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Oil, copper bounce on stronger U.S. jobs data Better than expected US labour figures eased fears the economy was heading into recession, and helped gold and copper prices continue their recent rally
Oil, gold and copper extended a recent rally on Friday and headed for weekly gains as investors took heart from better-than-expected U.S. jobs data and moves to contain the European debt crisis. U.S. employment grew more than expected in September and job gains for the prior months were revised higher, which eased fears theeconomywas heading into recession. "They look awfully good relative to last month," said Kurt Karl, chief U.S. economist at Swiss Re in New York. "Certainly it is very promising. Hopefully it is sustainable and continues so that we can avoid recession." Spot gold was poised for its first increase after four straight weeks of falls, U.S. crude CLc1futuresheaded 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. The 19-commodityReuters-Jefferies CRB index rose 0.3 per cent and was set for a weekly gain of 2.5 per cent its strongest weekly showing since March. "It's a breath of fresh air (the jobs data) and should allow the risk recovery we've had this week to continue," said Brian Dolan, chief strategist at Forex.com in New Jersey. Also supporting commodities was a weaker dollar against a basket of majorcurrencies. Market confidence on Thursday 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. OIL REBOUNDS Oil dipped into negative territory during European trading on profit taking, but bounced back after the U.S. jobs data was released. U.S. crudeCLc1 gained as much as 1.7 per cent to $84 a barrel, sending prices surging 6 per cent this week in the biggest such jump since March. Brent LCOc1 added 0.9 per cent to a high of $106.64 a barrel. Olivier Jakob, oil analyst at Petromatrix in Switzerland, said that Brent needs to close above $105 a barrel to maintain some momentum next week. "The problem is that buying above that level one needs to have a next target at $110 a barrel and a great confidence in the global economy for the sustainability of such price levels," he said. COPPER JUMPS LME copper also got a shot in the arm from the U.S. data, extending gains. It climbed as much as 2.1 per cent to a high of $7,375 a tonne. Copper has gained 4.1 per cent so far this week, following a drop of 22 per cent 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. Also supportive to prices was data showing copperstocksat LME warehouses fell 4,625 tonnes to 467,100 tonnes. Inventories are still about a third higher since last December. MCU-STOCKS Copper's rebound this week happened at a time when top consumerChinawas off for a week-long public holiday, and traders say that suggests the rally might be short lived. Market participants have a mixed view on how the Chinese will react when trading there resumes on Monday, with some saying they could chase prices either way given most have squared positions prior to the National Day break. Gold's reaction to the jobs data was more muted, hovering modestly higher at $1,653 per ounce, little changed on levels before the release. Spot gold was poised for a 2 per cent weekly gain after three weeks of losses, which had taken it further away from September's lifetime high around $1,920. Platinum , more exposed to the global economy through its use in auto catalysts, gained 1 per cent to $1,528 an ounce. WHEAT SLIDES In agriculturalmarkets, Chicago wheat futures swam against the tide, giving up earlier gains to shed more than 1 per cent as a surprise move by Ukraine's parliament to cancel export duties underlined competition from ample Black Sea supply this season. Corn also fell more than 1 per cent while soybeans were also weak, staying near a one-year low, as the crops continued to face harvest pressure amid favourable weather for field work in the U.S. Midwest. Grains trade is expected to remain choppy until next Wednesday's release of the U.S. Department of Agriculture's monthly supply and demand report, when the government will update its crop production forecast. Sugar futures jumped 4 per cent on fund buying while coffee and cocoa futures also rose.
