Commodities: Russia caps gains in gold

Alexander Bueso WebFG News | 11 Aug, 2017 18:23 | | |

Gold bars


Friday saw Russian Foreign Minister Sergei Lavrov urge Pyongyang and Washington to sign up to a previously unveiled joint Russian-Chinese plan under which North Korea would freeze missile tests.

Speaking on the matter, Lavrov said, "Unfortunately, the rhetoric in Washington and Pyongyang is now starting to go over the top," adding "We still hope and believe that common sense will prevail."

Friday marks the third day in the US/N. Korean standoff, which has so far seen spot gold benefit over $30 from where it was trading at earlier this week, at $1,252. Bcause of those comments from Russia, the precious metal was only able to notch up a $2 move on the day to trade at $1,287 by the London close, also due in part by a weaker dollar which came as a result of worse than expected CPI and core CPI data (0.1% versus market expactations of 0.2%).

Michael McCarthy, chief market strategist at CMC Markets said, "I think the issue that is affecting the market is the general risk sentiment of saber-rattling between Washington and Pyongyang."

In other precious metals, spot platinum was up 0.31% to $984.76/oz. and palladium was down 0.45% to $894.96/oz..

After suffering major losses on Thursday, both WTI (West Texas Intermediate) and Brent crude stabalised on Friday, with both classes trading slightly lower on the day. WTI for September delivery was down 0.35% on the day with WTI for October delivery down 0.25%, to trade at $48.42 a barrel and $51.77, respectively.

Regarding the recent fall in oil, ANZ bank said in a note, "Crude oil prices failed to hold recent gains, with a nervous market starting to doubt recent falls in inventories," adding that "supply-side issues also weighed on prices."

Copper saw renewed buying interest at the $6,344 per metric tonne mark to take the base metal higher 0.3% by 1700 BST to trade at $6,430.

The red metal has seen a strong rally recently on the back of increasing optimism around Chinese growth, but stalled at the $6,500 mark as speculators booked profits.

In soft commodities, soybean futures for November delivery were fairly unchanged on the day, up 0.06% to $9.45/bushel, September corn was up 0.25% to $3.60 and cotton for December delivery was up 0.64% to $68.94/lb.

These rallies came after significant falls on Thursday following reports from the US Department of Agriculture (USDA) stating that harvests for all three will be significantly higher over the next month or so.

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