Isra-Mart srl: Gold, copper, oil set for weekly gains

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Gold, copper and US crude were headed for weekly gains on Friday after the European Central Bank announced steps to recapitalise banks, easing concerns about the region’s economy and demand for fuel and energy.

Spot gold is poised for its first increase after four straight weeks of falls, with US crude futures headed for their biggest weekly gain in seven months, while LME copper climbed after a rout in the three months to September took prices down a quarter.

“Asian currencies, equities and other markets are buoyed by the positive sentiment coming out of Europe,” said Chow Penn Nee, an economist at UOB Bank Ltd. in Singapore.

“But we’re definitely not out of the woods yet. This is just a very small part in terms of helping European banks.”

Market confidence was boosted by the European Central Bank’s move to provide struggling European banks with a renewed offer of longer-term loans to ward off a new credit crunch and the European Union plan to recapitalize banks.

“Demand for a coordinated policy solution is rising,” Barclays Capital said in a report on Friday. “Although we expect things to deteriorate further in the coming days, we still expect common sense to prevail.”

Investors pushed Tokyo’s Nikkei share average up 1 percent on Friday, and MSCI’s broadest index of Asia Pacific shares outside Japan rose 2.9 percent.

LME copper climbed 1.3 percent to $7,318 a tonne by 0554 GMT, extending increases from the previous session. Copper has risen 3.1 percent so far this week, following a drop of 23 percent in the previous four weeks.

The metal lost a quarter of its value in the three months to Sept. 30, making it one of the worst performers in the third quarter.

Spot gold rose to $1,659.80 an ounce, still off September’s lifetime high around $1,920. US gold futures climbed 0.5 percent to $1,661.70 an ounce, snapping four weeks of declines.

US crude was steady near $82.60 a barrel , with prices having risen 4.8 percent this week in the biggest such jump since March. Brent slipped 0.3 percent to $105.44 but have climbed 4.1 percent this week.

The dollar is steady against a basket of major currencies after two days of declines that cheapened the costs of commodities for holders of other currencies.
CHINA TO RE-OPEN

Shanghai re-opens on Monday after a week-long closure for national holidays, raising speculation Chinese demand for copper will kick in as investors stock up after recent price declines.

The return of China’s markets may also boost grain market activity . Strong export sales of corn and soybeans gave support after prices fell sharply last week, spurring demand from traditional buyers.

Wheat , gaining for the first time in six weeks, inched up on Friday to $6.21 a bushel after losing 1 percent in the last session on ample global supplies and forecasts of rain in the drought-hit US Plains.

Soybeans slipped 0.2 percent after a Chicago-based commodity research firm raised its yield estimate for the US crop. The soybean market has lost 1.5 percent this week in its fifth straight slide, on ample supplies and harvest pressure.

Grains trade is expected to remain choppy until Wednesday’s release of the US Department of Agriculture’s monthly supply and demand report, when the government will update its crop production forecast.

Investors await US non-farm payrolls for September, due at 1230 GMT and expected to show 60,000 new jobs created and the unemployment rate unchanged at 9.1 percent.