Commodities: Gold spikes on US jobs data, oil and base metals shed gains

Oil benchmarks and base metals slumped on Friday, while gold futures recovered after a disappointing US jobs report sent the dollar tumbling.

At 1532 BST, the Brent front-month futures contract was down 1.05% or 50 cents at $47.19 per barrel. Concurrently, the WTI was down 1.12% or 50 cents to $44.24 per barrel.

While a wider emerging market downturn remains an area of concern, India’s oil demand, up 7% on an annualised basis to 242,000 bpd in the year to August, could provide a "demand-side buffer," according to analysts at Barclays.

“Furthermore, with high frequency indicators continuing to point to a further uptick in headline GDP growth, and expectations of tailwinds from monetary and fiscal policy by economists, oil demand growth in India is likely to keep the current healthy pace,” they added.

Precious metals were firmly in positive territory, as a report on US non-farm payrolls showed 142,000 jobs were added in September, comfortably below the 201,000 reading analysts had estimated. Furthermore, revisions to the prior month's data revealed 136,000 jobs were added, down from a preliminary estimate of 173,000.

Both pound sterling and the euro climbed at the greenback’s expense in wake of the report, rising 0.46% and 0.88% to change hands at $1.5201 and $1.1294 respectively, and gold duly registered an uptick as pressure from the possibility of a US interest rate rise eased.

COMEX gold futures contract was up 2.39% or $26.00 at $1,140.30 an ounce, while spot gold was 2.08% or $23.12 higher at $1,136.73 an ounce.

Away from gold markets, COMEX silver rose 3.96% or 57 cents to $15.09 an ounce, while spot platinum was 0.20% or $1.78 lower at $903.20 an ounce.

Chris Beauchamp, senior market analyst at IG said, “Gold and silver received a major boost this afternoon, as these havens came into favour as expectations of a 2015 rate hike were revised lower. It looks unlikely that (US Fed Chair) Janet Yellen will be able to push the button this year, but short of a new programme of quantitative easing, it is difficult to see how such inaction will be good for stock markets.

Meanwhile, base metal futures fell on the London Metal Exchange, with declines in Asia extending well into the European session. Past the midway point of trading, LME’s three-month delivery contracts of primary aluminium (down 2.2%), copper (down 1.8%), lead (down 0.8%), nickel (down 4.5%), tin (down 0.1%) and zinc (down 0.7%) were trading lower.

Finally, agricultural commodities futures were largely in positive territory. CBOT corn (up 0.39%), wheat (up 0.72%), CME live cattle (up 0.37%) and ICE cotton (up 0.45%) futures were all in positive territory.