Commodities: Gold rallies after Barcelona attacks and Trump dissaray

Digital Look Sharecast | 18 Aug, 2017 18:48 - Updated: 18:49 | | |

Gold bars

Friday saw markets waking up to terror attacks in Barcelona which left 14 people dead and around 100 injured.

Add to the mix increased political uncertainty in the US, due to a break-down in relations between Donald Trump and various panels of business leaders, and it's fair to say the markets traded with an air of caution.

Safe haven gold benefited from the global fear factor with the December contract up 0.65% to $1,301/oz by 1600 BST, just about holding ground above psychological resistance at $1,300 and spot gold up 0.66% to $1,295.

"There is clearly more for financial markets to be concerned about," Danske Bank analyst Jens Pedersen said, referring to US political uncertainty and the attack in Spain. "That has led to a risk-off environment, and that's supportive for gold."

In other precious metals moves, spot silver closed 0.02% lower to $17.04/oz., platinum traded higher to $978.60 and palladium was up 0.09% to $925.10 after touching a 16-year high ($934) earlier in the day.

In base metals, copper traded slightly lower on the day to $6,492 a metric tonne, but closed the week up by 0.94%.

Clouded by Chinese data earlier in the week, this did not deter longs, as summed up by Nitesh Shah at ETF Securities, "A couple of weaker data points from China this week are not really going to derail the demand story. At the same time the supply of all industrial metals is generally quite tight."

Prices could rise further as Chinese demand will likely remain solid until at least the end of the year, Shah said.

The IMF (International Monetary Fund) upgraded it's short-term Chinese growth forecast this week saying a construction spending spree was still supporting the economy, despite a slowdown in home price growth.

Energy markets on Friday saw both grades of crude up on the day by about $1.50, with the September WTI (West Texas Intermediate) contract up 2.83% to $48.43/barrel by 1744 BST and the October brent crude benchmark up 3% to $52.59.

"The main question is whether we will continue to see the kind of inventory draws that may show the supply-demand balance is tightening over the next few weeks," said Gene McGillian, director of market research at Tradition Energy.

Oil trading dring the week was dogged by data concerning Chinese oil demand and rising crude and shale production in the US.

On the agricultural front, soybean futures for November delivery were up 0.28% on the day to trade at $9.37/bushel alongside September corn trading higher to $3.51 bushel.

Soybeans have been underpinned this week by renewed export demand, suggesting a window for US exports despite record harvests in rival exporter Brazil.

BMI Research analysts said in a note, "Weather conditions remain favorable for upcoming Northern Hemisphere corn and soybean harvests."

More news

17:49 Europe close: Stocks finish higher on strong PMI readings

Stocks on the Continent finished mostly higher on the back of strong survey readings on the euro area's manufacturing and services sector and ahead of the German general elections at the weekend, although fresh barbs from Pyongyang were a drag on sentiment.

17:34 Thousands of steel workers protest ThyssenKrupp merger in Germany

Thousands of steel workers gathered in Western Germany on Friday to protest the proposed merger of ThyssenKrupp and Tata Steel's European operations which was expected to result in approximately 4,000 job losses.

17:27 London Close: FTSE firmer as pound losses ground after May speech

London stocks had reversed earlier losses to trade a little higher by Friday's close, helped along by a weaker pound as investors weighed up a key speech by Prime Minister Theresa May.

17:08 JP Morgan Chase to establish global headquarters in Warsaw

Polish Deputy Prime Minister Mateusz Morawiecki announced on Friday that US bank JP Morgan Chase had picked Warsaw to play host to its new global operations centre, bringing thousands of jobs to the region from the beginning of 2018.

17:08 FTSE 250 movers: Pets at Home dashes higher, oilers also lifted

The FTSE 250 index was on the front foot on Friday, led by retailer Pets at Home and a group of oil-related companies.

16:56 Theresa May calls for post-Brexit transition period, new security treaty

In a speech in Florence on Friday, Prime Minister Theresa May confirmed that she wanted a two-year "implementation period" post-Brexit and a new treaty with the European Union on security and justice.

15:54 FTSE 100 movers: Johnson Matthey rallies again but Smiths drops on results

London's FTSE 100 was up 0.6% to 7,305.66 in afternoon trade on Friday as investors mulled over PM Theresa May's Brexit speech in Florence.

15:39 Results round-up

Saga, the specialist provider of products and services for those over 50, reported solid growth of 5.5% in underlying profits before tax for the first half as it ordered a second new cruise ship amid high demand.

15:32 US economy shows resilience in face of hurricanes - Markit

Business activity in the US picked up in September despite hurricanes Harvey and Irma, as growth in the manufacturing sector helped to offset an easing in services, according to preliminary data released on Friday.

15:25 Thalassa suspends share buyback as FairfieldNodal commences due diligence

Thalassa Holdings confirmed the suspension of its share buyback programme on Friday, as a suitor continued to circle the marine geoscience and subsea robotics company.