Gold, Silver and platinum prices rise but oil prices are lower
London (Jan 12) Precious Metals: Gold and silver prices rose on the back of the weaker greenback, as disappointing payrolls data sparked speculation that the US Federal Reserve could delay further tapering of its stimulus.
The US Federal Reserve will start cutting its vast $85bn-a-month QE stimulus programme this month by $10bn, in a sign of confidence in the nation’s economic recovery. However, Friday’s data did not appear to give the central bank more ammunition to further cut its stimulus soon, dealers said.
“The unexpectedly poor US employment number has given gold and silver prices a significant boost ... raising the prospect that any further stimulus reduction could well have to wait until March at the earliest,” added CMC Markets analyst Michael Hewson.
The weaker greenback makes dollar-priced commodities cheaper for buyers using stronger currencies. That tends to stimulate demand and prices.
By late Friday on the London Bullion Market, the price of gold rose to $1,244.25 an ounce from $1,234.50 a week earlier. Silver eased to $19.80 an ounce from $20.18. On the London Platinum and Palladium Market, platinum increased to $1,425 an ounce from $1,388. Palladium advanced to $737 an ounce from $723.
Global oil prices sank last week to an eight-month low in New York on high US crude and product stockpiles that indicated supplies continue to outpace demand.
Commodity markets also reacted on Friday to weaker-than-expected key economic data in the United States, which is a major consumer of raw materials.
The US added a paltry 74,000 jobs in December, in a slowdown in employment creation that dampened hopes that the world’s biggest economy has moved into higher gear. The Labour Department data was far below the 197,000 jobs economists had expected, and less than half the monthly average of the past 12 months.
OIL: New York’s main oil contract West Texas Intermediate plunged on Thursday to $91.66 per barrel, a level last seen on May 1. The US Energy Information Administration reported on Wednesday that crude stockpiles fell last week by a smaller amount than analysts had expected.
“The (price) weakness was partly due to concerns about the excess supply of oil in the US, which came to the forefront once again after crude inventories showed a smaller reduction than had been priced in,” said Forex.com analyst Fawad Razaqzada. “What’s more, the opening of a major oilfield in Libya meant concerns about disruption of supply in that region had eased a tad.”
Oil prices are likely to face further downward pressure, with Libyan output up to 546,000 barrels a day from 250,000 barrels a day previously. Despite the increase in output, analysts do not expect Libya to return to its previous output of 1.4 million barrels soon.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in February dropped to $106.33 a barrel from $108.25 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for February fell to $92.27 a barrel from $95.45.
