Oil, Gold Lead Commodities Rebound
Commodity prices, led by by gold, oil and copper surged last week for some of the best gains for a year or more.
It was a startling turnaround from the previous two weeks when losses and red ink flowed.
Comex gold futures settled slightly higher for their biggest weekly rise for more than a year, off the back of another bout of weakness for the US dollar until Friday when the US dollar index rose.
The US dollar index rose 0.6% for Friday and lower over the week (the yen jumped sharply) while the Aussie dollar ended Friday around 79.13 US cents, for a gain over the week of one cent.
April gold futures on Comex in New York added 90 cents, or less than 0.1%, to $US1,356.30 an ounce, its highest level in nearly three weeks. Gold rose 3% for the week, which was the biggest weekly gain since April 2016.
Oddly the gain came as financial markets shook off the doubts from the recent slide and staged a solid rebound.
The gain on Friday came despite more volatility in fixed interest markets - yields on 10 year US bonds ended just under 2.87%. That was after a peak during the day of 2.940%, the highest yield level since January 2014.
That had no impact on financial markets unlike two weeks ago when a similar sized rise (to just under 2.9%) - shook confidence.
Comex March silver shed 8.4 cents, or 0.5%, to end at $US16.712 an ounce, for the week it rose about 4%, marking is biggest weekly rise since the last week in December.
And Comex copper jumped sharply for the week in the US - ending the week with a rise of 0.1% on Friday to $3.2485 a pound.
For the week, the metal jumped 7%, for its highest weekly gain since November, 2016.
LME copper prices soared as well in their biggest weekly rise in 15 months as the US dollar again weakened and financial markets recovered their poise after the recent sell off.
Three months copper on the London Metal Exchange rose 0.7% on Friday to end at $7,233 a tonne. That capped a week where prices also jumped 7%.
Reuters said that was its strongest week since November, 2016.
Zinc stocks saw an outflow of 2,700 tonnes to 151,650 tonnes, bringing inventories to their lowest since 2008.
LME zinc ended 0.1% higher to $US3,575 a tonne, and clocked its best week since August 2017.
Aluminium rose 2% on Friday to $US2,208, lead eased 0.2% to $US2,613, tin rose 0.8% at $US21,750 and nickel shed 1.6% to $US13,920.
The break in some markets to celebrate the Chinese Lunar New Year holiday drove many commodity prices in Asia last week.
That’s why iron ore prices enjoyed four days of solid gains.
The Metal Bulletin’s 62% Iron Ore Index increased to $US78.43 per tonne on Thursday, (the Metal Bulletin did not publish its coking coal and iron ore indices on Friday because of the Lunar New Year holiday in Singapore).
That was up from $US76.46 a tonne the week before - the close on Thursday was still down from $US79.08 reached on January 11.
The Metal Bulletin’s said its fob (free on board) Australia indices for coking coal were flat at $US229.57 a tonne for premium hard coking coal and up by $US5.50 a tonne to $US193.01 for hard coking coal.
Oil futures rose Friday, completing a nice weekly rise and clawing back some of the ground lost in the recent sell off which has well and truly vanished.
Gone were the fears rising US production (well over 10.2 million barrels a day) would hurt prices.
West Texas Intermediate crude for March delivery in New York rose 34 cents, or 0.6%, to close at $US61.68 a barrel.
It was the third straight winning session for WTI and left it up 4.2% higher for the week, but still down 4.7% so far in February.
In London April Brent crude futures rose 51 cents, or 0.8%, to settle at $US64.84 a barrel.
Brent rose 3.3% for the week but is still down down 6.1% since the end of January.
Crude futures held on to gains after oil-field-services firm Baker Hughes said the number of US oil rigs rose by 7 this week to 798 for the fourth consecutive weekly increase. The number of rigs are up more than 40 so far this year.
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.