Commodities: Oil price rise tempered by strong dollar, gold extends losses

Oil benchmarks rose in overnight trading on comments from Iran, but the rise was tempered in Asian trading on Friday on the back of a strong dollar.

Brent crude jumped 3.95% in Europe on Thursday as Iran’s supreme leader Ayatollah Khamenei cast doubts over the recently concluded nuclear negotiations, saying the country would only sign a final settlement if all sanctions imposed on it are lifted on the same day.

His comments alongside positive economy data from Germany lent support to oil prices. However, a relatively stronger dollar stunted the rise on Friday.

At 07:12 BST the Brent front month futures contract was trading up 12 cents or 0.21% at $56.69 per barrel, while the WTI was down 15 cents or 0.30% at $50.64 per barrel.

Meanwhile, speculation about a possible US interest rate rise as early as June, saw gold extend its recent losses to trade at a weekly low.

Comex gold remained below $1200 an ounce mark at $1,195.10 up by a marginal 0.13%. Overall weekly decline for the precious metal is just above 1% following a drop from Monday's high of $1224.10.

Alastair McCaig, Market Analyst, IG said: “Unlike European equities, gold always has the appearance of something labouring under the burden of gravity and any bounce just appears as an opportunity to sell.”

Considering the sustained period of ultra-low interest rates globally and the uncertainty driven by macro events that have unfolded, gold's report card for the last couple of years would read 'must do better', McCaig added.

As disruption at Chilean mines and lacklustre Chinese demand evened out sentiments to the upside and downside, copper markets stayed relatively stable.

LME 3-month contract ended Thursday's trade broadly flat at $6004 per tonne. Elsewhere, CBOT corn and wheat contracts were trading up, ICE cocoa was down while ICE cotton was up.