While gold was easing sharply, so also was oil and it fell under $US90 a barrel for the first time in a month on concerns that US economic growth will slow.
Not helping was a steadying in the greenback and the comment by Saudi Oil Minister Ali al- Naimi who said on Friday that supplies in the market are "absolutely ample.''
Al-Naimi, speaking in Doha, said oil prices don't reflect actual production and consumption trends.
His comments added to the impact of the slowing economy thesis that is now broadly accepted, even if some punters in metals are trying to get in early (see copper report below).
The expectation in the US is for economic activity to slow sharply this quarter and for much, if not all of the first three months of 2008 as the housing slump works its way through the broader economy.
Even plans for a sort of bail out/rescue/postponement of the dreadful day for subprime mortgage holders when their interest rates spike upwards, is having an impact on sentiment.
That US Government plan will be out this week and it will supersede the idea for a big bail out fund for so-called structure investment vehicles held off balance sheet by the likes of Citigroup.
The interest rate cut comments from the two most senior Fed officials last week: Chairman Bernanke and Vice-Chairman Kohn, also set the tone for a rate cut at next week's meeting of the Fed's Open Market Committee.
The realisation is that the rate cut will be to stop the US economy suffering a hard landing rather than stimulating or signalling a turnaround point. It will also assist Wall Street's stressed balance sheets.
So the punters and non-industry traders in oil (and gold) have been lightening their positions at prices above $US90 a barrel, some have nice profits to take home.
January Nymex oil fell $US2.31, or 2.6% on Friday to $US88.71 a barrel The price hit $US88.52 a barrel, the lowest since October 25.
Oil fell 9.7% last week, its biggest weekly loss since April 2005. Prices hit a record $US99.29 a barrel on November 21.
A little noticed set of stats on Friday from the US Department of Energy was a bit of an eye opener when discovered by the market.
They showed that average US consumption of oil products, such as petrol and diesel, in the four weeks to November 23, was half a per cent down on the same period of 2006.
Traders said that was a clear sign that higher petrol prices (over $US3 a gallon) and slowing demand from business (building and construction) was having a clear impact on consumption.
People are driving less at the moment than year ago in the US. Warmer weather is also having a small impact in the Midwest.
Oil tumbled $7 a barrel from Thursday when it spiked to $US95 a barrel after a Canadian supply pipeline to the US was damaged. It fell sharply from the peak when it became clear there was no lasting damage.
In London Brent January crude fell $US1.99, or 2.2% on Friday to $US88.23 a barrel. That was the lowest since October 31.
Also helping depress prices was the suggestion that Opec is pumping more crude than previously thought.
Shipments over the four weeks to December 15 are projected to rise 2% to 24.53 million barrels a day, according to reports in the US and London. According to the Saudi Oil Minister, his country, the biggest Opec producer, is adding half a million barrels of spare capacity in December to produce 9 million barrels a day.
That seems to be a quid pro quo for the Middle East peace conference last week in the US.
In contrast to oil and gold, copper had a big week.
The previous week's blues were forgotten as the price jumped and the metal had its best week since the heady days of September, in the aftermath of the Fed's post-August crunch rate cut.
Once again it was the punters reckoning they'd get set early ahead of Fed rate cut next week.
March Comex copper futures rose 9.05 US cents, or almost 3% to $US3.1845 a pound, for a rise of 5.1% over the week.
Copper is down around 16% from its high in May of $US3.807 a pound. It hit the all time high of $US40.4 a pound in May 2006.
Traders said punters and others were buying copper in the expectation that the rate cut and other moves would bring a turnaround in the slumping US housing sector.
But that has as much credibility as the last time we heard that story; which was six weeks ago, in a run up to the last Fed meeting at the end of October.
US housing isn't going anywhere but down for the next few months at least: there's more than 8 months backlog of unsold houses on the market and prices are falling, and are expected to continue falling next year.
Possible buyers retreat from the market when prices are falling. Discounting and bundled pricing (with any extras thrown in for nothing) are disguising the true extent of the slide in new house prices in the US. So the outlook isn't as certain as some of the market stories were saying on Friday about a possible upturn.
US home lending next year could be $US800 billion to over $US1.3 trillion down on levels seen in 2006 and 2007.
That doesn't signify a rebound in housing. New homes account for only 15% of housing sales and the either 85% is taken by sales of existing houses, which are just as depressed as new homes. The subprime mortgage/foreclosure problem is hurting existing home sales far more than new homes.
More interestingly is the continuing China rebound story after a slowdown in copper buying over the last couple of months.
Copper stocks monitored by the Shanghai Futures Exchange fell 23% last week to 34,438 tonnes, the biggest fall for 19 months, but stocks monitored by the London Metal Exchange rose again on Friday to be 13% higher in the past month at 189,200 tons.
LME three month copper rose $US120 on Friday to $US7,000 a tonne
