Gold, Crude Oil Bulls Trim Positions Ahead of Weekend

Despite a weaker Greenback, dollar-denominated commodity markets finished mixed as gold and crude oil investors trimmed long positions ahead of the week-end.

Copper

Copper prices finished slightly higher on Friday in a lackluster trade. The dollar-denominated asset was likely supported by a weaker U.S. Dollar which made it more appealing to foreign buyers. A steep drop in aluminum prices likely limited gains.

July Comex High Grade Copper settled at $3.1115, up 0.0015 or +0.05%.

The market was also underpinned this week by falling copper inventories, as well as signs of strong demand. Technically, the trend turned up on the daily chart when buyers took out $3.1215, but there was little follow-through to the upside.

Gold

Gold closed slightly lower on Friday, but still managed to post its first weekly gain in four weeks. The market was supported this week by lower Treasury yields and a weaker U.S. Dollar, which were pressured by speculators betting the U.S. Federal Reserve would be less-aggressive when raising interest rates this year.

June Comex Gold settled at $1320.70, down $1.60 or 0.12%.

Gold was also underpinned mid-week by increased tensions in the Middle East after President Trump announced the U.S. would withdraw from the Iran nuclear accord. However, this thought was tempered later in the week. The announcement of a summit between the United States and North Korea to be held in Singapore also eased geopolitical fears.

Crude Oil

U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled lower on Friday, but remained within striking distance of 3 ½ year highs reached earlier in the week.

July WTI crude oil settled at $70.68, down $0.63 or -0.89% and July Brent crude oil closed at $77.12, down $0.35 or -0.45%.

Despite the setback on Friday, speculators are still banking on higher prices over the near-term due to sanctions against Iran that are expected to cut exports from the country by at least 500,000 barrels per day (bpd). This news combined with OPEC-led production cuts could drive crude prices to $80.00 according to estimates.

However, there are some who argue that Saudi Arabia, Kuwait and Iraq could raise production to meet the short-fall. Additionally, rising U.S. production could also help limit gains. This week’s rig count from GE’s Baker Hughes division showed U.S. drillers added 10 rigs to a total of 844.