Commodity prices mainly retreated this week, pressured by a tough economic climate highlighted in part by weakening growth in the world’s second-biggest economy China, market observers said.
Heading into the weekend, all eyes were on the EU, whose leaders on Friday agreed to police thousands of eurozone banks beginning next year as they sought to boost growth in austerity-battered states.
By the close of a two-day summit, France and Germany had patched up differences over how to beat the debt crisis, although the new watchdog for 6,000 banks will come too late to re-float Spanish lenders via a dedicated rescue fund.
Leaders also hailed a 120 billion euro (US$155 billion) package of measures to try and kickstart a climb out of recession as political unrest hits Greece and Spain.
OIL: Crude prices came under pressure from official data that revealed slowing economic growth in China, the world’s biggest energy consumer, which added to weak oil demand in the US, traders said.
China’s economic growth eased for the seventh straight quarter, official data showed on Thursday, but analysts said the slowdown had almost bottomed out.
On Wednesday, the US Department of Energy announced that crude supplies in the US — the world’s largest oil consumer — jumped by 2.86 million barrels in the week ending on Oct. 12, more than twice the amount forecast by analysts.
Oil prices had fallen at the start of the week as a lower demand outlook offset Middle East supply risks caused by tensions between Syria and Turkey, analysts said.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in December stood at US$112.82 a barrel compared with US$114.73 for next month’s expired contract a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate, or light sweet crude, for next month dipped to US$92.08 a barrel, from US$92.24 a week earlier.
PRECIOUS METALS: Prices retreated, mirroring sentiment across many commodity markets, but analysts said gold was set to win fresh support over the next months.
“We suspect that further gains for gold will require a new catalyst as the US dollar recovers more ground and inflation expectations drop back,” Capital Economics economist Julian Jessop said. “But that catalyst is likely to come soon in the form of a renewed escalation of the crisis in the eurozone and a revival of safe haven demand.”
By late Friday on the London Bullion Market, gold dipped to US$1,737 an ounce from US$1,766.75 a week earlier.
Silver fell to US$33.33 an ounce from US$33.79.
COCOA: Prices rebounded from three-month low points despite data pointing to falling demand for chocolate in the US and Europe.
Cocoa futures had fallen the previous week on supply worries in No. 1 producer Ivory Coast.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in December climbed to ￡1,608 a tonne from ￡1,524 a week earlier.
On New York’s NYBOT-ICE exchange, cocoa for December grew to US$2,483 a tonne from US$2,360.