Commodities decline as gold, oil futures finish lower

Fri 2:42 pm by Deborah Bacal

Gold futures finished down on Friday, posting a loss of 1.8% for the week as the yellow metal consistently failed to reclaim the key $1,700 an ounce level.

 

Gold futures finished down on Friday, posting a loss of 1.8% for the week as the yellow metal consistently failed to reclaim the key $1,700 an ounce level.

February gold fell $13.30, or 0.8%, to settle at $1,656.60 an ounce on the Comex division of the New York Mercantile Exchange.

Morgan Stanley on Thursday cut its 2013 outlook for average gold prices by 4% to $1,773 a troy ounce, but said they remain bullish on the metal, despite recent selling pressure triggered by market concerns of an earlier-than-anticipated tightening in U.S. monetary policy.

A series of banks in recent weeks have cut their outlooks for gold prices this year.

On Wednesday, the U.S. House approved an extension of the debt ceiling until May 19, and jobs data Thursday increased speculation that the Federal Reserve will be able to remove its easing policy sooner.

U.S. jobless claims last week dropped 5,000 to 330,000 – marking the lowest level since January 2008. The consensus estimate was for claims to rise from 335,000 to 360,000.

Manufacturing data in the U.S. and China yesterday also helped support stocks, which lured investors away from the yellow metal’s safe haven appeal.

In Europe, the preliminary Markit euro-zone composite purchasing-managers’ index showed activity continued to contract across the region, but at the slowest pace in 10 months.

And on Friday, the business-climate index for Germany reportedly rose to 104.2 in January from 102.4 last month. Traders were also pleased to learn that the European Central Bank said banks will repay US$184.3 billion in three-year loans next year – more than expected.

Meanwhile, March crude finished down slightly by 0.1% for the day, or 7 cents, to end at $95.88 a barrel. It lost 0.2% on the week.

On Thursday, weekly inventories data showed soft demand from refineries made for a 2.8 million barrel build in oil inventories which, at 363.1 million barrels, remain well above their upper limit.

Gasoline inventories fell 1.7 million barrels though distillate inventories, despite weak production, did rise, up 0.5 million barrels.

Today, the Commerce Department reported that new home sales unexpectedly dropped in December, sliding 7.3% to an annual rate of 369,000, missing Street expectations for 385,000.

Fri 2:42 pm by Deborah Bacal

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