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Gold Softer, Oil Recovers Ground

Gold futures eked out a small gain Friday but still lost ground over the week, while oil futures finished with a solid weekly rise as prices remained well over $US50 a barrel.

It was the second consecutive weekly loss for gold after the US Federal Reserve on Wednesday indicated it expects to deliver another rise in interest rates by the end of the year, and up to three next year.

December gold rose $US2.70, or 0.2% on Comex, to close at $US1,297.50 an ounce, a day after ending the session at the lowest close since August 24 and under the significant level of $US1,300 for the first time in September.

For the week, gold declined just over 2%, according to FactSet data.

Comex December silver futures fell by around 4 cents, or 0.2%, to close at $US16.98, a weekly drop of 4%, its biggest such fall since July.

Comex December copper rose slightly to around $US2.94 a pound, down about 0.5% for the week.

On The London Metal Exchange, nickel futures hit a five-week low on Friday after trading fees were raised in China to dampen speculation and iron ore and steel prices slid with other metals such as copper.

Worries about Chinese debt after a ratings downgrade and the prospects of higher US rates also hit sentiment, especially in China.

Financial markets were rattled when North Korea said on Friday it might test a hydrogen bomb over the Pacific Ocean after President Donald Trump threatened to destroy the reclusive country.

The London Metal Exchange index of six metals had surged 21% during the three months before its peak on September 4 and has lost 3.5% over the rest of the month.

In London LME lead and nickel both fell 4%, while LME zinc and aluminium both fell by more than 2% and LME copper fell to its lowest level since August 6 at $US6,366 before nudging higher with $US6,409.

Oil futures hung onto gains for the week after a day of mixed trading on Friday as major OPEC producers boasted that they were respecting the production cap agreement.

US November West Texas Intermediate crude futures rose a cent to trade at $US50.56 a barrel In New York on Friday.

For the week, prices had a third-straight weekly rise, with the November contract up about 0.3%, but prices tracking the front-month contracts were up more than 1%.

In London November Brent crude futures added 38 cents, or 0.7%, to $US56.81 a barrel.

The gain for the week was more than 2%.

US production rose to more than 9.5 million barrels a day last week and stocks were up more than 4 million barrels to 473 million barrels.

The total US oil and gas rig use report from Baker Hughes showed a fall of just one over the week to 935. The number of oil rigs fell 5 (for the third weekly fall in a row) to 744. The number of gas rigs was up four.

View More Articles By Glenn Dyer

Glenn Dyer has been a finance journalist and TV producer for more than 40 years. He has worked at Maxwell Newton Publications, Queensland Newspapers, AAP, The Australian Financial Review, The Nine Network and Crikey.

At the AFR he was a finance writer, Finance Editor, News Editor and Chief of Staff. At the Nine Network he was supervising producer of Business Sunday for more than 16 years. He has also written for other online and analogue print publications here and overseas.



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