Gold forged yet another record high this week, as investors sought safety, but most commodity markets plunged on concern that eurozone and US economic woes could spark another fierce global recession.
“The vagaries of macroeconomic data and fickle sentiment towards risk remain the overriding drivers of commodity prices,” Barclays Capital analyst Sudakshina Unnikrishnan said. “Concerns about global growth prospects, coupled with sovereign debt issues in Europe and the US, and fears of a slowdown in emerging markets have left the market with little time to digest anything else.”
“A beneficiary of the ongoing macro uncertainty has been gold, with prices hitting another all-time high this week,” Unnikrishnan added.
PRECIOUS METALS: With most other commodities reeling, gold was the star performer once again, as investors sought the traditional safe-haven precious metal amid the worsening outlook.
“Gold prices have continued to remain underpinned ... as investors continue to fret about sovereign and growth risks,” CMC Markets analyst Michael Hewson said.
The metal, whose twin drivers are investment and jewelry demand, hit an all-time peak of US$1,681.72 an ounce on Thursday.
And among other precious metals, silver reached a three-month high at US$42.23 an ounce, before easing on profit taking. Palladium struck a five-month peak at US$849 an ounce.
By late Friday on the London Bullion Market, gold jumped to US$1,658.75 an ounce from US$1,628.50 the previous week.
Silver eased to US$39.24 an ounce from US$39.63.
On the London Platinum and Palladium Market, platinum dropped to US$1,709 an ounce from US$1,779.
Palladium decreased to US$742 an ounce from US$824.
BASE METALS: Base or industrial metals fell sharply as they were “caught up in the sell-off on financial markets,” Commerzbank analysts said in a research note.
“The combination of a much gloomier US economic outlook, growing economic concerns in China, persisting debt problems of eurozone peripherals and worries about the stability of the euro — as well as rising risk aversion in general — are a deadly cocktail for financial markets,” they added.
“No wonder that commodities, which are often regarded as real assets, but often behave more like a high-risk asset class, have also been badly affected.”
By late Friday on the London Metal Exchange, copper for delivery in three months sank to US$9,189 a tonne from US$9,798 the previous week.
Three-month aluminum fell to US$2,460 a tonne from US$2,624.
Three-month lead dipped to US$2,422 a tonne from US$2,635.
Three-month tin decreased to US$24,650 a tonne from US$28,350.
Three-month zinc slid to US$2,274 a tonne from US$2,486.
Three-month nickel dropped to US$23,085 a tonne from US$24,596.
OIL: World oil prices plummeted on both sides of the Atlantic, driven by weakening growth in the US, the world’s biggest oil consumer, and worries about European energy demand amid eurozone debt contagion.
The energy market was hit particularly hard on Thursday, when New York crude shed US$5.30 and London Brent oil lost a hefty US$5.98.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in September tumbled to US$106.93 a barrel from US$115.91 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for September dived to US$84.70 a barrel from US$95.54 the previous week.