Commodities: Defensive gold ahead on US tensions with N.Korea and over Syria

Gold is trading more than 1% higher as investors embrace its safe-haven status on rising tensions between the US and North Korea, and in relation to its recent air strike in Syria.

At about 15:18 GMT, on Comex, gold was up 1.08% to $1267.40 an ounce. Silver rose 1.23% to $18.14 an ounce, and copper shed 0.13% to 260.05 cents a pound.

Henry Croft, research analyst at Accendo Markets, said geopolitical uncertainty surrounding Syria and North Korea remains at the fore, buoying safe havens gold and the yen.

US President Donald Trump has said on Twitter that North Korea was "looking for trouble" and warned that the US would "solve the problem," either with or without China's help.

Trump's guileless rejoinder came after Pyonyang promised a strong reaction if the US dared to opt for a military action, warning of "catastrophic consequences". This adds to existing concerns surrounding North Korea's testing of ballistic missiles.

Meanwhile, diplomatic relations between the US and Russia remained taught over a recent US missile strike on an airbase in Syria linked to the alleged use of chemical weapons in that country's civil war.

The dollar was also under pressure, falling against both sterling and the euro as gold nipped higher. Wall St indices were moderately lower.

"Its (Wall St's) decline seems to be inspired by the global tensions sparked by Trump's unravelling relationship with Russia (and Syria. And North Korea)," said Connor Campbell, financial analyst at Spreadex.

On London Metals Exchange, three-month industrial metals were mostly lower. Zinc fell 2.68%, aluminum lost 1.81%, copper dropped 1.49% and tin rose 0.17%.

To take note of, analysts at Capital Economics called attention to the general drawdown of metals' stocks over the past month, with those of tin the main exception as they dropped nearly 25% during the last four weeks, reflecting constrained supply.

Analysts diverge on outlook for oil prices

At about 15:18 GMT, Nymex-priced WTI crude was down 0.24% to $52.95 a barrel. Intercontinental Exchange-traded Brent was down 0.38% to $55.77 a barrel. Gains earlier in the session were driven by production outages in Libya and Canada.

"From a technical standpoint, for the (WTI) upside to continue towards $55, a solid breakout and daily close above $53 will be needed," said FXTM research analyst Lukman Otunuga.

"Although the incredible rebound in oil (of late) has somewhat turned prices bullish on the daily charts, the lingering oversupply concerns may cap upside gains in the medium to longer term," said Otunuga.

For their part, analysts at Barclays trimmed their Brent price forecasts for 2017 and 2018; more significantly, they slashed their price assumption for 2019 and beyond from $70 a barrel to $60.

For the near-term, analysts at Energy Aspects told clients that Asian demand might weaken in coming months. Yet by the end of June almost 5.0m barrels a day of refining capacity was due to come on-line again, ensuring markets would feel the pinch from 1.4m b/d in OPEC and non-OPEC cuts, "even accounting for a rapid expansion of US production".

A $56.0 per barrel price forecast for Brent in 2017 from Barclays was not far below the $61 expected at Energy Aspects.

However, the latter expected Brent to trade at $68 in the last quarter of 2017 and at $98 in 2019.

Ric Spooner, chief market analyst at CMC Markets in Sydney, told Reuters he would not be surprised to see a bit of book squaring going on now, ahead of the US inventory data.

The market awaited weekly US stores reports from the industry's American Petroleum Institute later on Tuesday, and from the government's Energy Information Administration on Wednesday.

Also due on Tuesday was Opec's March oil report, which followed the cartel's end-of-2016 production pledges in the face of a global supply glut.