Commodities prices rose across the board. The front-month contract on
Brent (ICE) gained about 0.7 percent and thus lagged behind the most of major commodities. However, Brent’s underperformance might have been even more apparent – right after the release of the US payrolls report,
Brent price shrunk to as low as 112.50
USD per barrel (USD/bbl). However, later in the afternoon, it erased the losses and settled back above 114 USD/bbl.
Base Metals
Base metals prices posted significant gains on Friday. The three month contract on
aluminium (LME) breached 2000
USD per ton (USD/t) level for the first time since early June whereas
copper hit four-month high above 8000 USD/t.
Today,
copper even extends previous gains although China’s data released today in early trading fell short of market expectations. Exports grew less than forecast while imports dropped unexpectedly in August (copper imports fell 2.9 % M/M), raising speculation that the government will come up with additional stimulus measures after those already announced last week. As a result, the three month contract on
copper (LME) is seen even above 8100
USD per ton at the time of writing.
Precious Metals
Gold hit 6-1/2 month high on Friday after the US payrolls report fell short of market consensus. Of late, Bernanke had voiced strong language on more policy stimulation unless growth and employment would improve substantially. So, the disappointing payrolls report raised the chance that the Fed will reactivate the printing press this Thursday (our scenario). If this is the case, the price of
gold might easily breach 1800
USD per troy ounce level.