Commodities: Driven higher as a weaker USD kept investor appetite high - ANZ

Research Team at ANZ, notes that the commodities were driven higher by further buying in industrial metals on Friday as a weaker USD kept investor appetite high.

Key Quotes

“Further doubts about OPEC’s production cut agreement saw crude oil prices tumble. Saudi Arabia pulled out of talks with non-OPEC members on Friday, suggesting they are struggling to get Russia and others to join the agreement. Even within OPEC itself, debate continues to rage about whether Iran should cut or freeze production.”

“Industrial metals were mixed, with zinc surging higher while nickel and aluminium struggled to keep their heads above water. Imports of refined zinc into China in October jumped over 50% from the previous month as demand for galvanised steel improved. Sentiment in the Chinese steel market picked up after the Chinese government pledged to clamp down on illegally expanded capacity. This helped push steel prices higher and dragged iron ore prices with it. China’s premier Li Keqiang has said inspection teams will investigate and punish companies that are violating the rules.”

“A slightly weaker USD saw gold prices recover some of the losses achieved earlier in the week. Buying also emerged as prices hit a key technical level.”

“Agriculture markets were mixed, with a holiday-affected week keeping volumes low. Sugar was higher on the back of a stronger Brazilian real while wheat fell as investors locked in recent gains.”