Commodity prices which had been falling drastically in the past 4 days finally stabilised on Friday after the release of positive U.S. jobs data managed to reassure investors who had been concerned over global growth.
The US Department of Labour report helped dampen concerns by investors over the condition of the world’s largest economy. In April, Nonfarm payrolls rose the most in 11 months by 244,000 compared to 221,000 in March, and much better than the predicted 186,000.
Oil trading was very volatile today and dropped to as low as $94.63 in early European trading and then rose again up to $102.35 by 1400GMT.
Spot gold rebounded from yesterday’s low of $1462.23 to hit a session high of $1498.13.
Silver bounced off Thursday’s 33.02 to 36.42 in today’s US session.
On Friday, influential investment bank Goldman Sachs said oil could bounce back and reach recent highs again in 2012 due to supply tightness.
“It is important to emphasize that even as oil prices are pulling back from their recent highs, we expect them to return to or surpass the recent highs by next year,” the banks’ analysts reported in a research note.
Meanwhile, Sean Corrigan, chief investment strategist at Diapason Commodities Management in Switzerland commented that “From here I would expect some form of stability, trading sideways maybe, but if we break through the lows of last night I think we’re definitely looking at $90 and possibly worse.”
This correction in commodity prices is seen as a positive for the market because if prices continued to rise too fast, it would have been detrimental to the global economy as GDP growth would have been constrained.