Commodities: Oil recovers, gold jumps to seven-week high

Oil market benchmarks staged a recovery following declines in pre-Easter trading on the back of Iranian nuclear talks ending in a settlement. It is thought that Iran has 40m barrels of crude oil in storage ready for international sale when permitted.

However, Tuesday trading in Asia reinforced the perception that it will take longer than anticipated for additional Iranian crude to join the global supply pool. At 07:12 BST, the Brent front month futures contract was trading down 1.00% or 56 cents at $57.56 per barrel, while the WTI was down 0.84% or 44 cents at $51.70.

Both benchmarks shed $3 on average last Thursday following news of an agreed framework between Iran and international powers for Tehran to curtail its nuclear activity in exchange for relief from international sanctions.

Meanwhile, analysts at Barclays have opined that perceptions about China providing support to oil prices seems to be premature. Analyst Chi Zhang noted: “China's oil demand growth in January and February appears healthy compared to 2014, but this is because demand in early 2014 actually declined in year-on-year terms. The country's oil demand faces significant headwinds, and we think hopes that China will provide strong support to the global oil market are premature.“

Away from oil markets, gold jumped to a seven-week high after US jobs rose at their slowest pace in more than a year, giving rise to speculation the US Federal Reserve could postpone an anticipated interest rate rise. Non-farm payrolls rose by 126,000 in March; the smallest gain since December 2013.

It led US gold for June delivery to settle up $17.70 or 1.5% at $1,218.60 an ounce. Meanwhile, Dubai gold is trading up 1.2% at $1215.00 at 07:44 on Tuesday. Spot silver is up 0.26 per cent at $17.05 per ounce.

Elsewhere, LME Copper three-month contract ended Monday trading down 0.6% or at $5980 per metric tonne. Wider base metals commentary will resume from Wednesday. On the soft commodities front, CBOT Corn and Wheat contract for May, as well as ICE Cocoa and Cotton were trading in the green on Tuesday.