Gold, copper and other metals ended lower Friday, building on a loss for the week, as the solid US jobs data provided a boost to the dollar and supported expectations for further interest-rate hikes at the end of this month at the US Federal Reserve’s next meeting.
The U.S. created 201,000 new jobs last month, keeping the unemployment rate at an 18-year low of 3.9%, according to the US the Labor Department.
The yearly rate of pay increases also climbed to 2.9% from 2.7%, marking the highest level since June 2009.
The report supports the Federal Reserve’s intention to hike rates at its Federal Open Market Committee meeting starting September 26.
Comex December gold futures fell $US3.90, or 0.3%, to settle at $US1,200.40 an ounce, for a weekly decline of about 0.5%. Futures prices have now posted weekly declines in eight out of nine weeks according to FactSet.
Comex December silver fell nearly 0.1% to $US14.17 an ounce, for a weekly loss of 2.7%, and Comex December copper shed 0.5% to $US2.623 a pound, ending around 1.8% lower for the week.
In London benchmark (three month) copper on the London Metal Exchange closed up 0.1% at $US5,933 a tonne but down 0.7% for the week and near its August low of $US5,773.
The culprit for the weakness is the US-China trade war which has helped push copper prices down some 20% since early June7’s peak of $US&,348 a tonne.
China accounts for nearly half of global copper demand estimated at around 24 million tonnes this year, so a trade war with the sort of tariffs America is talking about will have a huge impact – and Australia won’t escape.
LME s three-month aluminum ended up 1.4% on Friday at $US2,069 a tonne – but lost 2.6% for the week.
Nickel finished down 0.7% at $US12,355 a tonne and zinc fell 0.9% to $US2,420. Lead though climbed 2.1% to $US2,078 and tin closed up 1.1% at $US19,055.
Global oil benchmarks suffered their first-week losses last week as commodity prices generally eased under pressure from the continuing trade tensions generated by President Donald Trump’s blatherings.
US and Brent crude oil futures saw a modest decline on Friday and over the week. A stronger US dollar didn’t help either.
Monthly oil market reports expected this week will provide more data on supply and demand.
Monthly reports are expected from the US Energy Information Agency, the Organisation of the Petroleum Exporting Countries Wednesday and International Energy Agency on Thursday.
Concerns over the potential for weaker energy demand on the back of global trade tensions pressured prices, but expectations for tighter supplies as US oil sanctions on Iran go into effect later this year again provided some support.
However, signs of a cooling in the oil rush in the Permian Basin in West Texas has some traders wondering if a future oil crunch could emerge in the US.
In the US October West Texas Intermediate crude futures, fell 2 cents to settle at $US67.75 a barrel —the lowest finish for the contract since Aug. 21, according to FactSet. That was a weekly loss of 2.9% after two consecutive weeks of gains.
In Europe, the November Brent contract added 33 cents, or 0.4%, to settle $US76.83 a barrel on Frtiday for a weekly drop of 1%.
US oil prices on Friday showed little reaction to weekly data from Baker Hughes that showed the number of rigs drilling for oil in the US fell by 2 to 860 this week.
The total active US rig count was unchanged at 1,048, adding to the belief that the active phase of US oil shale oil drilling has peaked for the time being.
