Commodities: Metals lower in European trading, gold remains lacklustre

The European metals market took another turn for the worse on Friday, while oil benchmarks remained on a rocky patch and gold stayed in lacklustre mode.

Past the midway point in trading on the London Metal Exchange, most three-month base metal delivery contracts, except primary aluminium (up 0.3%), were seen registering declines. Copper (down 0.6%), lead (down 0.6%), nickel (down 0.4%), tin (down 1.5%) and zinc (down 0.4%) were all trading lower.

Meanwhile, ahead of US nonfarm payroll data, and pointers the figures could provide on when the Federal Reserve might move to raise US interest rates, left the precious metals looking dull. At 1350 BST, COMEX gold for December delivery had barely moved from earlier levels, trading up a mere $1.20 or 0.11% at $1,091.30 an ounce, while spot gold was down $5.46 or 0.50% at $1,084.09 an ounce.

COMEX silver was up seven cents or 0.50% at $14.75 an ounce, while misery in the platinum market continued as spot prices slid further to $947.18 an ounce, down $4.62 or 0.49%.

Kelly-Ann Kearsey, dealing manager at GoldMoney, said, “Investors might be attracted to some higher yielding options, but, with the current gold and silver prices, some customers have decided to add to their portfolio for wealth preservation.

“In the current circumstances, I can’t see the market taking any real direction until we’ve got the first rate rise out the way which is the primary obsession. Once we’re at that point, inflationary fears will come into play again.”

Kearsey noted that while safe haven buying had not been in evidence recently, the fact that the Greek debt situation has not yet been resolved could also present some opportunities for turbulence and a “return to some safe haven tactics.”

Elsewhere, the oil market saw another rocky session with mild volatility in the Asian session continuing well into the European afternoon. The Brent front month futures contract was trading down 42 cents or 0.85% at $49.10 a barrel, while WTI was down 19 cents or 0.43% at $44.47 as oversupply and concerns over China remain entrenched.

Finally, the agricultural futures market saw another mixed session. CBOT corn contract was broadly flat, while CBOT wheat (down 0.39%) and CME live cattle (up 0.46%) were trading higher. However, ICE cocoa and cotton futures slipped into negative territory trading down 0.52% and 0.50% respectively.