Oil prices dominated commodity markets last week while copper, gold and iron ore all saw something of a small sell-off.
In fact a key global commodity index – the the S&P GSCI Index is up around 2% for the month so far after a 3.5% jump in September.
S&P said that out of 24 commodities in the Index, 17 are positive month to date. That’s the highest such count since September of last year, when 20 out of 24 were positive, S&P said.
The firm said nickel, copper, lean hogs (pigs) and gasoline (petrol) futures prices lead the pack. S&P said that up to the middle of last week nickel prices were up 13%, copper 8% (but it fell on Friday) and aluminium had added around 4%. Lean hog prices were up more than 7% and US petrol prices had added 6%. Coffee and wheat prices were down around 3%
This coming week however commodities will have to battle the twin impacts on the value of the US dollar from the Fed’s decision mid week and then the October jobs report on Friday.
Changes to the US currency remain the major day to day influences for commodity prices and Friday of last week was no different with the currency seeing the biggest week rise so far this year up 1.3% including a rise of 0.4% on Friday and helped by a weakening euro as the Catalan crisis in Spain deepened.
The Aussie dollar responded, dropping well under 77 US cents and down more than 2.5% over the week. It is now 5% down from its most recent peak of 80.60 US cents on August 9.
Iron ore prices dipped last week, but that won’t have an impact on the ASX today with investors to follow the strong gains from Wall Street on Friday night and Saturday morning.
A slump in China’s futures and steel markets sent the price of a benchmark seaborne cargo of iron ore below $US60 per tonne on Friday.
The Metal Bulletin said its index price for 62% Fe ore ended at $US60.08 a tonne, down from $US61.47 a tonne on Thursday and also down 2.2% from $US62.46 the previous Friday.
But oil futures were buoyant, with Brent passing the $US60-a-barrel level on Friday in European trading, ending 4.6% higher over the week, while in New York West Texas Intermediate, jumped 4.8% for the week, performance in six weeks.
December Brent, the global benchmark rose $US1.14, or 1.9%, to finish at $US60.44 a barrel in London. That was the highest settlement for a front-month contract since July 2015.
In New York, December West Texas Intermediate crude futures jumped $US1.26, or 2.4%, to settle at $US53.90 a barrel, marking a nearly eight-month high. The sharp gains in price and the weaker Aussie dollar means Australian petrol prices face steep rises in the weeks to come.
Baker Hughes said on Friday there was a rise of one unit in the number of oil rigs actively looking for oil in the US. The rise to 737 was the first in four weeks.
Gold finished higher on Friday night, finding some support from uncertainty surrounding the next US Federal Reserve chief, but prices still lost ground over the week as the greenback enjoyed its strongest week for 2017 so far thanks to solid third quarter growth and other data.
Comex December gold futures jumped $2.20, or 0.2%, to settle at $US1,271.80 an ounce, reversing course after earlier losses in the wake of the first estimate of third quarter gDP showing a rise of 3%.
Comex December silver settled at $US16.752 an ounce, down 0.4% for the session and 1.9% for the week.
Comex December copper futures followed London lower and fell 2.3% to $US3.104 a pound, to be down about 2% on the week. LME copper prices slid on Friday, with the base metals complex closing out an otherwise steady week with losses as the greenback strengthened.
Copper prices fell for a third day on Friday on the London Metal Exchange and most other industrial metals also fell after the US dollar hit a three-month high.
Benchmark three month copper closed down 2.2% at $US6,830 a tonne after touching $US6,782.50, the lowest since October 11. Reuters said that left the price down 1.8% for the week and the first weekly loss in five.
LME nickel did not trade but was bid down 1.4% at $US11,580 a tonne, a weekly loss of 1.7%. Zinc lost 1.6% lower at $US3,172.50 a tonne but was up around 2% for the week.
Aluminium finished down 1% at $US2,168 a tonne, lead ended 2.3% lower at $US2,424 and tin closed 0.1% higher at $US19,875 a tonne.
