While gold went off the boil on Friday after a five-session surge, oil also retreated on the day as well, but the most intriguing movement was the sharp fall in copper futures on Comex after Donald Trump ramped up his election campaign against China and Chinese companies.
The 1.7 million new jobs in July were in reality old jobs being filled and while it caused some hearts to flutter and helped the Dow and S&P 500 to a very late gain, it was in fact more confirmation that the US economy is in rough shape. The jobless rate fell to 10.2% from 11.1% in June.
Tensions between the US and China rose after President Donald Trump signed an executive order banning US-based operators from working with China-based technology giants Tencent Holdings (WeChat) and TikTok parent ByteDance.
While China is a big buyer of precious and industrial metals tensions with the US can hit commodity sentiment.
But China buys most of its commodities outside of the US – oil, copper, gold, silver, iron ore, etc, to the impact of the trade brawl is indirect – they might hit the Chinese economy.
July saw China import a record amount of copper in July – 762,211 tonnes in July, up 16.1% from the previous record of 656,483 tonnes set in June and a massive 81.5% higher than the 420,000 tonnes imported in July 2019.
Prices rose in July by 5.1%, but fell 4.1% on Friday, ending the week at $US2.7925 a pound and a weekly fall of 2.6%.
Friday also saw the US dollar rise and iron ore prices slid $US2.06 to $US119.21 a tonne for 62% Fe fines.
That still left the price up 7.7% from the previous week’s close of $US110.58. That was due to the near 5% jump on Monday.
Meanwhile, Comex Gold futures finished sharply lower Friday, snapping a five-session streak of record settlements, as investors faced a firming US dollar and a monthly employment report on the U.S. labor market that fell mostly in line with expectations.
Comex December gold lost $US41.40, or 2%, to settle at $US2,028, an ounce after the metal rose 1% on Thursday. The price later bounced back to $US2,046 in after-hours trading.
For the week, gold still managed a 2.1% weekly gain, based on Friday’s settlement for the most-active contract.
Gold has now risen for nine consecutive weeks, marking its longest such streak since the period ended May 12, 2006, according to FactSet.
Gold is up by over 15% since June 30.
Comex September silver lost 86 cents, or 3%, to end at $US27.540 an ounce, following a 5.6% surge on Thursday. Silver surged nearly 13.7% for the week as investors chased a cheaper precious metal than gold.
Oil futures dipped on Friday but rose over the week.
West Texas Intermediate (WTI) crude for September delivery dropped 73 cents, or 1.7%, to close at $US41.22 a barrel in New York, while October Brent crude fell 69 cents, or 1.5%, to finish at $US44.40 a barrel in Europe.
WTI saw a 2.4% weekly rise, while Brent gained 2%.