Even though gold and silver eased on Friday and for the week, it was a confirmation that the mini- resources surge that seemed over a couple of weeks ago, has returned – and without much in the way of speculative help from Chinese investors who spent most of last week coping with major changes to financial rules by worried regulators.
Oil, iron ore and copper all enjoyed solid runs over the week, along with other metals.
Iron ore prices are up more than 16% for the month so far, with half that rise coming in the past week (see separate story). London Metal Exchange and US copper futures rose 4%.
Oil is rising because of expectations this week’s oil producers meeting (see separate story) will extend the 1.8 million barrels a day production cap past March 31 next year to the end of 2018.
Copper is back on track because of rising demand, and the same applies to iron ore where there was some speculative help from investors ahead of the crackdown on shadow banking lending.
So Comex gold futures ended lower in New York in a holiday shortened session on Friday, even though the US dollar again weakened and had its weakest week for months.
In fact analysts said gold (and silver) defied their typical relationship with the dollar and followed the greenback lower after Forex traders wondered abut the number of rate rises in 2018, and when they might come (if at all?).
December gold futures fell $US4.90, or 0.4%, to settle at $US1,287.30 an ounce in New York, down around 0.7% for the week which was its first weekly fall of the past three.
The US Dollar Index eased 0.4% at 92.78, a near two-month low. It fell 0.9% of the week and is down 9% so far this year. The Aussie dollar maintained its reading of around 76.20 US cents for a gain of half a cent over the week.
December silver fell 12 cents, or 0.7%, to settle at $US16.992 an ounce. For the week, the metal declined about 2.2%, representing its first weekly drop in the last three.
Elsewhere on Comex, December copper picked up 3.2 cents, or 1%, to $US3.169 a pound on Friday, to be up 4% for the week in New York and a similar amount in London where the three month price ended the week just above the $US7,000 a tonne mark, a gain partly due to the weaker greenback.
Three-month LME copper on the ended up 0.6% at $US7,002 a tonne, having touched $US7,015, its highest since the start of this month. Reuters pointed out that LME stocks have dropped 30% since the start of September, always a sign of rising demand.
Helping prices was an outbreak of industrial disputation at BHP Billiton’s Escondida copper mine in Chile where workers ended a 24-hour strike on Friday but could down tools again next week over the company’s planned layoffs.
Production was disrupted earlier this year by a 40 day strike at the mine over a new award – the existing one was extended for 18 months and workers now think BHP is trying to pressure them by holding out the threat of more job cuts, according to their union.
Other LME metal prices on Friday saw aluminium rose 0.9% to $US2,132 a tonne, zinc close down 0.1 at $US3,233, lead up 1.1% at $US2,480, tin was up half a per cent at $US19,510 a tonne and nickel rose 0.9% to end at $US12,035.
