Gold’s rise last week wasn’t a big surprise – not when the world’s major stockmarkets lost ground heavily, with some going into correction phases.
But oil had another very weak week – US crude futures dipped under $US40 a barrel for the first time in more than six years overnight Friday, while Brent crude also fell, more than reversing the small rise from the week before.
West Texas Intermediate fell to $US39.94 a barrel during trading in New York, after the latest Baker Hughes data on drilling rig use showed another rise of 2 (to 674) in the number of active US oil rigs last week.
The weaker than expected ‘flash’ report on Chinese manufacturing activity fell to a six year low of 47.1, which in turn helped trigger the big sell-off across all financial markets.
Other commodities also eased, with copper among those going lower because China is the metal’s biggest consumer.
In fact it was the 8th week in a row that US oil futures have fallen – the longest losing streak since March 1986 (when oil prices fell as low as $US10 a barrel, according to FactSet figures).
US oil futures settled below $US41 a barrel for the overnight Friday first time since the Great Recession.
West Texas Intermediate (WTI) crude for October delivery fell 87 cents, or 2.1%, to settle at $US40.45 in New York, for a weekly loss of 6.2%. WTI prices have slumped over 14% so far in August as US production remains stubbornly high as does stocks of unsold oil and oil products.
In London, October Brent crude lost $US1.16, or 2.5%, to $US45.46 a barrel – 8% lower over the week and more than offsetting that rise of the week before which now seems to have been a one-off.
Meanwhile Comex gold futures settled at a six-week plus high in New York on Friday night for their biggest weekly gain since January.
Safe haven buying, the fall in the value of the US dollar on Thursday and Friday especially (and the rise in the value of the euro), plus the weak news from China on the health of its manufacturing sector, all played a part in giving gold a rate boost in 2015.
Surprisingly the Aussie dollar remained above 73 US cents in trading on Friday night, despite an early dip under that level as reaction to the weak Chinese data drove sentiment.
Gold futures for December delivery rose $US6.40, or 0.6%, to settle at $US1,159.60 an ounce on Comex. That was up 4.2% for the week, the largest weekly gain since mid January. So far in August gold futures are down 5.7%.
Comex September silver futures however fell on Friday night, down 21.6 cents, or 1.4%, to $US15.301 an ounce after jumping 2.2% on Thursday. Still, silver ended the week up a slim 0.6%.
And Comex September copper ended at $US2.304 a pound, down 1.6 cents, or 0.7%, for a weekly loss of 2%.
