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Gold Leads Metals Lower

Gold futures ended lower on Friday, despite a small kick upwards in the value of the greenback.

That saw the Aussie dollar end well under 80 US cents - around 79.30 and down more than 1.2% on the day and over 2% for the week. The US dollar firmed a little as Wall Street shares slid all day for the biggest one day fall of Donald Trump’s Presidency.

Investors were more concerned with the continuing surge in US rates in the wake of another solid month for jobs and wages in January.

On top of that the continuing political instability in Washington, the sell off on Wall Street and worries about results from Apple and Alphabet (Google) combined to send many commodity prices lower.

Gold fell down than 1% for the week, after a 0.8% fall in Comex April futures on Friday which settled at $US1,337.30 an ounce.

That took the week’s loss to around 1.5%, according to FactSet data, and cut its year-to-date gain to 1.8%.

Comex March silver futures slumped 44.6 cents, or 2.6%, to $US16.709 an ounce for a 4.2% slide over the week.

March copper also lost ground - down 0.7% to $US3.188 a pound, for a weekly decline of 0.4%. April platinum lost 0.8% to $US999.40 an ounce, for a loss of 1.9% over the week but March palladium rose 2% to $US1,044.95 an ounce, but still down 3.7% over the week

Iron ore prices regained the $US74 a tonne a tonne level, according to the Metal Bulletin.

The index price ended Friday at $US74.39 a tonne up by $1.51 a tonne - a rise of 2% on the day. The price was one cent lower than the previous Friday’s close of $US74.40 a tonne, but down nearly 6% from the $US79.08 a tonne reached on January 11.

In London LME metal prices were mixed with lead shrugging off the weaker dollar and US jobs report to hit their highest levels in more than six years. But metal prices faded late in the session under pressure from the weaker greenback, and especially the sell-off on Wall Street.

Three month London Metal Exchange lead hit a peak of $US2,685 a tonne, the highest since late July, 2011, before fading to end the day up 0.6% at $US2,680.

Reuters reported: “It’s the time of year when Chinese mining of zinc and lead comes under a lot of pressure when Inner Mongolia shuts down for winter,” said Colin Hamilton, director of commodities research at BMO Capital Markets.

“It’s clearly tightened up the concentrate side of the market and that’s feeding through into LME pricing.”

Shortages of lead concentrate in China have become so severe that treatment charges — the fees that smelters charge to turn ore into metal — have skidded to zero or negative levels in some cases, Hamilton added, according to Reuters.

Three-month LME copper lost 1%t to end the week around $US7,045 a tonne, falling from the week’s high of $US7,188.50.

LME tin went against the weaker trend and added 0.6% to finish the day at $US21,530 as stocks of the metal fell to near all time lows.

Other metals saw LME aluminium down 0.7% on Friday to end the week at $US2,210 a tonne, zinc fell 1.6% to $US3,502 and nickel slid 4.1% $US13,430 a tonne.

View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



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