The stronger US dollar hit commodity prices last week, helping drive oil prices lower (see separate story) as well as the prices of gold and other metals plus agricultural commodities.
Gold futures settled at the lowest level of the year on Friday, just a day after finishing at a monthly high, as the US dollar index briefly touched an 11-month high.
Comex August gold slumped $US29.80, or 2.3%, to settle at $US1,278.50 an ounce. That was the lowest settlement since December and lost roughly 1.9% for the week.
Iron ore prices ended at $US65.39 a tonne, slightly lower than a week earlier’s pricve of $US66.16 a tonne.
A key index showed the US dollar touching the highest level since last July against a basket of currencies of its major trading partners.
The index, heavily weighted toward euros, was up 1.3% last week.
The US dollar was helped higher by the Fed’s latest interest rate during the week and the decision on Friday by the Bank of Japan to leave its key interest rate on hold.
The trade war with China also saw a flight to quality by investors looking for a haven.
That helped lift the greenback and currencies such as the Aussie dollar fell, closing at around 74.40 US cents, down one and a half cents in the week. That’s the lowest in 13 months for the Aussie currency.
US bond yields dipped to around 2.92% for the 10 year security, trimming the margin over the top of the Federal Funds rate (2%) to less than 1%.
In other metals trading, Comex July silver futures plunged 4.5% to $US16.48 an ounce, for a loss of around 1.6% for the week.
Comex copper futures were hit hard and the 6.5% jump the week before was largely eaten up by a fall of 4.7% over the week.
The Comex July copper contract shed 2.4% to $US3.145 a pound. July platinum fell 2.5% to $US887.80 an ounce, ending 2% lower on the week, while September palladium settled down 2.5% at $US981.80 an ounce, for a weekly decline of 2.4%.
In London copper prices on the LME slid for a second day on Friday, with the market suffering its biggest weekly all since late April on concerns over demand in major consumer China.
Three-month copper on the London Metal Exchange fell 2.2%, closing at $US7,020 a tonne, having hit a near two week low of $US6,996. The industrial metal has slipped from a 4-1/2 year high hit last week on supply concerns.
LME aluminium ended down 2.3% at $US2,204, having hit its lowest since late April, zinc closed off 3.4% at $US3,080, lead ended down 2% at $US2,405, tin closed 0.4% lower at $US20,800 while nickel ended 0.7% lower at $US15,185.
Agricultural commodities took a hit on Friday from the emerging trade war between the US and China.
China plans to levy a duty on imports of soyabeans from the US, its biggest supplier. Chicago Board of Trade soybean futures for November delivery were down 2.1% on Friday afternoon, handing the contract for the legume its biggest weekly drop on record, of 6%.
Cotton futures for December delivery were down 3.4%, while wheat for September delivery dropped 0.7% and corn for December delivery fell 0.5%.
