Commodities: Metals tumble in Europe, oil falls on profit taking

Oil benchmarks traded lower on Friday, with industrial metals continuing in negative territory with little respite in sight for the precious metals market.

At 1502 BST, the Brent front month futures contract was down 0.99% or 53 cents $52.78 a barrel, while the WTI was down 1.63% or 79 cents $47.73 a barrel, as traders indulged in profit-taking as the weekend approached after both benchmarks posted a mini recovery mid-week following a drop in US inventories.

Meanwhile, industrial metals continued in the red, extending Asian losses well into the European session.

Past the midway point in trading on the London Metal Exchange, three-month futures contracts of primary aluminium (down 1.2%), copper (down 0.6%), lead (down 0.6%), nickel (down 0.1%) and zinc (down 1.0%). However, tin futures bucked the wider market trend rising 1.6% or $262.50 to $16,225 per metric tonne.

With the market firming up in favour of a US interest rate rise within the next couple of months, the appeared to be little respite on the horizon for the precious metals market. Spot platinum was down 0.74% or $7.30 at $982.40 an ounce with oversupply issue keeping the price level firmly below $1,000 an ounce.

COMEX silver was broadly flat at $14.80 an ounce, while COMEX gold futures contract remained lacklustre trading at $1,093 an ounce up 0.42% or $4.60. Concurrently, spot gold was trading at $1,094.65 an ounce up 0.54% or $5.89.

Dealing Manager at GoldMoney Kelly-Ann Kearsey said, “All [precious] metals are drifting somewhat, with gold floating down to close on its 2010 levels, so that will have persuaded some to profit take.”

“The markets are being completely dominated by US interest rate hike talk and, after the dollar had a slightly bumpy ride this week, it has now stabilised. This stabilisation follows news that the US economy grew at an annual rate of 2.3% in the three months to June and amid further talk from US Federal Reserve Chair, Janet Yellen, that there could still be a rate hike this year.”

Finally, the agricultural commodities market conveyed a mixed picture. CBOT wheat (up 0.86%), ICE cotton (up 1.13%) and CME live cattle (up 0.31%) contracts were up, while CBOT corn (down 0.13%) and ICE cocoa (down 0.56%).