Sun, May 03, 2015 - Page 15 News List

Commodities mostly up on weak dollar

AFP, LONDON

Commodities mostly rose this week in holiday-shortened trade, with oil and base metal prices rebounding as the US dollar sank on weak US economic growth and the uncertain interest rate outlook.

The world’s biggest economy posted first-quarter GDP growth of just 0.2 percent, well below the 1 percent rate forecast by analysts and sharply down from 2.2 percent pace in the previous three months.

The euro soared to a two-month high of US$1.1285 on Friday in the wake of the poor data, and after the US Federal Reserve left open the timing of an interest rate hike.

OIL: World oil prices advanced to new peaks this year, winning traction from the first drop in US stockpiles for six months, and as the US dollar weakened against the euro.

“Crude oil built on gains made after Wednesday’s inventory data to make new 2015 highs,” CMC Markets analyst Jasper Lawler said.

The latest jump came after the US Department of Energy inventory report showed a 500,000-barrel drop in petroleum stocks to 61.7 million barrels at the key Cushing, Oklahoma trading hub.

While the decline was modest, it marked the first drop since late November. Traders are taking the decline as a sign producers are cutting back at key US petroleum sites, analysts said.

By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in June rose to US$66.19 a barrel from US$65.21 the previous week. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for June rallied to US$59.12 compared with US$57.22.

PRECIOUS METALS: Gold fell, dragging most precious metals lower as dealers digested the US rate outlook.

The Fed left open its timeframe for a rise in ultra-low interest rates on Wednesday, following a winter slowdown that stalled US economic growth.

After more than a year pointing to the middle of this year for when it would begin raising the federal funds rate, the Federal Open Market Committee stopped offering its “forward guidance” and made clear it would wait for more signs of economic progress before the first rate rise in nearly nine years.

The decision left uncertain the path toward a slow series of rate rises that are likely to shift global markets and support the stronger dollar.

“The gold price hardly profited at all from the weak US economic data and the resulting significant depreciation of the US dollar,” Commerzbank analysts said.

By Friday on the London Bullion Market, the price of gold slid to US$1,175.95 an ounce from US$1,183 the previous week.

Silver firmed to US$16.17 an ounce from US$15.83.

On the London Platinum and Palladium Market, platinum fell to US$1,127 an ounce from US$1,128.

Palladium eased to US$772 an ounce from US$774.

BASE METALS: Base or industrial metals forged higher as dealers also took their cue from the US dollar, and from hopes of fresh Chinese economic stimulus.

“Macroeconomic data has been rather mixed, offering the metal markets little clear direction either way and leaving them to look to the dollar again,” UniCredit analysts said in a note to clients.

“And with the US currency somewhat softer of late, the fundamentally weaker metals have found support and the stronger ones have extended gains.”

By Friday on the London Metal Exchange, copper for delivery in three months rallied to US$6,343 a tonne from US$6,040 the previous week.

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