Commodity prices saw mixed fortunes this week, as traders tracked concerns over the world economic outlook, driven by fresh debt tensions in the eurozone, most notably Spain.
“Commodity prices have posted widespread and broad-based price weakness over the week,” Barclays Capital analyst Sudakshina Unnikrishnan said.
“The re-emergence of China and US growth concerns, plus worries over Spanish sovereign debt, are undermining commodity prices,” Unnikrishnan said.
“We recommend being alert to buying opportunities in the weeks ahead, especially in base and precious metals,” the analyst said.
Investors meanwhile drew some comfort from successful Spanish bond auctions that partly soothed concerns over the eurozone debt crisis.
OIL: World oil prices were mixed, with traders torn between global economic growth concerns and simmering tensions over key crude producer Iran.
The market rose on Tuesday after a successful Spanish bond auction, encouraging US corporate earnings and the higher global growth forecasts from the IMF. Prices were also supported by renewed concerns over the standoff between key producer Iran and the West over Tehran’s nuclear program.
However, prices tumbled on Wednesday after figures showed a much larger-than-expected increase in US crude inventories, indicating weak demand in the world’s top consumer.
US crude stocks jumped by 3.9 million barrels last week, more than four times the expected gain of 900,000 barrels. The market clawed back some ground on Friday, supported by rising European stock markets and a weaker US dollar as investors drew comfort from a successful longer-term Spanish bond auction and rising German business confidence.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in June fell to US$119.21 a barrel, compared with US$121.28 for the May contract the previous week.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for May rose to US$103.88 from US$103.01.
PRECIOUS METALS: Most prices lost ground as traders worried about the global outlook and falling stocks.
“Gold is currently behaving more like a risky asset class and less like a safe haven,” Commezbank analysts said.
“However, the price is likely to regain its former peaks by the end of 2012 as a result of its return to a store of value, low interest rates and the appetite for gold in China,” they said.
By late Friday on the London Bullion Market, gold slipped to US$1,641.50 an ounce from US$1,666.50 the previous week.
Silver dropped to US$31.79 an ounce from US$32.36.
On the London Platinum and Palladium Market, platinum retreated to US$1,579 an ounce from US$1,600.
Palladium advanced to US$666 an ounce from US$643.
BASE METALS: Prices sank to their lowest levels since early January, before ending on a mixed note.
By late Friday on the London Metal Exchange, copper for delivery in three months rose to US$8,181 a tonne from US$8,040 the previous week.
Three-month aluminum rose to US$2,081 a tonne from US$2,078.
Three-month lead climbed to US$2,117 a tonne from US$2,062.
Three-month tin declined to US$21,650 a tonne from US$22,525.
Three-month zinc rose to US$2,024 a tonne from US$2,008.