Gold Perks Up, Oil Prices Rebound
Metal prices ended the week in surprisingly good condition (but not iron ore and steel - see separate story), while oil was also solid despite more evidence of rising US oil production.
Gold prices ended higher on Friday, wiping out their loss for the week, as monthly data revealed a strong rise in US jobs and weak growth in wages.
But the jobs report and its 313,000 new gigs leaves us with the certainty that the US Federal Reserve will be lifting interest rates for the first time (of three) for 2018 at its two meeting next week.
The US eased a touch, despite the certainty attached to the market’s belief in another rate rise, while US bond yields firmed to just under 2.90% and the level in early February which triggered the sell off in the wake of the January jobs report.
The 12-month increase in pay slipped to 2.6% from a revised 2.8% in January (2/9% originally reported which triggered the bond yield run up and the sell off in shares especially).
Comex April gold rose $US2.30, or 0.2%, to settle in New York at $US1,324 an ounce—up roughly 60 cents, or 0.05%, for the week, leaving its year-to-date gain around 0.8%.
Comex May silver tacked added 0.7% to $US16.608 an ounce and a 0.9% weekly gain.
And Comex May copper futures settled at $US3.1361 a pound, up 1.9% for the session, and thanks to that rise, a gain of around 0.4% for the week.
In London LME three month copper closed up 1.9% at $US6,962 a tonne, aluminium ended up 0.7% at $US2,120 a tonne, zinc added 1.5% to $US3,277, nickel ended up 4.5% at $US13,860, lead rose 1.7% to end at $US2,376 a tonne while tin ended down 0.8% at $US21,375 a tonne.
All metals ended on the up after touching multi-month lows during trading in reaction to the news about the Trump steel and aluminium tariffs.
Oil prices rose on Friday and last week as the possibility of a meeting between President Donald Trump and North Korea’s leader encouraged investors worried about the fall out from trump’s tariff war.
News of the first weekly decline in the US oil-rig count in seven weeks also helped to oil’s price rise.
April West Texas Intermediate crude rose $US1.92, or 3.2%, to settle at $US62.04 a barrel in New York, turning what would’ve been a weekly loss into a gain of around 1.3%.
In Europe, May Brent crude futures, the global oil benchmark, rose $US1.88, or 3%, to end at $US65.49 a barrel ,up 1.7% for the week.
Both WTI and Brent on Thursday had marked their lowest settlements since mid-February.
Crude futures had a rough week, with prices pulled down in earlier sessions after Energy Information Administration data showed US crude stocks rose 2.4 million barrels and production hit a record high of well over 10.3 million barrels in the week ended March 2.
But on Friday, services group, Baker Hughes said in its weekly report that the number of active U.S. rigs drilling for oil fell by four to 796 last week. It was the first such decline in seven weeks.
The EIA will issue a monthly update on shale-oil production levels on Monday.
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.