Most non-agricultural commodities rose on the last day of the week with gold consolidating above the crucial mark of $4,000-per-ounce.
Oil prices also climbed on Friday after spending most of the week in the red. Prices are set for second straight weekly losses.
Base metal prices rose as investors resorted to bargain-buying after most contracts had fallen earlier this week.
Gold climbs
Demand for gold was boosted on Friday by expectations of more interest rate cuts from the Federal Reserve, along with persistent worries about the US economic outlook stemming from a lengthy government shutdown.
At the time of writing, the December gold contract on COMEX was at $4,005.72 per ounce, up 0.4%.
Businesses cutting costs and adopting artificial intelligence led to a spike in announced layoffs in the US.
This, combined with job losses in the government and retail sectors, resulted in the US economy shedding jobs in October, according to data released on Thursday.
A weak jobs report often increases the likelihood of Fed interest rate cuts.
Consequently, market participants now anticipate a Fed rate cut in December with a 67% probability, an increase from approximately 60% before the report.
This is despite the Fed having cut rates last week, with Chair Jerome Powell suggesting it could be the final reduction in borrowing costs for the year.
Gold ETF holdings reached a five-year high of 3,892 tons in October, following a net inflow of 55 tons, according to data released Thursday by the World Gold Council.
This marks the fifth consecutive month of net inflows and the ninth such month this year. Since the start of the year, total net inflows have amounted to just under 674 tons.
“Gold is therefore likely to remain in demand as a safe haven, even though the US dollar has recently gained some ground again,” Barbara Lambrecht, commodity analyst at Commerzbank AG, said in a report.
In addition, we continue to expect stronger interest rate cuts in the US than the market is currently pricing in.
Oil set for weekly loss
Despite a rise on Friday, oil prices are still headed for their second weekly decline in a row.
This follows three days of decreases driven by concerns over slow US demand and an oversupply of oil.
At the time of writing, the price of West Texas Intermediate crude was at $59.96 per barrel, up 0.9%, while Brent was 0.8% higher at $63.86 a barrel.
Weekly declines of 1.5% are anticipated for both benchmarks, driven by the increased output from major global producers.
According to the Energy Information Administration’s Wednesday report, US crude oil stockpiles increased more than anticipated.
This rise was attributed to a higher volume of imports and a decrease in refining activity.
Conversely, inventories for both gasoline and distillates saw a decline.
Oil prices were also negatively impacted by anxiety surrounding the repercussions of the extended US government shutdown.
A recent order from the Trump administration has mandated fewer flights at major airports due to a lack of air traffic controllers.
This development coincides with independent reports suggesting that the US labor market softened in October.
Meanwhile, in October, China, the world’s largest oil importer, saw a rise in its crude imports.
The customs data indicated an import volume of 48.36 million tons, marking a 2.3% increase from September and an 8.2% jump compared to the previous year.
This elevated import level occurred as the nation’s refineries maintained high utilisation rates.
Base metals
Base metals edged higher in London as investors took a pause at the end of a lacklustre week that’s seen prices come under pressure.
“Concerns about the US economy, uncertainty over the pace of Federal Reserve rate cuts, and a stronger dollar have all weighed on the complex,” Neil Welsh, head of metals at FCA-regulated multi-asset brokerage Britannia Global Markets, said in an emailed commentary.
China’s external resilience is faltering as October’s export drop suggests high tariffs, global trade uncertainty, and cooling overseas demand are overcoming months of front-loading.
Welsh added:
This highlights the need for Beijing to keep supporting domestic demand and prevent weak spending from dragging on growth.
Exports saw their first year-over-year decline in eight months, dropping 1.1%. This figure fell short of the consensus forecast for a 2.9% gain.
Month-over-month, exports decreased by 7.0%, a performance significantly weaker than the 2017-2024 average drop of 3.5%.
Conversely, imports grew by 1.0% month-over-month, a sharp deceleration from the 7.4% increase recorded in September, and missed the consensus forecast of 2.7%.
“Participants in the aluminum market, and in the coming days also those in the copper market, will be paying particular attention to production figures, as Chinese production of both metals had recently reached a plateau of sorts,” Commerzbank’s Lambrecht said.
Should this trend continue, it is likely to support prices.
At the time of writing, the three-month aluminium contract on the London Metal Exchange was at $2,860.45 per ton, up 0.6%. Copper was at $10,733.25 per ton, up 0.5%.
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