Speculators give a boost to industrial metals prices

The performance of commodities was mixed this week. Softer Chinese activity and construction data for July did little to cool the rally in industrial metals prices whilst increasing geopolitical risks continued to buoy demand for safe havens, including gold. In contrast, oil prices fell sharply despite evidence that the market is rebalancing. Turning to next week, the focus is likely to remain on the North Korean crisis. The US and South Korea are due to carry out routine military drills starting from Monday but many fear that this could lead to an increase in tensions. This should provide some support to gold prices next week. On the data front, Markit manufacturing flash PMIs for the US and the euro-zone will be released on Wednesday and could provide some indication of the strength of those economies. On Friday, Fed Chairwoman, Janet Yellen, will speak on financial stability at the annual Jackson Hole conference.