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LONDON, July 6: Gold prices fell sharply this week on the back of a partial rebound in the value of the US dollar, while oil prices had a quiet run with trading volumes light because of the US Independence Day holiday.
Signs that the dollar was stabilising after its recent slide also weighed on the base metals complex, though zinc prices firmed on news of the closure of a production site in France.
Among soft commodities, cocoa prices scaled new highs as a supply squeeze ahead of the harvest of the world’s largest producer, the Ivory Coast, showed little sign of abating.
GOLD: Gold prices were pushed lower by a rebound in the value of the dollar against other leading currencies.
By Friday afternoon, gold was fixed at 311.3 dollars an ounce against 318.5 dollars the previous week.
Howard Patten, a metals analyst at Barclays Capital, noted that the weakening of the dollar had been a major driver in the recent gold price rally.
Speculative funds which operate in the gold market in New York were still holding a very large net position, he said.
As the dollar clawed back, investors had liquidated their positions, he said.
The sentiment is deteriorating on the back of the fact that gold prices were unable to develop above $325.
SILVER: Silver prices rose on investment fund buying.
On the London Bullion Market, silver was fixed at $4.91 an ounce on Friday afternoon, against 4.82 the previous week.
PALLADIUM and PLATINIUM: punished. Platinum prices fell again as the recent downtrend in the dollar against the yen prompted Japanese investment funds to sell the metal, which is denominated in the US currency.
On the London Platinum and Palladium Market (LPPM), an ounce of platinum fell to $520 an ounce on Friday from 545 a week earlier.
Patten said there was some physical interest emerging which suggests that prices will find some reliable support.
BASE METALS: Base metals prices fell on concerns about the outlook for the global economy and a partial rebound in the dollar.
Charles Kernot, a metals expert at BNP Paribas, said that aluminium and copper prices in particular had been undermined by the weak economic climate.
OIL: Oil prices end the week little changed amid of a dearth of fresh leads and quiet trading because of the closure of the US market on Thursday and Friday for the Independence Day holiday.
Many London traders also enjoyed a day off on Thursday for the International Petroleum Exchange’s annual golf day.
Brent crude for August delivery stood at $25.53 from $25.55 a week earlier.
In New York, August-dated light sweet crude futures traded for $26.80 from $26.75 a barrel.
Prices showed little reaction to weekly figures from the US energy department which showed that crude oil stocks had risen by 1.6 million barrels, or 0.5 per cent, to 321.2 million in the week to June 28.
Gasoline inventories were unchanged at 216.4 million while distillate fuel stocks dropped by 300,000 barrels to 128.3 million.
SUGAR: Sugar prices rose as the market recovered from recent losses on worries that supplies may not be as plentiful as previously anticipated.
But trading conditions were extremely thin owing to the long weekend in the United States.
Refco analyst Anne Prendergast said the market had been buoyed by demand from a number of leading investment funds.
Sugar prices have been under pressure recently on fears that a number of the world’s biggest producers, most notably Brazil, could be heading for bumper crops.
SOYA: US soya prices forged higher, aided by favourable weather conditions in US producer regions, which are experiencing a hot and dry period that is unfavourable for growing the crop.
On the Chicago Board of Trade (CBoT), a bushel of soya for July delivery rose to $5.56 on Thursday from 5.22 a week earlier.
Soyabean meal — used in animal feed — for July delivery gained to $183.4 from 176.2 the previous week.
GRAINS: Wheat prices rose this week as unfavourable weather conditions in the United States encouraged speculative purchases by investment funds.
The weather is most important for the condition of seedlings and the market is being underpinned by the hot and dry weather, said AG Edwards analyst Victor Lespinasse.
COTTON: Cotton prices forged higher for the eighth week in a row, underpinned by news that US plantings were likely to be smaller than had been expected.
The rally followed an announcement from the US agriculture department which indicated that US farmers had planted fewer crops than had been predicted this spring.
In New York, the July contract climbed to 46.05 cents a ursday from 42.85 cents the previous week.
The Cotton Outlook Index of physical cotton, the average of the world’s lowest prices, rose to 46.40 cents a pound from 43.35 cents the week before.
WOOL: Wool prices fell back this week as new-season sales got underway.
According to the Australian Wool Industries Secretariat (AWIS), demand was once again bolstered by Chinese industry, which has profited from the weakness of the Australian dollar relative to the US dollar over the past month.
It estimated that 89,947 bales of wool were put up for sale last week, against just 50,586 the previous week.—AFP
