Commodities: Brent tests $45-level as oil futures plummet, gold rallies

Oil markets took a battering on Friday, as Chinese data further exacerbated bearish sentiment, while gold rallied on safe haven even though rest of the precious metals market plummeted.

China’s Caixin/Markit flash manufacturing PMI for August fell to 47.1, its lowest level since 2009. The news weighed heavily on commodities prices, especially oil, as currencies of natural resources exporters took a tumble in Asia.

Past 1631 BST on Friday, the Brent front month futures contract was down 2.79% or $1.30 to $45.32 per barrel, while the WTI was down 2.59% or $1.07 to $40.25 with Chinese data weighing on sentiment.

Much of the precious metals market was down except gold. COMEX gold for December delivery was up 0.42% or $4.90 at $1,158.10 an ounce, while spot gold was up 0.76% or $8.73 at $1.160.93.

GoldMoney dealing manager Kelly-Ann Kearsey said: “The US Federal Reserve’s caution with regard to when it might put up interest rates has hit the dollar this week, and that combined with the continued economic woes in China has pushed investors towards the safe haven of gold in particular."

“We know that whenever we see a boost in the gold price customers tend to start taking more interest in the metal again and look to buy in as part of the upward trend.”

However, COMEX silver was down 1.40% or 22 cents at $15.30 an ounce, while spot platinum was down 0.46% or $4.70 at $1,027.53 an ounce.

Meanwhile, base metals registered heavy declines following Chinese PMI data. At 1635 BST, three-month delivery contracts of primary aluminium (down 1.5%), copper (down 0.9%), lead (down 1.7%), nickel (down 2.5%) tin (down 2.9%) and zinc (down 3.3%) were all trading lower.

Finally, agricultural commodities slipped into the red with CBOT corn (down 1.05%), wheat (down 1.76%), ICE cocoa (down 1.91%), cotton (down 0.18%) and CME live cattle (down 1.11%) contracts trading lower.