Dovish central bank policy expectations, especially in case of the Federal Reserve, are putting a considerable downward pressure on the Dollar.
Sliding American currency resulted in a rally for precious metals on Friday. Gold and silver booked another trading session with a positive change of more than 1%.
All commodities except precious metals turned red on Thursday, with daily losses led by energy components. Natural gas plunged by 3.24%, as futures continued to trend lower after the US Energy Information Administration said natural gas supplies tumbled during the last week of January.
Plummeting US Dollar was supporting completely all commodities throughout the whole trading session on Wednesday.
Only corn and gold posted some green movement yesterday, by adding 0.34% and 0.05%, accordingly. Silver ended the session in the red territory, but losses were largely limited at 0.3%.
Ignoring the fact of a declining US Dollar, energy commodities plummeted more than enough over Monday's trading session.
Friday was a green day for all commodities that are included in our daily review. Even precious metals avoided a decrease in prices, by growing 0.1% for silver and 0.3% for gold. Stock markets and oil prices were supported by the Bank of Japan's interest rate decision.
Thursday market session was another bullish one for energy prices. Crude and Brent oil climbed by around 2-3% throughout the day, following speculations that Russia and OPEC countries may join forces in order to curb production and push prices to the upside.
Commodity prices continued to benefit from growing risk appetite on Wednesday. Continuous speculations about the possibility of Russian-OPEC cooperation to cut oil production were positively reflected in oil prices.
Commodities used to grow in price on Tuesday, as political news provided some positive ground for gains. Brent and Crude oil surged by 3.7-4.3%, as several oil-producing countries announced they are ready to work together, in order to effectively cut production and find equilibrium between supply and demand.
Markets are questioning ability of the Federal Reserve to raise interest rates four times in 2016, as policymakers had indicated they were planning to do it earlier in December.
Oil prices posted an unbelievable climb on Friday, by rallying the most in many months on the back of anticipated support from central banks.
Central bankers took the centre stage on Thursday and predominantly drove the commodity market alone. ECB President Mario Draghi generated high daily returns for oil, equities and commodity-linked currencies yesterday, while the gains are prolonged through Friday as well.
It seems that volatility in global markets is going to persist for some period of time. Yesterday equities undertook a setback from some stabilisation that has taken place earlier this week.
Two major types of oil and two main precious metals moved in different directions on Tuesday, which is usually a rare event for the commodity market.
Commodities hovered in green on Monday and particular gains were in place for energy components. Natural gas surged by 2.5%, while oil prices recovered moderately with daily increases of 0.8-2% depending on the type of the crude.
Oil prices crashed by around 6% on Friday of the week ended January 15. Worries over Chinese economic growth and oversupply are currently the main anchors for prices of energy.
In spite of rising oil prices on Thursday, this energy component is set to book a weekly loss due to sharp downward price changes earlier during the January 11-15 time period.
As the American Dollar weakened by the end of trading session on Wednesday, precious metals managed to capitalise on this development.
Despite cold winter temperatures, natural gas prices are ticking lower on day-to-day basis. Yesterday futures dropped by 5.8% amid burgeoning inventories and record-high pumping in the US.
Precious metals' prices bounced back on Monday, following gains which had been posted earlier at the end of last week. However, silver and gold lost only 0.5% and 0.9%, accordingly.
Some positive trading on global equity markets used to be a negative sign for precious metals on Friday of the previous week.
Precious metals enjoyed a turmoil occurred in the equity markets across the globe on Thursday. Worldwide stocks extended a decline, which began on Monday of this week, with major American indices dipping down by 5% in just four trading days.
Divergence between precious metals and oil is observed every single day this week. This time the Dollar is not the main driver for commodities, meaning pure fundamental factors are driving each separate component.