Commodities: Oil benchmarks decline, gold holds levels as base metals rout continues

Oil benchmarks were in retreat on Friday, with traders in indulging profit-taking given relatively higher pricing levels of late and the International Energy Agency raising fresh oversupply concerns.

At 0825 BST, the Brent front month futures contract was trading down 0.66% or 0.43 cents at $64.68 a barrel, while the WTI was trading 0.84% or 51 cents lower at $64.68 a barrel. In a recent report, the IEA strongly referred to the mismatch between high oil production and somewhat lacklustre demand forecast for the year ahead.

The agency saw "signs of persistent oversupply" in the oil market with record production from key OPEC members and US output not declining at as rapid a pace as forecast in some quarters.

Precious metals picture was mixed as the dollar and global stock markets rose, while better US economic data boosted sentiments in favour an interest rate hike by the Federal Reserve at some point this year.

COMEX gold for August delivery was trading marginally up by 0.22% or $2.60 at $1,183 an ounce, while spot Gold was broadly flat at $1,182.52 an ounce. Kelly-Ann Kearsey, dealing manager at GoldMoney, said the market was being run by US data.

“The greenback had somewhat of a lull earlier this week, potentially hit by World Bank and IMF warnings to the Fed not to raise interest rates before next year, but, with each set of positive data, it is likely to grow in strength,” she added.

Much of the gold selling seen this week has come out of Switzerland, with a good percentage of the buying heading east into Singapore and Hong Kong.

Kearsey said continuing talks over Greece’s debt situation has boosted safe haven support for gold, but the deadline is looming and there will have to be an outcome for this situation before the end of the month.

Elsewhere, COMEX silver for July delivery was down couple of cents or 0.16% at $15.94 an ounce, while spot platinum was down $6.34 or 0.57% at $1,102.03 an ounce.

Base metals continued to take a pounding with virtually all three-month contracts on the London Metal Exchange seeing red overnight. Primary aluminium (down 1.4%), copper (down 2.7%), lead (down 2.8%), nickel (down 1.9%), tin (down 1.6%) and zinc (down 1.8%) summed up the market mood.

Finally, on the agricultural commodities front, CBOT corn (down 0.56%), wheat (down 0.50%), ICE cocoa (down 0.99%), cotton (down 0.11%) and CME live cattle (down 0.39%) were all trading lower.