Commodities lifted last week, from oil to copper and iron ore, as well as gold.
That’s despite a rapid escalation in the number of coronavirus victims (dead and infected) inside China and in other countries late in the week.
With most American markets shut for the Presidents Day holiday Monday, the activity will be fitful after last week’s solid gains.
Iron ore prices rose more than 6% to a five-month high of $US88.56 a tonne for 62Fe ore delivered to northern China. That compares to the $US83.59 close the week before.
Comex copper – another important indicator of Chinese demand copper – lost 0.5% at $US2.5995 a pound on Friday on news of the higher death and infected toll from the virus in China, but still managed a rise of 1.8% for the week.
Comex gold settled higher Friday for a small weekly gain as investors attempted to gauge the economic impact of the spread of COVID-19 in China.
In fact, gold rose Friday as US stockmarkets traded weaker for most of the session, although the S&P 500 and the Nasdaq ended the week at record closing highs
Gold for April delivery rose $US7.60, or 0.5%, to settle at $US1,586.40 an ounce, with prices for the most-active contract up 0.8% for the week.
That was the highest settlement since January 31, according to FactSet data.
Comex March silver added 11.5 cents, or nearly 0.7%, to finish at $US17.734 an ounce, for a gain of around 0.2% for the week.
Meanwhile, oil futures had a better week with West Texas Intermediate crude for March delivery ending 81 cents, or 1.6%, at $US52.23 a barrel in New York, while April Brent crude was $US1.13, or 2%, higher at $US57.47 a barrel in Europe.
WTI, the US indicator crude, saw a 3.8% weekly rise, while Brent, the global benchmark, ended 5.03% higher for the week. It was the first weekly gain for both grades since the week ended January 3, according to FactSet data.
Analysts said oil found support from rumours the OPEC and its allies, particularly Russia, could agree to a plan to further curb production in response to demand fears sparked by the spread of COVID-19 in China.
“The OPEC+ technical committee’s recommendation to cut supply by a further 600,000 barrels a day would help if Russia signs on, and Nigeria joins Libya in experiencing conflict disruption to production,” said Jason Gammel, an analyst at Jefferies, in a note quoted by Marketwatch.com.
“Still, Chinese demand expectations remain the dominant factor for crude prices and the severity and duration of the coronavirus effects remain a guessing game,” he added.
Russia remains the wild card when it comes to agreeing to further production curbs by the OPEC+ group, analysts said.
Russian officials reportedly insist that President Vladimir Putin hasn’t made up his mind on the recommendation by an OPEC+ joint technical committee for OPEC and its allies to reduce output by 600,000 barrels a day, noted Helima Croft, head of global commodity strategy at RBC Capital Markets, in a note.
At the same time, Russian energy companies continue to balk at deeper cuts while signaling a willingness to extend the current agreement on output curbs, which are set to end in March, through the second quarter, she pointed out in a report on Marketwatch.com.
