Gold rose, world oil prices fell on Friday as the coordinated intervention against the yen steadied nervous forex and sharemarkets.
But over the weekend, Libya broke the ceasefire it called on Friday, and planes from France and the US attacked parts of the country, as did warships and submarines.
The US announced that over 100 Tomahawk missiles were fired at targets in Libya on Saturday.
This means gold and oil prices will jump when trading resumes in Asia this morning.
The Nymex April West Texas Intermediate crude contract settled at $US101.07 a barrel, down 35c.
In London, Brent North Sea crude for delivery in May lost 97c to close at $US113.93 a barrel.
On the week, prices eased just 0.1% as they shook off the unease about Japan and Libya and decided that both situations were on the improve.
Certainly that is no longer the case about the Middle East where there was also shooting and deaths in Yemen and Bahrain.
In Japan the situation seemed to stabilise, but reports of radiation being found in milk, vegetables and drinking water from inside and outside the exclusion zone around the stricken Fukushima reactor complex will worry some food industry groups, as well as Japanese consumers.
Reuters said that in a note, Commerzbank noted: ‘‘Four per cent of Japan’s power plant capacities are offline on a sustainable basis after nuclear power plants have been shut down, meaning that Japan’s energy requirements have to be covered to a greater extent by fossil fuels such as oil, coal and gas".
But there will also be a strong reaction from food traders, especially dairy groups in Australia and New Zealand which already export dairy products to Japan.
Comex gold for April delivery gained $11.90, or 0.9%, to $1,416.10 an ounce.
On the week, however, gold lost 0.4%, because of the 2.3% drop in Tuesday’s markets’ sell-off.
Comex copper fell after a couple solid rises, down just a cent Friday to $US4.34 a pound.
But the metal still finished the week up 3.1% as investors hoped rebuilding in Japan would strain worldwide copper supplies.
News that the Japanese government was talking about a $US127 billion rebuilding fund for business and was also looking at raising other funds, will give copper bulls some heart.
Friday’s weakness for oil will be brushed aside because of the fighting over the weekend.
Brent oil had plunged $US3 a barrel immediately after the ceasefire announcement from the Gadaffi government.
That didn’t last long as by Saturday, our time, the government forces were attacking the rebel stronghold of Benghazi.
As well as Libya, unrest and killings in Yemen and Bahrain also helped unsettle the oil market.
Standard & Poor’s said on Friday it had cut Bahrain’s long- and short-term local and foreign currency sovereign credit ratings because of mounting political unrest in the monarchy.
Gold will jump today on the expansion of the fighting in Libya.
Gold finished the week on the up on Friday, ending higher for a third straight day.
The gold market wasn’t taken in by the Libyan ceasefire story, but a bigger driver was the weakness of the greenback on Friday.
That was the intervention by the G7 countries to drive down the value of the yen.
Comex spot gold rose 1.1% to $US1,418.10 an ounce and the April contract settled up $US11.90 at $US1,416.10.
Reuters pointed out that total COMEX trade was about 15% lower than its 30-day average on Friday, at a time of instability when it should have been higher.
"Lower-than-usual turnover during gold’s gains prompted some traders to doubt the metal had momentum to rise further," Reuters commented.
Goldman Sachs said Friday in a research note that the pullback in gold prices following the devastation in Japan offers investors a chance to buy the yellow metal at lower prices.
They said gold prices should continue to rise and maintained their three-month target of $US1,480 an ounce.
Traders ignored the latest tightening in Chinese monetary policy (see separate story).
Gold ended the week down 0.4% flat after dropping 1% last week in the wake of the quake and the tsunami in Japan.
Comex spot silver rose 2.5% to $US35.02 an ounce, and here again volume was much lower than the 30 day average.
May silver futures rose 80c, or 2.3%, to $US35.058 an ounce.
That left silver down 2.4% last week.
Grains staged something of a turnaround from the weakness of the previous week or so.
Wheat was especially strong, and corn saw big gains as well.
Chicago Board of Trade corn for May delivery rose 37c, or 5.7%, on Friday to close at $US6.835 a bushel.
Corn rose on a combination of stories of possible flooding in the northern corn belt, and dry weather in the south.
That gave corn an 11% rise on Thursday and Friday, reversing the recent weakness and left the grain up nearly 3% for the week.
Bloomberg reported US exporters said corn sales more than doubled in the week ended March 10 from a week earlier.
It was the sixth time in seven weeks that sales topped 1 million metric tonnes.
And Chicago wheat futures rose on speculation that the dry weather would cut America’s winter wheat crop.
Chicago May wheat futures rose 12.75c, or 1.8%, to settle at $US7.23 a bushel. Wheat jumped more than 9% in two days, leaving the grain up 0.6%.
