Oil prices rallied this week as traders tracked talks on Iran’s nuclear program and news of tighter US supplies, while cocoa futures hit two-year highs.
Precious and base metals fell on disappointing Chinese economic data and a weaker US dollar, traders said.
OIL: Crude prices advanced as traders reacted to developments over Iran, the outlook for the US Federal Reserve stimulus and data out of the US and China.
Talks between six world powers and major oil producer Iran over Tehran’s controversial nuclear program entered a third day on Friday in Geneva and with markets uncertain of a deal being struck.
According to a draft proposal, the US, Britain, China, France, Russia, and Germany want Iran to freeze for six months key parts of its nuclear program.
In return Iran would get minor and, Western officials insist, “reversible” sanctions relief, including unlocking several billion dollars in oil revenues and easing trade restrictions on precious metals and aircraft parts.
Oil traders reacted also to the release on Wednesday of the minutes of the Fed meeting last month, which showed the US central bank has considered the possibility of tapering its huge stimulus program in the coming months.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in January jumped to US$110.33 a barrel from US$107.88 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for January gained to US$94.69 a barrel from US$93.83.
PRECIOUS METALS: Gold and silver prices tumbled in reaction to US stimulus expectations.
Gold is seen as a hedge against inflation, which some argue could be pushed higher by the Fed’s huge bond-buying program.
By late Friday on the London Bullion Market, the price of gold slid to US$1,246.25 an ounce from US$1,287.25 a week earlier.
Silver dropped to US$19.93 an ounce from US$20.63.
On the London Platinum and Palladium Market, platinum slipped to US$1,396 an ounce from US$1,438.
Palladium retreated to US$721 an ounce from US$729.
BASE METALS: Industrial metals were mixed as a weaker US dollar offset downbeat Chinese data, making commodities cheaper amid slack demand.
Also on Thursday, HSBC bank said its preliminary purchasing managers’ index of manufacturing for China came in at 50.4, down from a final reading of 50.9 last month, which was a seven-month high. The figures — the result of weaker export orders — threw a cloud over prospects for the Chinese economy.
By Friday on the London Metal Exchange, copper for delivery in three months rose to US$7,077.75 a tonne from US$6,965.50 a week earlier, while three-month aluminum climbed to US$1,793 a tonne from US$1,784.50
Three-month lead grew to US$2,108 a tonne from US$2,089, while three-month tin dipped to US$22,845 a tonne from US$22,900.
COCOA: Prices jumped on tight supplies of the raw material.
Prices reached the highest points since September 2011, at US$2,820 a tonne in New York and ￡1,788 a tonne in London deals.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in March advanced to ￡1,758 a tonne from ￡1,713 a week earlier.
On ICE Futures US, cocoa for March climbed to US$2,784 a tonne from US$2,675 a week earlier.
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The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
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Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) quarterly sales topped estimates, reinforcing investor hopes that the torrid pace of artificial intelligence (AI) hardware spending would extend into this year. The go-to chipmaker for Nvidia Corp and Apple Inc reported a 39 percent rise in December-quarter revenue to NT$868.5 billion (US$26.35 billion), based on calculations from monthly disclosures. That compared with an average estimate of NT$854.7 billion. The strong showing from Taiwan’s largest company bolsters expectations that big tech companies from Alphabet Inc to Microsoft Corp would continue to build and upgrade datacenters at a rapid clip to propel AI development. Growth accelerated for
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