The commodity group fell sharply after the broad-based sales wave that came when investors were affected by the coronavirus crisis.
Energy, metals and agricultural raw materials moved down. Even the traditional safe harbor gold received its sales.
Escape from risk assets brought hard sales in petroleum, copper, iron and palm oil. It is stated that the decrease below is due to the sales made due to the need for funds for collateral calls after the sharp declines in the stock markets due to negative news about the coronavirus.
Significantly, fears that demand for commodities will collapse, as broad-based sales coincide with declines in stocks, the spread of the virus and negatively affect global economic growth. The sales wave got stronger despite the fact that US President Donald Trump recorded in Twitter that the virus spread “very slowly” in the USA.
In major markets, Brent oil headed for its biggest weekly loss since 2016, before the meeting in Vienna, where OPEC and its partners could decide to cut production to support prices. Brent oil on April futures fell 3.1 percent to $ 50.59 a barrel in the ICE Futures Europe market, bringing this week’s loss to 13 percent.
In Singapore, Oversea-Chinese Banking Corp. “Given the drop in oil prices so fast, the production cut decision that could be announced next week may be a little late,” said economist Howie Lee. “If OPEC and its partners go to a production cut of 1 million barrels a day, it may cause prices to rise a bit, “will create some disappointment.”
Spot gold fell 1.4 percent to $ 1,621.29 an ounce, with global stocks dropping about 9 percent in four days as of Thursday, and futures contracts indicated that Wall Street would sustain losses on the last trading day of the week.
Standard Chartered Bank noted that the decrease below was due to sales made to meet the collateral completion calls caused by investors’ sharp decline in stocks, but the long-term outlook of gold was positive depending on the expectations that Fed2 would go relax.
“We can see that sales are going on a bit, so better entry levels can occur,” said Bank’s precious metals analyst Suki Cooper, commenting on Bloomberg TV. “But beyond that, we think the upward circus still continues for gold”.