Crude Spikes Nearly 2-Percent Higher on Middle East Concerns

Copper prices closed lower on Friday, hitting a one-week low while also finishing the week on the downslide. The market was pressured by a stronger U.S. Dollar and lingering concerns that U.S. tariffs could provoke a trade war, though hopes for strong growth in China helped limit losses.

May Comex High Grade Copper settled at $3.1075, down $0.0200 or 0.64%.

The dollar was supported by higher U.S. equity markets, which limited demand for safe haven assets. Better-than-expected economic data showed strong U.S. factory output and improving consumer sentiment, though worries over turmoil in the Trump administration capped gains.

Although data and forecasts are indicting stronger demand, especially in China, and the deficit in the copper market is likely to continue this year, traders aren’t sure if this news has already been priced in, or about the impact of the U.S. Dollar.

Copper traders also continued to be shaken by the ouster of Secretary of State Rex Tillerson after President Trump fired him earlier in the week. Tillerson was viewed as a free trade proponent. According to reports, Trump then sought to impose $60 billion of tariffs on Chinese imports.

Gold

Gold finished lower on Friday while posting its biggest weekly decline in three weeks on pressure from a stronger U.S. Dollar and expectations that the U.S. Federal Reserve will raise interest rates next week for the first time this year. Losses were limited, however, by political turmoil in the White House, which fueled some demand for the safe-haven asset.

April Comex Gold futures settled on Friday at $1312.30, down $5.50 or -0.42%.

Also providing support and limiting losses was a report in the Washington Post which said Donald Trump’s national security adviser, H.R. McMaster, would become the latest senior official to leave his position. Additionally, the New York Times said U.S. Special Counsel Robert Mueller had issued a subpoena for documents related to Trump’s businesses.

Gold traders were also monitoring the diplomatic crisis between Russia and Britain over the poisoning of a former Russian double agent on U.S. soil. The U.K. expelled 23 Russian diplomats from the country, however, this was met by a similar move by the Russian government.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures spiked nearly 2 percent higher late Friday, erasing losses for the week, as tensions rose in the Middle East.

May WTI Crude Oil settled at $62.41, up $1.16 or +1.89% and June Brent Crude Oil closed at $66.21, up $1.26 or +1.94%.

Thin trading conditions and nervous traders may have contributed to the sudden move to the upside. Short sellers covered aggressively on a report that a “60 Minutes” segment, set to air on Sunday, shows Saudi Arabia’s crown price, Mohammed bin Salman stating that his country would obtain a nuclear bomb if Iran developed its own.