Quietly, commodity markets staged something of a major rally last week without too many people noticing.
Oil bounced, gold rose, then retreated, but metal prices saw perhaps the best week for two years. Iron ore reversed an early dip last week to jump by 7% on Thursday and Friday.
Given the way the price of iron ore and its futures markets in China dominate day trading on the ASX, it was odd that the big jump on Thursday and Friday didn’t have a more positive impact.
In fact another week like last week and we could see iron ore prices top the $US80 a tonne mark for the first time in four months.
Iron ore prices surged to almost $78 per tonne cfr northern China on Friday August 18 amid a sharp increase in Chinese futures prices ahead of the weekend.
The Metal Bulletin’s 62% Fe Iron Ore Index reached $US77.94 a tonne up $US2.53 a tonne The Metal Bulletin commented that the “Key drivers China’s ferrous futures prices trended up at a mild pace earlier in the day before experiencing a spike after 2.30pm (on Friday), which resulted in benchmark steel contracts gaining over 2% and that of iron ore ending the day at 6.6% higher.”
Last week’s late surge was after the price fell 4.7% the week before to close on $US75.19.
The rise last week overall was 3.6% thanks to the 6.9% jump over Thursday and Friday.
Gold prices meanwhile budged their highest intraday level of the year on Friday, temporarily topping $US1,300 an ounce before pulling back to settle lower for the session and the week.
Gold had traded above $US1,300 Friday for the first time in 2017, getting a lift from haven demand on the back of earlier weakness in global equities, the terrorist attacks in Spain, and concerns about President Donald Trump’s pro-business agenda as his rightwing strategist, Steve Bannon was fired.
Comex December gold futures fell 80 cents, or less than 0.1%, to settle at $US1,291.60 an ounce in New York.
It had touched a high of $US1,306.90 an ounce Friday, a level not seen since early November, according to the FactSet data group.
Despite that the price fell 0.2% over the week.
Comex September silver futures lost 5.3 cents, or 0.3%, to end at $US17 an ounce, down 0.4% over the week. And Comex September copper futures ended little changed on the day at $US2.940 a pound, but was up 0.9% for the week.
In London LME copper ended the week around 1% higher at $US6,485 a tonne after hitting $US6,580 on Thursday, the highest level since November 2014.
Zinc again starred with a solid week. The price had its strong rise since last November. The price rose 2% on Friday to $US3,124 a tonne after hitting a ten-year high of $US3,150. That saw it up nearly 8% for the week.
LME aluminium closed down 0.7% at $US2,062 a tonne – still close to the Thursday’s peak of $US2,112, the highest since September 2014 and around 0.8% higher over the week.
And nickel ended more than 2% higher at $US10,980 after reaching $US11,055, the highest level since March 7 while lead ended down 2.2% at $US2,361.50 a tonne and tin rose 0.2% to $US20,240 a tonne.
