Commodity prices eased last week, despite more concerns about Iran and Israel.
The Standard & Poor’s GSCI Spot Index of 24 commodity futures dropped 1.2% on Friday as the US dollar rise.
Sharp falls in gold, silver, energy products and cotton pushed the index down and it ended the week off 1.6%, the biggest drop in seven weeks.
Gold fell more than 3% over the week, oil was off nearly 3% and silver’s fall was more than 2%.
The GSCI is still up 9.2% this year, just in from the 8.9% advance for the S&P 500 Index.
The strong denial of Thursday’s report that a Saudi oil pipeline had been damaged saw oil prices slump in Europe and the US.
As well, the strengthening in the greenback added to the downward pressure.
Nymex West Texas Intermediate crude futures for April delivery fell $US2.14, or 2%, to settle at $US106.70 a barrel in New York.
Over the week oil fell nearly 3%, ending three weeks of gains, including the 6% jump the previous week.
The WTI contract in New York rose above $US110 a barrel in New York (and over $US128 for Brent crude in London) on Thursday on a report from an Iranian government broadcaster (later denied) of a pipeline explosion in Saudi Arabia.
Brent crude fell under $US124 a barrel in London.
Investors also focused on President Barack Obama who was due to speak on US-Israeli relations and Iran’s nuclear program at the weekend.
The President is also due to meet with Israel’s Prime Minister Benjamin Netanyahu on Monday at the White House.
“Oil is the new Greece,” analysts at HSBC wrote in a note on Friday and investors “have quickly found a new source of anxiety thanks to the recent surge in oil prices".
"If the trend persists, a fragile economic recovery in the developed world could quickly be derailed and inflation could return to emerging markets,” they wrote.
Crude prices have risen about 9.8% so far in 2012.
The stronger greenback had an impact on gold and silver prices on Friday as was to be expected.
The US dollar gained against the euro and most major rivals after January data on retail sales in Germany came in weaker than expected.
The euro fell to $US1.3197 from $US1.3305 on Thursday and was down 1.8% against the greenback for the week.
The Aussie dollar ended at just over $US1.0730 for little movement over the week.
The US dollar bought 81.81 Japanese yen, up from 81.12 late Thursday.
The dollar rose 1% against the yen over the week or, looked at another way; the yen continued its growing decline against the US currency, a move that is helping Japanese exporters.
Comex gold futures for April delivery ended $US12.40, or 0.7%, lower at $US1,709.80 an ounce on the Comex division of the New York Mercantile Exchange.
Silver ended 3.2% lower on Friday, the biggest decline among metals futures.
Gold had added 0.6% and silver 3% on Thursday.
For the week gold was down 3.7%, off nearly $US70 per ounce.
Gold declined 4.3% on Wednesday after US Fed chairman Ben Bernanke quashed hopes for more US economic stimulus.
Comex Silver for May delivery dropped $US1.14, or 3.2%, to settle at $US34.56 an ounce. Over the week silver lost 2.2%.
Comex May copper dropped 3c or 0.7%, to $US3.90 a pound on Friday.
Over the week copper rose 1%.
Copper is up 13% so far this year.
