The good jobs figures for the US in January, and then those late doubts about Greece, ended up confusing traders and gold slumped the most in five weeks on Friday.
The US dollar fell after the jobs figures were released in the early morning, but it then gained against the euro as European finance ministers cancelled a meeting for Monday which was supposed to consider the second bailout agreement.
Talk of a unified political opposition in Greece to new deeper cuts demanded by the bailout group worried markets, but nowhere near the extent of three months ago and couldn’t dent the enthusiasm that’s rising for equities.
The euro fell as low as $US1.3064, before recovering to $US1.3147 from $US1.3138 late Thursday (remember it was around $US1.26 three weeks ago, so it had made strong gains).
And yet those gains against the dollar haven’t hit the Aussie dollar.
It hit new highs against the euro late Friday in offshore trading.
It also gained against the greenback, ending at $US1.0771 in New York on Saturday morning, our time, after being a touch higher during trading.
That was up 1.2 USc on its New York close the week before.
US bonds jumped sharply in yield (fell in price) after the jobs report and they ended weaker. The 10 year bond finished around 1.94%, up 0.12% in a day in New York.
All this action should have meant a good day for gold traders, but the US jobs report spooked them and the metal shed more than $US32 an ounce, or 1.8% at one stage.
The metal rose in late trading as the greenback weakened and closed down 1.1% to $US1,740.30 on the Comex in New York, the biggest loss in six weeks.
Gold reached $US1,765.90 during trading, the highest since early December.
Gold rose 0.3% last week, the fifth straight weekly advance.
Comex silver prices fell 1.2% to $US33.749 an ounce.
That left the metal off 0.1% for the week, its first losing week in the last five.
Comex March copper’s March jumped 12 USc on the jobs news to end at $US3.90 per pound.
The 3.2% rise got rid of the losses from earlier in the week and the metal ended up 0.1% overall.
Traders say copper remains in demand and the bullishness is linked to falling stocks and expectations that China and the US, the world’s two biggest users of the metal, are recovering.
But much of the interest in copper seems to come from investors and not users, so if China’s rumoured purchases fade away as prices continue rising (which has happened in each of the past five years), copper prices could be left overbought and be sold off on the first bit of bad news.
Still in gold: data released in Beijing and published on official websites said China’s gold output rose 5.89% to 360.96 tonnes in 2011 from 2010.
That was reported as a record high and ranking the highest in the world for the fifth consecutive year.
China "made breakthroughs in exploring new gold mines" and carried out exploration activities overseas in 2011, the association said in a statement, without further elaboration.
The country’s top 10% producers accounted for 50.1% of the total national output last year, while the five province-level regions of Shandong, Henan, Jiangxi, Fujian and Inner Mongolia produced 60% of the national total.
China is the world’s biggest gold producer and consumer. Its gold output topped South Africa in 2007 to take the top spot globally.
