Commodity markets enjoyed mixed fortunes this week as traders balanced gloomy eurozone economic news, alongside contrasting jobs data and “fiscal cliff” fears in the US.
Many markets fell heavily along with the euro on Thursday after the European Central Bank forecast that the recession-mired eurozone economy would continue to contract next year and only return to growth in 2014.
Sentiment was also rocked by news that the 17-nation eurozone tipped into recession in the third quarter, or three months to September, with the European bloc’s economy shrinking 0.1 percent from the second quarter, when it contracted 0.2 percent.
OIL: Brent prices dived to one-month lows this week on the back of eurozone gloom and the strong greenback, which makes US dollar-priced commodities more expensive for buyers using weaker currencies and tends to hit demand.
Prices took another blow from news of shrinking US manufacturing activity and downbeat jobs data from payrolls firm ADP.
However, crude futures won a very brief boost on Friday after better-than-expected non-farm payrolls data in the US, which is a top consumer of many raw materials.
Meanwhile, the lack of a breakthrough over the fiscal cliff in Washington has kept a cloud hanging over markets.
Next week, attention will switch to Vienna, where the 12-nation OPEC will decide the cartel’s oil production ceiling.
By Friday on the New York Mercantile Exchange, West Texas Intermediate (WTI), or light sweet crude, for delivery in January sank to US$86.27 a barrel from US$87.85 a week earlier.
On London’s Intercontinental Exchange, Brent North Sea crude for January fell to US$106.93 a barrel from US$110.53.
PRECIOUS METALS: Gold prices hit a one-month low at US$1,684.77, but clawed back some losses on speculation over possible European Central Bank action to boost growth, traders said.
“Gold has bounced from its lows as the market prices in the likelihood of short-term liquidity measures in Europe following weak GDP data, and [pushed] the precious metal higher,” CMC Markets analyst Michael Hewson said.
By late on Friday on the London Bullion Market, gold fell to US$1,701.50 an ounce from US$1,726 a week earlier.
Silver slid to US$32.85 an ounce from US$34.28.
On the London Platinum and Palladium Market, platinum gained to US$1,600 an ounce from US$1,612.
Palladium climbed to US$698 an ounce from US$685.
COCOA: Prices retreated on profit-taking as traders eyed the prospect of rising supplies in West Africa.
By Friday on LIFFE, London’s futures exchange, cocoa for delivery in March dropped to ￡1,551 a tonne from ￡1,567 a week earlier.
On New York’s NYBOT-ICE exchange, cocoa for March dipped to US$2,424 a tonne from US$2,457 a week earlier.
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US President Joe Biden’s administration is racing to complete CHIPS and Science Act agreements with companies such as Intel Corp and Samsung Electronics Co, aiming to shore up one of its signature initiatives before US president-elect Donald Trump enters the White House. The US Department of Commerce has allocated more than 90 percent of the US$39 billion in grants under the act, a landmark law enacted in 2022 designed to rebuild the domestic chip industry. However, the agency has only announced one binding agreement so far. The next two months would prove critical for more than 20 companies still in the process
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