08/03/2015 05:35 AST
Commodity prices came under pressure last week from a strong dollar which surged to multi-year highs against the euro.
The dollar rallied as the European Central Bank neared the launch of its massive stimulus package and after strong US jobs data raised the possibility of a hike soon to Federal Reserve interest rates.
A strong dollar makes commodities priced in the US unit more expensive for holders of rival currencies.
The European single currency on Friday sank to $1.0845 - the lowest level since September 2003.
The ECB will meanwhile begin its €1.1tn quantitative easing stimulus tomorrow.
The US Labour Department said Friday that the US economy pumped out a stronger-than-expected 295,000 net new jobs in February.
“The dollar surged higher, having already gained substantially... from the European Central Bank’s quantitative easing programme and weak eurozone GDP growth,” said Alasdair Cavalla, economist at the Centre for Economics and Business Research.
OIL: Oil prices won support this week from unrest in Libya, helping to offset a surge in US crude inventories.
Michael McCarthy, chief market strategist at CMC Markets in Sydney, told AFP that traders were “seeing a lot of upside potential, possibly based on tensions in the Middle East and Ukraine”.
“Somehow, we are seeing investors looking away from the huge build in US (crude oil) inventories this week,” he added.
Libya’s National Oil Corp declared force majeure Wednesday at 11 oil fields after attacks by Islamists.
The Opec member country has been battling the rise of militias seeking control of its cities and oil wealth since the killing of dictator Moamer Kadhafi in 2011.
Unabated fighting has seen its output reduced from a high of almost 1.5mn bpd to 150,000, according to analysts.
In Ukraine, investors are closely watching latest efforts to prop up a ceasefire in the country’s eastern region, currently controlled by pro-Russia rebels.
The 10-month conflict in the country—a key conduit for Russian energy exports to Europe—is seen as Europe’s worse since the war in the Balkans in the 1990s.
Data on Wednesday meanwhile showed a 10.3mn barrel surge in US crude reserves in the week to February 27, which dampened expectations of robust demand in the world’s biggest economy. The global oil market has lost about 50% of its value since June, weighed down by the global supply glut.
By Friday on London’s Intercontinental Exchange, Brent North Sea crude for delivery in April slid to $60.10 a barrel from $61.67 a week earlier.
On the New York Mercantile Exchange, West Texas Intermediate or light sweet crude for April rose to $49.83 a barrel from $48.94 a week earlier.
PRECIOUS METALS: Gold and sister metal silver dropped as the dollar shot higher.
“Precious metals came under some renewed selling pressure as the dollar resumed its ascent against most currencies,” said Saxo Bank analyst Ole Hansen.
By Friday on the London Bullion Market, the price of gold fell to $1,175.75 an ounce from $1,214 a week earlier.
Silver slumped to $15.99 an ounce from $16.53.
On the London Platinum and Palladium Market, platinum slipped to $1,166 an ounce from $1,177.
Palladium rose to $823 from $808 an ounce.
BASE METALS: Base or industrial metals were mixed as investors reacted also to a growth outlook from commodities-hungry China.
China on Thursday lowered its 2015 economic growth target to “approximately seven%”, scaling down expectations in the face of “formidable” difficulties for the world’s second-largest economy after its decades-long boom.
The figure announced by Premier Li Keqiang is the lowest since a similar goal in 2004 and comes after China’s gross domestic product (GDP) expanded 7.4% in 2014, the slowest pace in 24 years. Last year’s target was “about 7.5%”.
AFP
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