London - Afp
Most commodity prices rose this week as traders welcomed broadly upbeat economic data which increased investor appetite for risk. However, some markets ran out of steam heading into the weekend following much-weaker-than expected US payrolls figures on Friday. The American economy created a paltry 18,000 jobs in June, well short of modest forecasts for 80,000, pushing the unemployment rate up to 9.2 percent and signalling that US growth stayed very weak during the second quarter. The data was a letdown for investors who had hoped that the world's biggest economy was getting back on track -- and sparked caution. "The report was a timely reminder that the world's biggest economy is still fragile and that its health seems inconsistent with the current level of the prices of many risky assets," warned Capital Economics analyst Julian Jessop. Some markets were also spooked by Tuesday's sharp Moody's ratings downgrade to Portugal which added to the view that the eurozone debt crisis was worsening. OIL: Prices zoomed higher on Thursday, and largely held onto those gains, with London Brent crude up almost $5 per barrel, as traders reacted to a series of positive economic data releases from around the world. Payrolls firm ADP said that US private businesses added 157,000 jobs in June while German industrial production jumped in May, gaining 1.2 percent following a decline of 0.8 percent in April. "Oil prices rose on increased optimism over the world economy," said Westhouse Securities analyst Peter Bassett. "In the US, economic data showed a better than expected number for job creation. In addition, May German industrial output increased more than expected." However, the gains were tempered by Friday's weak US non-farm payrolls report. US crude inventories meanwhile fell 900,000 barrels in the week ending July 1, according to figures Thursday. That was well short of market forecasts for a 2.4-million-barrel drop. Gasoline (petrol) reserves fell 600,000 barrels. That confounded expectations for a gain of 200,000 barrels and indicated stronger demand as prices fell and summer vacations began. By late Friday on London's Intercontinental Exchange, Brent North Sea crude for delivery in August was higher at $117.60 a barrel from $110.42 a week earlier. On the New York Mercantile Exchange, West Texas Intermediate (WTI) or light sweet crude for August climbed to $96.27 a barrel from $94.29. PRECIOUS METALS: Safe-haven gold sparkled as Moody's ratings agency delivered a shock downgrade to Portugal. Moody's slashed its credit rating on indebted eurozone struggler Portugal, bailed out earlier this year, by four notches to Ba2 from Baa1, and warned it could need another rescue deal. "Prices have extended their gains amid interest rate hikes (and) heightening in uncertainty surrounding European sovereign debt risks," Barclays Capital analysts said. "The external environment remains favourable for gold and prices have sidelined the seasonal weakness in demand." By late Friday on the London Bullion Market, gold rebounded to $1,541.50 an ounce from $1,483 the previous week. Silver rose to $36.28 an ounce from $33.85. On the London Platinum and Palladium Market, platinum advanced to $1,740 an ounce from $1,708. Palladium increased to $776 an ounce from $750. BASE METALS: Base or industrial metals rallied. "The metals remain robust; copper and lead seem to be in the driving seats," said FastMarkets analyst William Adams."The rebounds do look robust so further gains cannot be ruled out." By late Friday on the London Metal Exchange (LME), copper for delivery in three months soared to $9,659 a tonne from $9,423 the previous week. Three-month aluminium rose to $2,534 a tonne from $2,514. Three-month lead gained to $2,692 a tonne from $2,667. Three-month tin advanced to $26,902 a tonne from $25,850. Three-month zinc firmed to $2,380 a tonne from $2,375. Three-month nickel climbed to $23,596 a tonne from $23,250. COCOA: The market rose on supply worries about the next 2011-12 crop season in Ivory Coast, the world's biggest producer. "After an excellent 2010-11 harvest in the Ivory Coast ... attention is now turning to the next season," said Commerzbank analyst Carsten Fritsch. "It is doubtful whether the weather in the main cocoa growing region West Africa will be as good as in the current season." By Friday on LIFFE, London's futures exchange, cocoa for delivery in September gained to £2,035 a tonne from £1,972 the previous week. In New York on the NYBOT-ICE, cocoa for September increased to $3,195 a tonne from $3,118. COFFEE: Coffee futures won limited support. "A softer tone in the US dollar and a renewed appetite for commodities in the international markets provided some support," trade publication The Public Ledger commented. "While uncertainty over Brazilian production was also supportive, the lack of any new weather-related scares tempered the upside in coffee." By Friday on NYBOT-ICE, Arabica for September rose to 269.10 US cents a pound from 253.50 cents the previous week. On LIFFE, Robusta for delivery in September eased to $2,463 a tonne from $2,486. SUGAR: Sugar prices were mixed in ubdued trade. By Friday on NYBOT-ICE, the price of unrefined sugar for delivery in October rose to 29.27 US cents a pound from 26.56 cents the previous week. On LIFFE, the price of a tonne of white sugar for August fell to £744.60 from £749.50. GRAINS AND SOYA: Corn or maize prices rebounded from recent losses. "Corn prices ... have posted a modest recovery with recent price declines being met with an uptick in import demand especially from China, with a key intent being to replenish domestic reserves," Barclays Capital analyst Sudakshina Unnikrishnan saiud. By Friday on the Chicago Board of Trade, maize for delivery in September rose to $6.44 a bushel from $6.06 a week earlier. November-dated soyabean meal -- used in animal feed -- slipped to $13.41 a bushel from $13.12. Wheat for September advanced to $6.52 from $6.12. RUBBER: Malaysian rubber prices rose, supported by increased buying interest from local traders. The Malaysian Rubber Board's benchmark SMR20 increased to 456.15 US cents per kilo from 440.45 US cents a week earlier.