Commodities: Brent, copper futures drop amid trade worries and political tensions

Commodity futures came under selling pressure at the start of the week, with only precious metals and wheat managing to keep their heads above water, as investors in the States returned from the long weekend to find that the federal government shutdown was continuing and began eyeing the next phase of US-China trade talks at the end of the month.

Significantly, and also over the weekend, Reuters had reported that Washington was emphasising the need to put in place compliance mechanisms as part of any deal on trade with China.

According to two sources briefed on the ongoing trade negotiations, at least one of which was Chinese, the US wanted "periodic assessments" and claimed that it "looked like humiliation".

"But perhaps the two sides could find a way to save face for the Chinese government," it reportedly added.

As of 1923 GMT, the Bloomberg commodity index was down by 1.59% at 80.09, even as the US dollar spot index edged lower by 0.10% to 96.2410.

Front month Brent crude oil was own by 2.31% at $61.29 per barrel on the ICE.

To take note of perhaps, some market commentary took note of Russian Federation energy minister, Alexander Novak's, absence at this week's World Economic Forum in Davos, indicating that it might mean that he does not see eye-to-eye with his Saudi counterpart.

In parallel, February natural gas on NYMEX was extending the move seen during the prior session and dropping 12.26% to $3.06/MMBtu.

As an aside, overnight news surfaced of a small uprising within Venezuela's National Guard, with some analysts pointing out how protests had spread to some lower-income neighborhoods, which may indicate that the government's grip on power is loosening.

Coincidentally, also on Monday, Chinese President Xi Jinping warned regional party bosses and ministers in his country of the potential threats to the Communist Party's rule, including slow growth.

"The party is facing long-term and complex tests in terms of maintaining long-term rule, reform and opening-up, a market-driven economy, and within the external environment," Xi reportedly said, according to Bloomberg.

Most base metals - save for zinc - were also weaker on Tuesday, with three-month LME copper finishing at $5,935 per metric tonne after opening at $5,978 a tonne.

Soft commodities were also doing justice to their name, with March cocoa down by 2.64% to $2,246.0 per metric tonne.

March wheat on CBoT was the exception, tacking on 0.77% to $5.2175 per bushel.

Out on COMEX, February gold was up by 0.12% at $1,284.10/oz..