Many global commodity markets fell this week as traders worried that the Cyprus situation would reignite the eurozone’s sovereign debt crisis and dent global demand for raw materials. However, precious metal gold won ground as many investors sought a safe place to park their cash.
OIL: World crude prices sank as fears intensified over Cyprus. The market also fell as traders banked profits despite strong manufacturing data in China, which is the world’s biggest consumer of energy.
Prices had rallied in New York on Wednesday after the US Department of Energy reported an unexpected decline of 1.3 million barrels in oil stocks in the week ending March 15. Crude futures were also strengthened by the US Federal Reserve’s widely expected move to maintain its stimulus program on Wednesday.
However, by late Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in May slid to US$107.13 a barrel compared with US$109.90 one week earlier.
On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for May reversed to US$92.65 a barrel from US$93.48 for the expired April contract one week earlier.
PRECIOUS METALS: Precious metal gold gained ground, winning support from its long-held status as a safe-haven investment in times of economic turmoil.
“The yellow precious metal remains well-supported thanks to the ongoing uncertainty over Cyprus,” Commerzbank analysts said in a note to clients.
By late Friday on the London Bullion Market, the price of gold increased to US$1,607.75 an ounce from US$1,595.50 a week earlier.
Silver gained to US$29.06 an ounce from US$28.91.
On the London Platinum and Palladium Market, platinum eased to US$1,580 an ounce from US$1,593, while palladium slid to US$754 an ounce from US$774.
BASE METALS: Base or industrial metal prices were also dented by worries centered on Cyprus.
“Base metal prices sold off again over the past week, as macro tail risk concerns mounted in relation to the Cyprus bailout,” Barclays analyst Gayle Berry said.
“In the short term, this will likely continue to drive performance, although we believe that conditions in China — which had been market participants’ main preoccupation, before this week’s events in Europe — have started to offer signs of sustained improvement,” Berry said.
By late Friday on the London Metal Exchange, copper for delivery in three months fell to US$7,685 per tonne from US$7,770.50 one week earlier.
Three-month aluminum edged down to US$1,945 per tonne from US$1,968.75; three-month lead fell to US$2,186 per tonne from US$2,226.25; and three-month tin dipped to US$22,850 a tonne from US$23,900.