Commodity prices mostly fell this week under pressure from the US Federal Reserve’s reluctance to inject fresh stimulus into the sluggish US economy and amid stubborn recession fears in Europe.
Markets were also rocked by mounting concern that Spain could be engulfed by the euro-area debt crisis that has already sunk Greece, Ireland and Portugal.
Most markets experienced holiday-shortened trade ahead of the Easter holiday break.
Minutes from the Fed’s policy meeting last month, published on Tuesday, dealt a blow to hopes of more quantitative easing (QE) stimulus measures to boost US growth, but the news helped the US dollar.
A stronger greenback often makes US dollar-priced raw materials, like gold and crude oil, more expensive for buyers using weaker currencies, denting demand and weighing on prices.
PRECIOUS METALS: Gold hit a three-month low at US$1,612.20 per ounce after the Fed news, dragging other precious metals lower.
“Precious metals prices remain under pressure as concerns about demand persist, with markets focusing on a potential slowdown in China and the Fed downgrading the possibility of further QE,” Barclays Capital analyst Sudakshina Unnikrishnan said.
By late Thursday on the London Bullion Market, gold dipped to US$1,631 an ounce from US$1,662.50 the previous week.
Silver slid to US$31.273 an ounce from US$32.43.
On the London Platinum and Palladium Market, platinum dropped to US$1,592 an ounce from US$$1,640.
Palladium weakened to US$635 an ounce from US$651.
OIL: World oil prices also tumbled after the US government reported a big jump in the nation’s crude stockpiles, adding to concerns about growth in the world’s biggest oil-consuming nation.
The US Department of Energy said on Wednesday that crude reserves soared by 9 million barrels in the week ending March 30. That was a far bigger increase than the average analyst estimate for 1.9 million barrels.
By late Thursday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month dropped to US$122.17 a barrel from US$$123.24 the previous Friday.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for next month fell to US$101.97 from US$103.33.
BASE METALS: Prices mostly fell on the strong US dollar and amid an absence of Chinese buyers because of public holidays.
By late Thursday on the London Metal Exchange, copper for delivery in three months fell to US$8,405 a tonne from US$8,454.25 the previous Friday.
Three-month aluminum fell to US$2,094 a tonne from US$2,144.
Three-month lead eased to US$2,020 a tonne from US$2,023.