Commodity prices had a mixed week as traders tracked Chinese and European interest rate cuts, a strong US dollar and disappointing new jobs data in the US.
“Commodity market sentiment has been almost exclusively driven by central bank decisions over the last two days,” Currencies Direct analyst Alistair Cotton said.
The European Central Bank (ECB) cut its main interest rate by a quarter point on Thursday last week to a record low at 0.75 percent, but did not announce any other stimulus measures.
In London, the Bank of England (BOE) kept its main rate at a record low 0.50 percent, but unveiled ￡50 billion (US$78 billion) in extra stimulus cash to boost Britain’s recession-hit economy.
China trimmed rates for the second time in a month in a shock move. However, some analysts feared the cut indicated that the Chinese economy, the world’s second-biggest, was slowing more quickly than expected.
OIL: Oil prices managed to rally, despite China worries, as sentiment was buoyed by supply-side worries in Norway.
“Crude oil markets were buoyant this week. Fundamentals set the tone for the move upwards, with strikes in Norway at the core,” Barclays Capital analyst Sudakshina Unnikrishnan said.
State oil group Statoil said on Thursday it was preparing to shut down all production on the Norwegian continental shelf (NCS) from the start of next week.
The European single currency plunged to one-month lows in the wake of the Thursday’s ECB rate cut and Friday’s US jobs data which showed a net 80,000 new jobs in June, well short of forecasts.
By late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery next month was higher at US$98.37 a barrel from US$95.43 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for August rallied to US$84.68 from US$82.20.
BASE METALS: Base metals prices mostly fell.
“Market reaction to the monetary easing prompted gains in the metals and across risk assets. The gains, however, were quickly surrendered,” Fast Markets analyst James Moore said.
By late on Friday on the London Metal Exchange, copper for delivery in three months fell to US$7,573 a tonne from US$7,684 a week earlier.
Three-month aluminum edged up to US$1,910 a tonne from US$1,905. Three-month lead slipped to US$1,841 a tonne from US$1,842. Three-month tin dipped to US$18,750 a tonne from US$18,910. Three-month nickel retreated to US$16,513 a tonne from US$16,690. Three-month zinc decreased to US$1,840 a tonne from US$1,860.
PRECIOUS METALS: Gold and palladium lost their shine, but platinum and silver nudged higher.
By late ob Friday on the London Bullion Market, gold fell to US$1,587 an ounce from US$1,598.50 a week earlier.
Silver rose to US$27.32 an ounce from US$27.08.
On the London Platinum and Palladium Market, platinum increased to US$1,450 an ounce from US$1,428.
Palladium dropped to US$577 an ounce from US$578 an ounce.