The euro’s advance and greater optimism about the US economy continues to impact commodities, sending gold and oil lower on Friday.
The US dollar fell, a situation that would normally see commodity prices firmer.
But the loss for the greenback managed to cushion some of the selling pressure for key commodities like gold and oil.
Copper however was firmer on Friday than Thursday when it was sold off.
The growing confidence about the eurozone and the health of the US economy, and an easing of fears about the Chinese economy, saw the euro make more gains and gold and oil in particular suffered as a result.
The euro hit a two-month high above $US1.36 on Friday and traders say there are suggestions of more gain to come.
The euro rose 1.1% to $US1.3621 in New York and reached $US1.3625, the highest level since November 23.
Bloomberg said the currency gained 1.7% last week against the greenback. It added 0.6% to 112.48 yen while the greenback fell half a per cent against the yen to 82.57 yen.
The Australian dollar closed about steady on a week ago in New York at just under 99 USc.
So gold prices fell for a second day on Friday as the stronger appetite for riskier assets the improving economic outlook more than offsetting the weaker dollar.
And crude-oil futures settled at a two-week low Friday, falling for the second consecutive day.
Traders said the weaker dollar helped oil resist bigger losses.
Gold prices have lost around $US75 an ounce so far this month (and this year) but analysts in the US and Asia are unfazed by the drop, with many betting the slump in prices will soon be cut short as the Chinese New Year feeds an increase in global demand that’s destined to last.
The Chinese New Year, also known as Lunar New Year, begins on February 3 and ends with the Lantern Festival 15 days later.
It was gold’s third weekly loss in a row, the longest losing streak since last July.
Comex gold for February delivery fell $US5.50, or 0.4%, to $US1,341 an ounce, the lowest close since November 17.
The fall was steeper earlier following the 2% drop on Thursday in the wake of the Chinese inflation and growth data’s release.
Gold lost 1.4% last week, marked by big dips the previous Friday and on Thursday.
The $US75 an ounce tumble means gold has underperformed relative to other commodities this year.
So far in 2011, the metal has lost 5.7%, which follows a 30% rise in 2010, gold’s 10th year of gains.
Silver inched up 0.2% to $US27.53 an ounce.
Silver prices had earlier hit a seven-week low at $US27.10 an ounce, pressured by a further outflow from the world’s largest silver-backed exchange-traded fund, the iShares Silver Trust.
Holdings of the trust fell by just over 10 tonnes on Thursday, after recording their biggest one-day drop since late November in the previous session. It has seen outflows of more than 346 tonnes so far this year.
Nymex March crude for March delivery fell 48c, or 0.5%, to $US89.11 on Friday night.
The March contract fell 3.7% last week. The February contract expired on Thursday after dropping 2.2%.
Brent crude oil for March settlement climbed $US1.02, or 1.1%, to end the session at $US97.60 a barrel in London.
Brent traded at a $US8.49 premium to the Nymex contract, the highest since February 2009.
Copper for March rose 4cs, or 0.9%, to $US4.31 a pound.
Copper lost 2.3% on the week.
Copper futures fell 2.2% on Thursday, the biggest fall since mid November,.
Copper hit a record $US4.498 a pound on January 3.
On the London Metal Exchange, three month copper added $US86 to $9,441 a tonne ($US4.28 a pound).
And the metal reached a record $US9,781 a tonne on January 19.
Also on the LME, tin climbed 2.9% to $US27,745 a tonne on Friday after reaching an all-time high of $US27,750, on speculation that a supply shortfall may worsen.
Aluminium, nickel and zinc rose, while lead and zinc eased.
