Commodity markets swooned, then ballooned, and then slowed in what was an excitable first three months of 2016 which saw solid rebound for oil and iron ore in particular.
But they are facing a nervy start to the new month and quarter today with a slew of important data due out from two key Chinese manufacturing reports to the US jobs data tonight for last month.
Iron ore proved to be the unheralded star, surging sharply before fading in the closing days of March. Gold bounced very nicely as did oil. Copper likewise, but the last week saw a big retracement.
The rebound came off the back of the steadying in the sell off in oil and then its recovery. Investor fears, especially about the health of banks eased as well, generating more confidence in late February and through March.
The biggest help though has come from the softening in policy at the US Fed which is now seen as only raising US rates once this year – compared to expectations at the start of the year for up to four increases.
The dollar index, a gauge of the greenback against a basket of six peers, lost 6% over the quarter.
Commodities, with gold and oil leading the way, are denominated in US dollars, and the weakness in the currency has helped spark higher demand foreign buyers.
But with those two start of month surveys of Chinese manufacturing out today (one government, one private) plus key reports on the health of business in Japan (The Tankan) and other economies (especially the eurozone and the US), and the American employment and jobless reports tonight, it is going to be a nervous and potentially volatile start to the new month and quarter.
Gold and oil will feel the brunt of any changes in sentiment and the gains of the first quarter will be quickly forgotten, or added to.
Iron ore fell back under $US53 a tonne, down more than 16% in the last week of March from the peak of just over $US63 a tonne, but still up more than 20% for the quarter.
Gold had its best quarter in 30 years, jumping 16.4% in the three months ended March 31.
Oil rebounded strongly from the multi-year lows seen in late January and early February.
Comex June gold futures rose $US7, or 0.6%, to settle at $US1,235.60, in New York. That left them barely higher in March and the rise of 0.1% was the smallest of the year so far, according to FactSet data.
But gold’s 16.4% leap in the first three months of 2016 was the strongest quarterly showing since the third quarter of 1986, according to FactSet.
Comex May silver gained 25.3 cents, or 1.7%, to $US15.464 an ounce, with prices up about 12% for the quarter.
Comex May copper fell less than a cent to $US2.183 a pound, but still saw a quarterly gain of over 2%, even though that was much higher two weeks ago.
Among the rural commodities, sugar stood out with a rise of around 3% to 15.35 cents a pound this morning in New York. But cotton lost around 9%.
Oil futures ended March with a gain of more than 13%, with prices finding support from fallingUS. production, prospects for a freeze in output by major producers and the weaker greenback.
May WTI crude settled at $US38.34 a barrel in New York, up 2 cents for the session. Prices gained about 13.5% for the month and ended up 3.5% for the quarter, according to FactSet.
After falling to a 12-year low of $US27.10 a barrel in January, Brent, the international benchmark, recovered the $40 level in March, and was set to close the quarter just under $40, up 4% on the quarter. West Texas Intermediate, the US marker, also looked to finish the quarter up 4%, around $38 a barrel.
Despite oil’s rebound from the year’s lows, the average price for the quarter for WTI was $US33.61, the lowest since the fourth quarter of 2003 and Brent, at $US35.17 a barrel, was the lowest since the first quarter of 2004.
Warm weather and rising inventories hit natural gas, which was one of the top losers, falling almost 20% to $US2 per million British thermal units.
