Gold steadied and most base metals were higher in holiday-thinned trading on Thursday, with investors assessing the latest developments of a virus relief package in the US and the final announcement of a post-Brexit trade deal.
British and EU negotiators have finalized their historic post-Brexit trade agreement, averting the threat of an acrimonious breakup.
Republicans on Thursday objected to US House of Representatives Majority Leader Steny Hoyer’s attempt to replace the US$600 payments in the latest COVID-19 pandemic relief legislation with the US$2,000 payments that US President Donald Trump said he wants.
Democrats are to try again tomorrow, with a similar new bill that would be put to a full vote on the House floor.
“Gold prices are benefiting from a Brexit trade deal breakthrough that paved the way for a weaker dollar,” Oanda Corp senior market analyst Edward Moya said.
The metal could see further gains if the US stimulus impasse is resolved, he said.
Investors are looking past Trump’s demand for changes to US pandemic relief, expecting that stimulus spending will come sooner or later.
Spot gold edged up 0.3 percent at US$1,874.02 an ounce in New York, but were down 0.6 percent for the week. Prices are up nearly 24 percent this year, on course for the biggest annual gain in a decade.
Futures for February delivery on the Comex rose 0.3 percent to settle at US$1,883.20, down 0.4 percent weekly.
Aluminum led gains among most base metals on the London Metal Exchange (LME), rising 1.2 percent to settle at US$2,030 a tonne, while copper fell 0.7 percent.
The LME’s index of base metals last week reached a seven-year high, driven by prospects of a new long-term bull market for commodities as economies recover from the coronavirus crisis.
Separately, a strike that has snarled Argentina’s soybean industry would continue during the Christmas holidays, further delaying 170 ships waiting at ports.
Soybean crushers at export plants agreed to extend a strike over wages during the Christmas season, according to a statement on the Web site of union group Federacion Aceitera.
The strike, which has been going on for 15 days, has delayed shipments from the world’s top exporter of soy products, sending Chicago futures rallying.
There are more than 170 ships waiting to load and unload at Argentina’s Bahia Blanca, Necochea-Quequen and Gran Rosario ports, Andres Alcaraz, a communications manager at export group Ciara-Cec, said by telephone on Wednesday.
The strikes have caused delays to US$1.7 billion of exports in addition to costs directly related with the action, such as demurrage, he said.
The Argentine strike has fueled soybean supply concerns at a time of vigorous global demand, sending prices of the oilseed above US$12 a bushel, the highest in six years.
Soybean oil prices also reached the highest level since 2014, while meal futures are at a four-year high.
Prices have gained on speculation that traders will need to turn to US supplies to meet their contract needs.
The Argentine strikes could at some point end up affecting wheat supplies to Brazil, which imports the majority of its needs from its neighbor.
For now, Brazilian millers are well-supplied, as the nation has just reaped its domestic crop and only a few mills import Argentine wheat this time of the year, said Rubens Barbosa, head of industry group Abitrigo.
“If the strike isn’t solved in the coming weeks, some mills could be affected,” Barbosa said in a telephone interview.
Brazil can also import 750,000 tonnes of wheat free of duty from nations outside the Mercosur bloc, Barbosa added.
The alternatives to the Argentine grain are usually the US, Russia and Canada.
Additional reporting by staff writer
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