Oil and gold prices retreated this week, with demand for the commodities pressured by strains in the global economy. Prices slid on a slew of downbeat economic data from around the world, analysts said. Futures tumbled by more than two dollars on Thursday, with Brent crude hitting the lowest closing level for 13 months.
OIL: "The steeper-than-expected decline in oil prices is partly in reaction to soft economic data out of major global economies this week," Desmond Chua, market analyst at CMC Markets in Singapore, told AFP. The sharp falls in oil prices on Thursday coincided with the release of data showing growth in the 18-country eurozone stalled in the second quarter. Germany, the bloc's largest economy, shrank by 0.2 percent and France, the second-largest, had zero growth for six months in a row.
Prices also came under pressure from the release of a string of disappointing Chinese data on Wednesday. Downward pressure has come also from signs of weak demand, especially in top economy the United States, which on Wednesday said domestic commercial crude stockpiles had risen for the first time in seven weeks. Inventories increased by 1.4 million barrels to 367.0 million in the week ending August 8, the Department of Energy said. Earlier this week, the International Energy Agency said that the oil market appeared to be better supplied than had been expected, as it cut its global demand forecasts for this year and next. By Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in October slid to $102.38 a barrel compared with $104.89 for the September contract one week earlier. On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for September dropped to $95.63 a barrel from $97.42.
PRECIOUS METALS: Gold dropped over the week, dragged down by weak demand in top consuming countries China and India. Gold consumption fell by an annualised 16 percent in the second quarter of 2014 as Chinese and Indian buyers cut back after record purchases a year earlier, sector data showed Thursday.
A director of the World Gold Council (WGC) forecast the full-year result would also be lower than in 2013, but probably not represent as big a drop as during the three months from April through June. A total of 964 tonnes of the precious metal was bought in the quarter, according to figures compiled by the WGC, a federation of the biggest producers.
The decline was largely the result of weaker jewellery purchases, which typically account for half of global demand, and which were 30 percent lower at 510 tonnes, the data showed.
In top consuming countries, China and India, demand for gold jewellery fell by 45 percent and 18 percent, respectively, with specialists saying the markets may be saturated after a record buying spree last year. By Friday on the London Bullion Market, the price of gold slipped to $1,296 an ounce from $1,309.75 a week earlier. Silver fell to $19.86 an ounce from $20.13. On the London Platinum and Palladium Market, platinum retreated to $1,446 an ounce from $1,475.
Palladium increased to $878 an ounce from $857.
BASE METALS: Prices mostly dropped on the poor economic data from key importer China. "Metal prices find themselves under pressure across the board... after somewhat weaker economic data were published in China," analysts at Commerzbank said in a note to clients.
China's industrial production, which measures output at factories, workshops and mines in the world's second-largest economy, rose 9.0 percent year-on-year in July, the government said Wednesday. But this marked a slowdown from the 9.2 percent recorded in June. By Friday on the London Metal Exchange, copper for delivery in three months fell to $6,845 a tonne from $6,982 a week earlier.
-- Three-month aluminium dropped to $2,003.25 a tonne from $2,021.25.
-- Three-month lead slid to $2,199 a tonne from $2,237.50.
-- Three-month tin rose to $22,400 a tonne from $22,367.
-- Three-month nickel increased to $18,700 a tonne from $18,584.
-- Three-month zinc retreated to $2,272 a tonne from $2,295.
COCOA: Futures hit fresh three-year highs on strong demand.
Cocoa reached the highest peaks since July 2011, striking £2,031 a tonne in London and $3,248 a tonne in New York. "Cocoa continued its steady march higher as solid demand continues to provide support to the market," said Citi bank analyst Sterling Smith. By Friday on Liffe, London's futures exchange, cocoa for delivery in December rose to £2,029 a tonne compared with £2,009 a week earlier. On the ICE Futures US exchange, cocoa for December climbed to $3,233 a tonne compared with $3,222 a week earlier.
COFFEE: Prices diverged amid tight supply concerns in key producer Brazil. By Friday on ICE Futures US, Arabica for delivery in September dropped to 184.50 US cents a pound from 191.55 cents a week earlier. On Liffe, Robusta for September climbed to $1,943 a tonne from $1,937 a week earlier.
SUGAR: Futures fell against a backdrop of robust supplies. By Friday on Liffe, the price of a tonne of white sugar for delivery in October inched lower to $431.30 from $432.70 a week earlier. On ICE Futures US, the price of unrefined sugar for October fell to 15.95 US cents a pound from 16.13 US cents a week earlier.
RUBBER: Prices in Kuala Lumpur sank as a stronger ringgit currency deterred overseas demand, while concerns over China's economy and price declines for other commodities weighed, traders said. The Malaysian Rubber Board's benchmark SMR20 dropped to 166.05 US cent a kilo from 168.60 cents a week earlier.
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