Gold fell Friday for the first day in four, retreating from the $US 1,000 an ounce mark, oil was mixed and other commodity ‘stars’, lead and sugar also weakened, while wheat prices again traded near year lows.
Despite Friday’s easing, gold futures still had their best week in more than four months, largely due to gains on Wednesday and Thursday when the metal suddenly broke from a narrow trading range and soared.
Comex December gold fell $US1 to end at $US996.70 an ounce, up 4% over the week.
In London the price ended at $US989, up 3.5%. In both cases, it was the biggest weekly gain since April.
Traders say that gold prices typically rise in September, an analysis of the historical record shows, as the start of holiday seasons in the world’s biggest gold-consuming countries tends to drive up demand.
Oil prices were mixed on Friday after the US reported its jobless rate jumped to 9.7% and a fall in the number of people newly out of work last month.
Nymex crude for October delivery ended at $US68.02 a barrel, up six cents from the day before.
October Brent crude was down 30 cents to $US66.82 dollars a barrel.
OPEC is expected to maintain current production quotas at this week’s ministerial meeting in Vienna.
Oil prices fell from over $US70 on Monday and ended the week off 6.5%, but still up 53% over the past year.
Rising stocks of unsold copper, especially in Asia, saw the metal finish easier in the US and London.
New York Comex copper prices suffered their first weekly decline since mid-July, despite a fall in the number of Americans out of work last month.
December copper finished at $US2.8665 a pound down 2.8% for the week (it’s up more than 100% for the year so far).
Copper traders are more worried about the rising level of stocks, especially in Asia,
London Metal Exchange stocks rose last week to 308,200 tonnes, the highest level in 100 weeks.
Including stocks in warehouses administrated by the New York and Shanghai exchanges, inventories are up 15% so far this year at 443,807 tonnes, according to a report from Bloomberg.
On the LME, three month copper rose $US20, or 0.3%, to $US6,275 a metric tonne, or $US2.85 a pound.
And world lead prices were easier late in the week, but still finished up more than 10%.
LME three months lead finished around $US2,224 a tonne.
That’s the highest it’s been at the close for 16 months or more.
Lead has risen on concern that production may not keep pace with rising Chinese demand.
China has vowed to shut substandard smelters after thousands of children were poisoned at least two smelters.
At least 200,000 tonnes of lead capacity is at risk of closure in China, which produced about 1.947 million tonnes of the metal in the first seven months of this year.
Global lead production was about 4.241 million tonnes in the first half of this year, in line with metal usage of 4.204 million tonnes.
From those figures, China accounts for around 48% of global output and demand.
With sharply rising car sales this year, Chinese lead demand could be up more than 40%.
The price rise should be helping many Australian producers.
The lead poisoning investigations are in Kunming, capital city of Yunnan province, and in Shaanxi and Hunan provinces.
In Chicago, wheat fell to a nine-month low on suggestions the US spring crop will be bigger than forecast, after timely rain and sunshine boosted plant development.
The US Department of Agriculture said the crop is in good condition, although the harvest is behind schedule.
But yields and quality are reported to be high.
December wheat futures on the Chicago Board of Trade fell 7 USc to $US4.7175 a bushel after touching $US4.71, the lowest since last December.
Wheat fell 4.7% last week and is down 23% this year.
World sugar prices closed down sharply in New York at 21.60 USc a pound, off more than 6% on the day.
The fall was even more dramatic from the 28 year high of $24.85 USc, hit earlier in the week.
That was a fall of 9% and came as profit taking emerged off the back of suggestions of better than expected production levels in Brazil and hopes of more rain in India.
Bloomberg reported that a sugar shortage has forced Tesco’s Malaysian stores to impose a 2 kilogram-per-customer ration.
Sugar supplies are scarce in Malaysia because of a global shortage and a government price cap that encourages people to smuggle sugar across the border into Thailand, where it fetches double the price.
The International Sugar Association has reported that world sugar demand will top output by an estimated five million tonnes this year.
Bloomberg reported that complicating matters at the moment is the fact that the subsidy money seems to be running out as it is being used up more quickly than expected, leading producers to slow output, the impact of smuggling is draining supplies as well and demand has jumped because of the Ramadan, which boosts demand for food.
And falling cocoa production levels has seen supplies spike from Indonesia in response as producers sell stocks into the rising market, and major suppliers are starting to impose price surcharges.
Cocoa grindings are down 6% this year as demand softens because of the recession. But prices are rising and Cadbury has already warned of possible price rises because its costs have risen 30% so far this year.
Cocoa is trading around 1,870 pounds a tonne ($3,065) compared with 1,306 a tonne pounds a year ago.
