Gold, copper, oil, and iron ore ended the week with reasonable gains.
The Aussie dollar reclaimed 70 cents to end around 70.20 US cents on Saturday morning but interest rates in the US and elsewhere jumped sharply as it became apparent the Fed will probably cut rates this month.
That saw the yield on Aussie 10 year government bonds rose sharply on Friday – jumping 10 points to 1.43% – still very low but up from the 1.27% all-time low of several weeks ago.
The US dollar eased and that helped commodities.
Comex gold futures ended higher on Friday in New York, capping a week when Federal Reserve Chairman Jerome Powell said did nothing to dispel expectations for an interest rate cut later this month.
Gold for August delivery rose $US5.50, or 0.4%, to settle at $US1,412.20 an ounce for a weekly rise of 0.9%, according to FactSet.
Comex September silver added 9 cents, or 0.6%, at $US15.236 an ounce, but ended down 1.6% over the week.
In other metals trade, October platinum added $US3.70, or 0.5%, to $US834.60 an ounce, with prices up about 2.9% for the week, while September palladium was off $US16.70, or 1.1%, to $US1,542.40 an ounce, for a weekly loss of 1.4%.
Comex September copper rose nearly a cent, or 0.2%, to $US2.694 a pound, a weekly rise of 1.2%.
In London, three-month LME copper fell 0.3% to finish at $US5,935 tonne, giving up gains after touching $US5,998, the highest since July 1.
Chinese trade data for June showed imports of unwrought copper fell 27.2% year on year in June. Shipments of ores and concentrates slid 16.5%. Analysts said lower copper output in Chile and Peru helped explain the falls.
LME nickel prices touched their highest in four months on Friday on worries that Indonesia will reinstate an export ban on ore in 2022.
Indonesia relaxed the ban in 2017 but said at the time that it would last only five years and that exports would be restricted again in 2022.
Oil futures rose last week thanks to continuing tensions in the Middle East and fears about the impact of a tropical storm in the Gulf of Mexico.
But prices posted only a small gain for the session on Friday as traders kept a wary eye on the second forecast this week about weakening demand over the rest of this year and into 2020.
August West Texas Intermediate (WTI) crude added a cent to settle at $US60.21 a barrel in New York – notching up a solid 4.7% gain for the week.
In Europe trading the global marker, September Brent rose 20 cents, or 0.3%, at $US66.72 a barrel.
Low strength hurricane Barry crossed the coast on Saturday in Louisiana and is now a tropical storm
Brent gained 3.9% for the week and like (WTI) saw its highest levels since May.
Baker Hughes on Friday reported that the US rigs looking for oil fell by 4 to 784 this week, a second straight weekly decline.
Meanwhile, the International Energy Agency sees global demand for OPEC oil looks likely to fall to its lowest in over 16 years as US output continues to rise.
The IEA said demand from the Organization of the Petroleum Exporting Countries in the first quarter of 2020 will fall to 28 million barrels a day.
This means that despite efforts by the group and its allies to cut inventory by capping output global oil supply climbed 300,000 barrels in June. The OPEC+ group (mainly Russia) recently extended their 1.2 million barrels a day output cap to March 2020.
The IEA said that OPEC-driven agreement will not be enough to change expectations for an oversupplied market. In the first half of 2019, oil supply exceeded demand by roughly 900,000 barrels a day.
“This surplus adds to the huge stock builds seen in the second half of 2018 when oil production surged just as demand growth started to falter,” the IEA said Friday.
“The widely-anticipated decision by OPEC+ ministers to extend their output agreement to March 2020 provides guidance but it does not change the fundamental outlook of an oversupplied market,” the IEA said.
