Gold prices zoomed this week to a four-month peak as investors sought shelter from weak eurozone data and fears of contagion from a bank's problems in Portugal, dealers said. The oil market however sank for the third successive week, pressured by easing supply tensions in Libya and Iraq, they added.
PRECIOUS METALS: Gold rallied on sliding European equities, weak eurozone industrial output data and news of a brewing bank crisis in Portugal. The safe-haven investment hit $1,345.46 per ounce on Thursday - touching a level last seen on March 19. That pushed sister metal silver to a similar high point at $21.57 an ounce.
Europe's stock markets suffered heavy falls on Thursday as troubles at Portugal's largest listed lender, Banco Espirito Santo (BES), sparked fears of a possible return to the dark days of the eurozone debt crisis. "With poor eurozone data and rumblings out of the Portuguese banking system, traders are shunning appetite for risk, instead booking profits or fleeing to traditional safe-havens such as German and UK government bonds or gold," said ETX Capital analyst Daniel Sugarman.
Palladium scored a fresh 13-year high at $877 an ounce on solid demand and despite the end of a strike in South Africa. Separately, the London Bullion Market Association (LBMA) announced Friday that exchange giant CME Group and news and financial information giant Thomson Reuters will provide a new electronic system for the setting of benchmark silver prices.
The LBMA said after a market consultation that the current system - which sees a panel of banks agree a silver price "fixing" like with gold. The daily silver fixing will be abolished in August amid calls for greater transparency. The World Gold Council meanwhile declared Monday that there is "strong support" for the industrial body's plan to reform a century-old method of the gold price "fixing", after holding talks in London.
A total of 34 delegates representing all sectors of the industry attended, including central banks, bullion banks and trading exchanges. London's Gold Fix, the global benchmark, has been tainted by a rigging scandal and attacked by critics as old-fashioned. By Friday on the London Bullion Market, the price of gold rose to $1,335 an ounce from $1,319.25 a week earlier. Silver increased to $21.41 an ounce from $21.12.
On the London Platinum and Palladium Market, platinum climbed to $1,506 an ounce from $1,503. Palladium advanced to $867 an ounce from $866.
OIL: Global oil prices fell heavily as fears receded about major supply disruptions in the crude-rich Middle East, analysts said. Sanjeev Gupta, head of the Asia-Pacific oil and gas practice at consultancy firm EY, said prices were hit by the imminent return of disrupted Libyan exports into a global market already awash with supplies. Brent crude has shed more than $4.0 since July 3 after Libya's interim Prime Minister Abdullah Al-Thani declared that authorities had regained control of two export terminals blockaded by rebels.
The ports at Ras Lanuf and Al-Sidra could add about 500,000 barrels of crude per day to global energy markets, analysts say. Output in Sharara, the site of Libya's largest oil field, is reaching its maximum production capacity of 340,000 barrels just days after it was reopened following a deal between rebels and the government, the Wall Street Journal reported. Unaffected production in violence-hit Iraq has also had a bearish impact on oil prices. "Indications that Iraqi oil exports from the southern part of the country remained insulated from the sectarian violence that has swept the north in recent weeks also weighed down prices," Gupta added. Iraq is the second biggest producer in the 12-nation Opec oil cartel, pumping 3.4 million barrels a day and possessing more than 11 percent of the world's proven reserves. By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in August dived to $106.99 per barrel from $110.87 one week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for August slid to $101.35 a barrel from $103.90.
BASE METALS: Base or industrial metal prices diverged as downbeat Chinese trade data sparked profit taking, but zinc hammered a near three-year peak at $2,318.50 on stretched supplies. "Chinese trade data was a little disappointing which sparked gentle profit taking following the recent gains," said analysts at the Sucden brokerage, adding China's copper imports were down 7.9 percent in June month-on-month.
China's monthly trade surplus jumped 16.4 percent in June to $31.6 billion, official data also showed Thursday. That fell short of the median forecast of $36.9 billion in a survey of 21 economists by The Wall Street Journal. Exports increased 7.2 percent to $186.8 billion year-on-year, but this dashed hopes of a 10.0-percent rise. By Friday on the London Metal Exchange, copper for delivery in three months fell to $7,125 a tonne from $7,129 a week earlier.
--- Three-month aluminium rose to $1,934 tonne from $1,921.
--- Three-month lead climbed to $2,194.50 a tonne from $2,180.
--- Three-month tin retreated to $21,963 a tonne from $22,790.
--- Three-month nickel weakened to $19,163 a tonne from $19,500.
--- Three-month zinc increased to $2,287 a tonne from $2,236.
SUGAR: The market registered fresh declines on the back of ample supplies worldwide. "Price weakness has reflected ample global supplies, but with a broadly balanced market forecast in 2014/15, they are likely to reach a floor soon," said Ecobank analysts.
By Friday on Liffe, London's futures exchange, the price of a tonne of white sugar for delivery in October stood at $457.10 compared with $469.40 a week earlier. On ICE Futures US, the price of unrefined sugar for October dropped to 17.16 US cents a pound from 17.81 US cents a week earlier.
COCOA: Prices drifted lower in the absence of market-moving news. By Friday on Liffe, cocoa for delivery in September eased to £1,912 a tonne from £1,919 a week earlier. On the ICE Futures US exchange, Robusta for September fell to $2,015 a tonne from $2,059 a week earlier.
RUBBER: Prices in Kuala Lumpur extended losses as the ringgit strengthened against the US dollar. The Malaysian Rubber Board's benchmark SMR20 dropped to 167.85 US cents a kilo from 174.35 cents a week earlier.
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