Commodities Wrap 7 August: Gold Climbs 2.2 Percent After Jobs Shock While Sugar Jumps

By The Edge Research Team

Precious metals led commodities higher on Friday after a surprisingly weak US jobs report knocked the dollar and Treasury yields lower, while oil closed a volatile week with a second day of gains. Brent crude settled up 1.30 percent at 83.56 dollars a barrel and West Texas Intermediate rose 1.18 percent to 78.20 dollars, per CNBC, as the softer dollar supported the whole commodity complex into the weekend.

In energy, the gains were broad. RBOB gasoline led the complex, up 1.58 percent to 2.9849 dollars a gallon, followed by Brent and WTI, while natural gas added 1.02 percent to 2.667 dollars per million British thermal units and heating oil rose 0.58 percent to 3.9046 dollars a gallon, per CNBC. The recovery leaves Brent down about 5 percent on the week, our calculation, after the OPEC+ production decision drove Monday’s and Tuesday’s steep declines, with Thursday’s rebound and Friday’s follow-through recovering part of the ground.

In metals, the jobs report was the accelerant. Silver jumped 2.94 percent to 63.415 dollars an ounce and gold 2.15 percent to 4,392.20 dollars, per CNBC, as the weak payrolls print pulled yields lower, faded expectations of another Federal Reserve rate increase and buttressed the case for holding hard assets, while platinum rose 1.24 percent to 1,759.40 dollars and palladium 0.44 percent to 1,383.50 dollars. Copper was the complex’s only decliner, down 1.70 percent to 6.595 dollars a pound, as the soft US data raised demand questions for the industrial metal.

In agriculture, sugar was the day’s standout, surging 5.91 percent to 16.49 cents a pound, per CNBC, while coffee climbed 2.47 percent to 313.65 cents and cotton 1.47 percent to 84.38 cents. Wheat added 1.11 percent to 638.25 cents a bushel, while corn eased 0.11 percent to 461.50 cents, soybeans slipped 0.15 percent to 1,176.00 cents and cocoa fell 0.61 percent to 5,847 dollars a tonne.

In rates and currencies, the jobs report set the direction. The US dollar index fell 0.38 percent to 99.554 and the euro rose to 1.1562, per CNBC, while the 10-year Treasury yield edged down 1.4 basis points to 4.656 percent and the two-year, most sensitive to policy expectations, fell 4.4 basis points to 4.201 percent. The VIX eased 1.32 percent to 14.95 and Bitcoin rose 0.63 percent to about 64,782 dollars. The Kuwaiti dinar stood at its latest official reference of 0.3071 per dollar, with Gulf and Egyptian onshore currency markets closed for the weekend.

Why it matters: Friday’s mix is favourable for the Gulf heading into the new week, our reading. Oil’s two-day recovery trims the week’s OPEC+ driven damage to producer export revenue, and it came alongside a softer dollar rather than a supply scare, which is the healthier kind of gain. Gold and silver’s surge after the jobs shock extends a metals run that has been the standout trade of the week, and the drop in Treasury yields eases financing conditions across the region. The counterpoint sits in copper, where the only decline of the day is a reminder that a weakening US labor market can eventually become a demand story for industrial commodities and, by extension, for oil.

Outlook: The first test comes as regional markets reopen, most on Sunday and the UAE on Monday, pricing Friday’s full session, our reading. Beyond that, the market watches whether Brent can build on two days of gains and hold above the low 80s, how Federal Reserve officials frame September after the payrolls miss, and whether the metals surge extends or consolidates around gold’s 4,400 dollar level. Wednesday brings the scheduled catalysts, with July US consumer price data at 8:30 AM Eastern Time, 3:30 PM Kuwait time, and the weekly EIA inventory report, while any OPEC+ follow-through remains the wild card for crude.

Table – Energy, 7 August, ranked by change:

Table – Metals, 7 August, ranked by change:

Table – Agriculture, 7 August, ranked by change:

Table – Rates, currencies, volatility and crypto, intraday 7 August, ranked by percent change:

Sources: CNBC.

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