This monthly roundup will look at how crude oil looks to end the year, gold's up and down month and why copper seems ready to post its worst year since 2011.
Crude oil continues its decline as the year ends
Crude oil prices continued their long decline as investor concerns of a global oversupply persisted. The commodity began December trading just below $70/barrel. As the month ends, however, crude oil has sunk below $53/barrel and could possibly fall even further as the new year begins.
According to a December 31 report from MarketWatch, on the New York Mercantile Exchange, light, sweet crude futures for delivery in February dropped $1.15, or 2.2 percent, to $52.93 a barrel. Brent crude futures for February delivery on London's ICE Futures exchange dropped $1.85, or 3.2 percent, to $56.05 a barrel.
Analysts have suggested that the supply glut from OPEC, the unexpected U.S. shale boom and weakened Chinese demand for the commodity have all put downward pressure on crude oil prices.
Gold's up and down December
Gold started December by posting fairly consistent price increases until it reached a high point on December 9, reaching $1,204.20 at the day's close. From there, the precious metal saw persistent price declines for the rest of the month.
On December 31, Bloomberg reported that gold futures for February delivery fell 0.4 percent to $1,195.50 an ounce at 10:02 a.m. an ounce on the Comex in New York. The metal rose 1.6 percent the day before, briefly erasing declines for the year. This has left gold on the precipice of having either a winning or losing year for the first time since 1999.
"Gold has had several problems," George Gero, a precious metals strategist at RBC Capital Markets in New York, said in a telephone interview with Bloomberg. "The improving U.S. economy, the continued better labor picture, the lack of inflation, very strong stocks and the very strong dollar weighed on gold this year."
"Copper is headed for its worst year since 2011."
Weak Chinese demand sets copper prices up for their worst year since 2011
Copper is headed for its worst year since 2011 due to evidence that China's economy may be experiencing an economic slowdown. China is the world's largest consumer of industrial metals.
Copper prices rose in the beginning of the month, a move that analysts attributed to news that the Chinese central bank would undertake stimulus measures. The gains were short lived, however, when Bloomberg reported that the manufacturing Purchasing Managers' Index for China from HSBC Holdings Plc and Markit Economics came in at 49.6. A number below 50 tends to signal an economic slowdown.
On December 31, Bloomberg reported that copper for delivery in three months on the London Metal Exchange rose 0.2 percent to $6,334.50 a metric ton by 3:04 p.m. in Hong Kong. The metal is expected to have its second month of overall decline and appears poised for a 14 percent decline this year, the second-worst performer among the six main base metals on the LME.
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