(MENAFN- Gulf Times) The gold price was at $1237.97/ounce and silver price at $15.75/ounce by the end of last week. Gold had surged by close to 17% YTD and silver had surged by close to 13.5% YTD. Big sell-off in world stock markets this year sent investors and traders scrambling into the gold market as a safe haven.
There are growing concerns about the collective health of the major world economies. There was near certainty at the start of the year that the Fed would raise rates several times in 2016 which had diminished now and hence also giving boost to precious metals. Last week, the Federal Reserve Chair Janet Yellen has stated that the US economy faces a number of global threats that could hamper growth, but is still sticking to a plan of slowly hiking interest rates back to a more normal level over time.
The dollar index was at 95.94 by the end of last week. The weakening of the dollar index in recent times due to mixed economic data from the US and delay in rate hikes also gave boost to the precious metals.
The latest report from the World Gold Council shows that, since late 2015, the keen buyers have been investors and central banks.
WTI and Brent were at $29.44/barrel and $33.36/barrel by the end of last week and had dropped by more than 20% YTD and 10% YTD respectively on concerns of supply glut in global oil market. However, oil prices had surged as much as 12% last Friday after fresh hopes that Opec nations were set to cut oil production. Natural gas price was at $1.966/MMBTU by the end of last week and had fallen by more than 16% YTD. Natural gas price fell on expectations of cooler weather contributing to lesser demand in air conditioning.
Copper was at $4,506.75/tonne by the end of last week and had fallen by more than 4% in 2016 on concerns of Chinese slowdown.
However, last week, copper had some support on hopes that Chinese commodity funds had accumulated long copper positions on the Shanghai Futures Exchanges. Nickel was at $7,789.5/tonne by the end of last week and had fallen by more than 11% in 2016 due to the oversupply and a decline in nickel-based stainless steel demand. Aluminum was at $1,502.5/tonne and capacity curtailments are supporting the aluminium price in recent times.
Corn was at $3.63/ bushel by the end of last week. It had declined to a one-month low last week on ample world inventories and slow demand for US supplies of the grain. Wheat was at $4.62 /bushel by the end of last week and had fallen by more than 3% YTD during this year.
Wheat prices were down on concerns over demand for the US crop. Soybean was at $8.72/bushel by the end of last week and soybean prices slipped last week as progressing soybean harvest in South America pressurised prices.
Cocoa was at $2,874/tonne by the end of last week and had fallen by more than 10% YTD.
Cocoa prices had fallen this year on hopes of higher expectations of production from Ghana.
Coffee was at $117.50 /pound by the end of last week and had fallen by more than 9% YTD. Brazil forecast that coffee farmers will have a huge harvest season this year, creating an oversupply of beans, which has led to the drop in prices.
Sugar was at $13.12/pound by the end of last week and had fallen by more than 12% YTD. Favourable weather sentiments from Brazilian sugarcane production regions dragged sugar prices down.
The tumbling commodity prices have resulted in correction in global capital markets and rush of funds to precious metals as safe havens. It needs to be seen whether this will continue further or whether they can obtain some relief, amidst expectations of actions.
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