Gold tumbled this week close to a three-year low under US$1,200 per ounce, hit by receding inflation fears, upbeat US data, a strong dollar and expectations of an end to the US Federal Reserve’s quantitative easing stimulus.
Other commodities experienced mixed fortunes as traders also eyed China’s easing liquidity crisis and stronger global stock markets.
PRECIOUS METALS: Gold dived under US$1,200 on Thursday, before plunging on Friday to US$1,180.50 per ounce, which was the lowest level since Aug. 3, 2010.
The precious metal — whose twin drivers are jewelry and investment demand — has seen its value wane recently in response to a strong greenback, which makes dollar-priced gold more expensive for buyers using rival currencies, weighing on demand.
“The traditional drivers of demand for gold have all weakened or reversed in the last few months,” Capital Economics commodities analyst Julian Jessop said.
“Demand for protection against inflation has faded as the Fed has started to signal the end of quantitative easing in the US. Demand for safe havens has diminished as the worst of the crisis in the eurozone appears to be over,” he said.
By late Friday on the London Bullion Market, the price of gold retreated to US$1,192 an ounce from US$1,295.25 a week earlier.
Silver recoiled to US$18.86 an ounce from US$19.87.
On the London Platinum and Palladium Market, platinum fell to US$1,317 an ounce from US$1,395.
Palladium decreased to US$643 an ounce from US$672.
OIL: Global oil prices rallied as traders drew strength from rising equity markets, upbeat US economic data and easing concerns over the Chinese liquidity crisis.
“This week was mostly macro driven; volumes are very thin and we are simply benefiting from firmer equity markets as concerns over China eased,” VTB Capital analyst Andrey Kryuchenkov said.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in August rallied to US$102.88 per barrel from US$100.19 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August rose to US$97.03 a barrel compared with US$93.24 a week earlier.
BASE METALS: Base or industrial metal prices diverged as traders also tracked the news flow on the liquidity crisis in key consumer China, dealers said.
By Friday on the London Metal Exchange, copper for delivery in three months slid to US$6,764.50 a tonne from US$6,810 a week ago.
Three-month aluminum fell to US$1,777 a tonne from US$1,795; three-month lead rose to US$2,060 a tonne from US$2,026; and three-month tin increased to US$19,775 a tonne from US$19,605.