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LONDON, Jan 19: The price of oil bounced its way through a volatile week dominated by fresh builds in US crude stock levels that underscored the weakness of demand.
Australian wool prices rallied, allowing the Eastern index to soar to the highest level in its six-year history thanks to strong demand.
But recent strength in the gold market faded as weak demand at a Bank of England auction sapped at sentiment.
GOLD: Gold prices gave back some of their recent heady gains, undermined by weak demand at a Bank of England auction.
By Friday afternoon, an ounce of gold was fixed at $283.20 from $285.75 a week earlier.
The Bank of England on Wednesday sold 20 tons of gold at $283.5 an ounce in an auction 1.4 times subscribed, under a broader programme to switch more than half its gold reserves into currency instruments.
Physical demand is also at a seasonal low at this time of year, with traders having covered Lunar New Year demand in the Far East a few weeks ago and with western pre-Christmas demand having passed, noted Lawrence Eagles, a commodities expert at the GNI brokerage.
An announcement on Friday that South African mining giant AngloGold had abandoned its takeover bid for Normandy Mining had little effect on prices because the market had been expecting rival bidder Newmont to win.
A Newmont win has been seen as positive for gold prices because Normandy hedges its production — meaning it sells gold in advance to protect against price movements — while Newmont does not.
Higher investment and and a cut in producer hedged should outweigh a fall in physical demand and allow average gold prices to remain relatively firm at 282 dollars an ounce in the first half of 2002, the London-based Gold Fields Mineral Service predicted.
SILVER: Silver prices fell as a recent market squeeze abated and lending rates fell.
An ounce of silver fell to 4.4125 dollars on Friday afternoon from 4.76 the previous week.
BASE METALS: Most base metals prices ended flat or weaker after a flurry of US economic data failed to clear uncertainties over prospects for economic recovery and thus metals demand.
Effectively, most metals are trading within a range and nobody is quite sure in which direction they will move, noted Lawrence Eagles at the GNI brokerage.
Three-month aluminium prices stood at $1,386 an ounce from $1,396 the previous week.
Three-month copper prices firmed one dollar to $1,536.
Elsewhere in the complex, nickel fell $300 to $5,670 a ton, tin prices slipped $70 to $3,880 a ton, zinc lost $14 to $819 a ton and lead shed $17 to $523.
OIL: Oil prices endured another choppy week and analysts warn the volatile climate is likely to continue over the coming weeks.
By Friday afternoon a barrel of Brent North Sea crude for March delivery fell to $18.73 a barrel, from $20.05 a week earlier.
In New York, February-dated light sweet crude futures were quoted at $18.37 a barrel from 20.32 the previous week.
The focus remained on the weekly snapshot of US crude stock levels, which showed significant builds.
It’s telling us that demand is very weak, said Clay Smith, an oil expert at Commerzbank.
Over the next couple of weeks (we expect) a volatile trading range between $18 and $19, but with the fear on the downside, he told AFP.
A possible reason for this was that Opec had tightened up compliance to try to get non-members to join it in cutting supply, and then when that did not work it had ramped up production to try to scare non-members into acting, Smith said.—AFP
