Global commodity indexes hit five year lows on Friday night as the impact of the slide in global oil prices sent ripples through global markets.
Oil led the way lower as US markets caught up with those big falls in Europe and Asia on Thursday night and Friday – key oil prices ended the week down 14%.
Gold also took a pounding Friday night ahead of yesterday’s vote in Switzerland on gold ownership, dropping more than 2%.
That vote decisively rejected the idea of forcing the Swiss national Bank to buy billions of dollars of gold over the next few years. A reported 74% of the vote went against the idea.
But it was the sell off in oil which really damaged gold and other metals.
Copper was also weak and silver took a hammering from nervy speculators as well.
The falls and weakness elsewhere saw commodities fall to a five-year low on Friday.
The Bloomberg Commodity Index of 22 raw materials dropped 3.9% to 112.9451, the lowest since April 2009.
US oil futures ended at their lowest in five years on Saturday morning, our time, in the wake of the Opec decision not to cut production (which was hardly news).
Oil prices slumped in European and then Asian trading in the wake of the decision as the US was closed for Thanksgiving. When trading resumed in the US on Friday, prices rapidly fell, and then went further.
On the New York Mercantile Exchange, US West Texas (WTI) style crude for delivery in January fell $US7.54, or 10%, to settle at $US66.15 a barrel. It dipped lower in light, after hours trading, to end on $UD66.03 a barrel.
That was the lowest settlement for a front-month oil contract since September 25, 2009, and meant US crude futures prices fell 18% in November, the largest one-month percentage decline since the height of the GFC in December 2008.
On the week, futures fell just on 14% in a stunning slide.
In was no better in London where January Brent crude exchange fell $US2.43, or 3.4%, to finish at $US70.15 a barrel. That was Brent’s lowest settlement since May 25, 2010.
Brent fell more than 6% on Thursday, when the Nymex floor trading was closed for Thanksgiving.
Brent also lost 18% on the month and November’s fall means Brent and WTI have been down for five straight months.
The loss in gold on Friday was more down to the sell off in oil and the rise in the value of the US dollar, than fears ahead of the Swiss vote.
Comex December gold futures in New York fell $US21.40, or 1.8%, to $US1,175.20 an ounce, while silver slumped a nasty 6.4%, or $US1.06c, to $US15.49 an ounce.
Gold closed lower in after hours trading at $US1,165.80.
That’s just $US34 an ounce away from this year’s low of $US1,132 an ounce.
But gold should get some benefit from India’s move to free up the import in coming weeks.
Copper for delivery in three months fell 3.2% to $US6,351 a tonne on the LME.
In New York, Comex March copper futures slid 3.7% to settle at $US2.846 a pound.
Bloomberg said that earlier the price touched $US2.8435, a pound the lowest for a most-active contract since June 10, 2010.
This week, the metal dropped 6% in value last week, the biggest weekly fall since December 2011.
