Scoreboard: Gold gains

Higher gold, oil and base metal prices should help the local sharemarket start the week on a positive note, while new car sales data is released.

The Australian sharemarket is expected to rise modestly by around 0.1-0.2 per cent at the start of trade, underpinned by higher gold, oil and base metal prices and a flat finish on Wall Street.

In the US, retail sales rose by 0.3 per cent in October, above forecasts for a 0.2 per cent gain. Excluding gasoline and autos, retail sales rose by 0.6 per cent. Consumer sentiment rose from 86.9 in October to a 7-year high of 89.4 in November. Import prices fell 1.3 per cent in October with export prices down by 1.0 per cent.

Leaders of G20 nations have committed to lift world economic output by an additional 2.1 per cent or $US2 trillion by 2018.

European shares were mixed on Friday. Shares in Nokia fell by 5.5 per cent in response to new profit margin forecasts. Data showed the German economy grew by 0.1 per cent in the September quarter with France up 0.3 per cent. The FTSEurofirst 300 index fell by 0.2 per cent but the UK FTSE was up by 0.3 per cent and the German Dax was up by 0.1 per cent. In London trade, shares in BHP Billiton fell by 0.3 per cent while Rio Tinto lost 0.1 per cent.

US sharemarkets finished mixed on Friday. Economic data was supportive but there was weakness in healthcare. The Dow Jones was down by 18 points or 0.1 per cent but the S&P 500 index was up by less than 0.1 per cent and the Nasdaq was up by 8.4 points or 0.2 per cent. Over the week the Dow Jones and S&P 500 indexes were up by 0.4 per cent while the Nasdaq rose by 1.2 per cent.

US treasuries rose modestly on Friday (yields lower) as institutional buyers embraced US bonds in preference to equivalent European securities. US two-year yields fell by 1 point to 0.516 per cent while US 10-year yields fell by 2 points to 2.319 per cent. Over the week, US two-year yields fell by less than 1 point while US 10-year yields fell by 4 points.

The euro and commodity currencies rose against the greenback on Friday. The euro rose from lows near $US1.2400 to highs near $US1.2545, and was around $US1.2520 in late US trade. The Aussie dollar rose from lows near US86.45c to around US87.65c, and was at US87.45c in late US trade. The Japanese yen eased from near 116.00 yen per US dollar to ¥116.79 and was at ¥116.27 in late US trade.

World oil prices rose on Friday in response to a weaker US dollar and perceptions that oil had been oversold. Brent crude rose by $US1.92 or 2.5 per cent to $US79.41 a barrel while the US Nymex crude price rose by $US1.61 or 2.2 per cent to $US75.82 a barrel. Over the week, Brent crude fell by $US3.98 or 4.8 per cent while US Nymex fell by $US2.83 or 3.6 per cent.

Base metal prices rose by up to 1.2 per cent on the London Metal Exchange on Friday with nickel leading the gains. But aluminium fell by 0.9 per cent and tin lost 0.6 per cent. Over the week, metal prices were mixed. Gold surged on Friday as the US dollar slumped. Comex gold futures were up by $US24.10 an ounce or 2.1 per cent to $US1,185.60 per ounce. Over the week, gold rose by $US15.80 or 1.4 per cent.  Iron ore was unchanged at $US75.50 a tonne on Friday and was unchanged over the week.

Ahead: In Australia, new car sales data is released. In the US, industrial production data is released with the Empire State Manufacturing index.

Craig James is the chief economist at CommSec.

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