surged in early April, this strength may have represented the ‘high-water’ mark for 2010… with investors fleeing risk in May,” Mohr wrote.

“Funds have shifted from equities and commodities back into ‘safe-haven’ U.S. dollar Treasury securities.”

This is due to fears that the European debt crisis could moderate the pace of global recovery, as well as concerns that China’s growth will slow down as the government tightens its monetary and credit policies.