Last week’s mini sell-off of commodities took a breather on Friday night in the wake of a better than expected US jobs for April – while gold, copper oil and nickel all fell for the week, they were steadier on the day.
April’s strong US jobs report (211,000 new jobs) was seen as keeping the US Federal Reserve on a path of higher interest rates, with another hike increasingly likely as soon as next month’s meeting. The US jobless rate fell to 4.4%, the lowest for a decade.
But iron ore prices again slumped on Friday as China’s steel and futures markets continued to fall amid a crackdown on so-called shadow banking, worries about the level of activity in the Chinese economy, a stronger US dollar and rising stocks of unsold ore at steel mills.
The Metal Bulletin’s 62% Fe Iron Ore Index fell more than 5% for a second day in a row, ending at $US61.73 aUS tonne down by $3.47 a tonne of more than 5.3%. That’s more than 10% in two days after Thursday’s 5.1% drop.
Iron ore futures fell around $12% last week in Singapore, the most since November.
The weak iron-ore prices also weighed on the Australian dollar down about 1% against the dollar this week, but it closed above 74 US cents at the close early Saturday morning.
Oil futures ended higher Friday, bouncing from a nearly 5% drop on Thursday, but prices still registered a hefty loss for the week.
US West Texas and Brent, the two global benchmarks settled at their lowest levels on Thursday since late November, when the Organisation of the Petroleum Exporting Countries agreed to cut output for six months.
June West Texas Intermediate crude futures rose 70 cents, or 1.5%, to settle at $US46.22 a barrel in New York. After dropping 4.8% on Thursday, prices finished roughly 6.3% lower for the week, according to FactSet data.
In London, July Brent crude added 72 cents, or 1.5%, to $US49.10 a barrel, leaving them down by about 5.6% for the week.
Data from Baker Hughes on Friday showed yet another rise in the number of active rigs drilling for oil in the US rose by 6 to 703 rigs last week.
That was the 16th weekly climb in a row – suggesting higher US production in coming months. US crude production is up 438,000 barrels a day in the past year to 9.293 million barrels a day.
Helping push prices lower on Thursday was easing tensions in Libya lessened the risk of disruptions to oil production in the country and a Reuters report that OPEC members aren’t interested in deepening the current cuts.
And, an S&P Global Platts survey released Friday, showed that crude output from the 10 OPEC members who agreed to cut production was unchanged in April at 31.85 million barrels a day, compared with a month earlier. Under the November agreement, OPEC had agreed to cap output at 32.5 million barrels a day.
While Comex gold prices ended lower Friday, they at least held the level at the lowest settlement since mid-March and suffering from their largest weekly loss of the year so far.
Comex US June gold lost $1.70, or 0.1%, to settle at $US1,226.90 an ounce. Prices finished about 3.3% lower for the week, the largest weekly percentage loss since the week ended November. 11, according to FactSet data.
Comex silver futures for July contract fell 2.9 cents, or 0.2%, to $US16.274 an ounce, its lowest settlement so far in 2017. That left it 5.7% lower for the week, for its worst weekly decline since the week ended October 7 last year.
Comex July copper settled at $US2.529 a pound, up 0.7% on the day, but was off 3% for the week.
July platinum rose 0.3% to $US910.20 an ounce, though was still down 4.1% from a week ago, while June palladium rose 1.6% to $813.05 an ounce -down 1.7% on the week.
