Commodities: Oil, base metals rise but gold falters

Gold was trading marginally lower in Europe on Monday afternoon, while oil benchmarks and selected base metal contracts began the week on a more positive footing.

Oil traders reversed some of the declines noted last week as reports suggested Russia had expressed a willingness to work with OPEC on the issue of cutting crude oil production. At 1600 BST, the Brent front-month futures contract for November delivery was up 2.47% or $1.19 at $49.31 per barrel, reversing most of Friday’s declines. Concurrently, the WTI was up 2.02% or 92 cents $46.06 per barrel.

Newswire Reuters also reported that a separate meeting was being setup between Russia and Saudi Arabia. Meanwhile, Russia’s oil production continues to rise, with output volumes hitting a fresh record high of 10.74 million barrels per day in September.

Analysts at Barclays said the wider market should be concerned about an emerging market slowdown, but the bank added that China’s strategic buying to increase its petroleum reserves as well as healthy demand from India’s growing economy was likely to support prices.

On the precious metals front, COMEX gold futures contract was down 0.08% or 90 cents at $1,135.70 an ounce, while spot gold was 0.14% or $1.63 lower at $1,136.97 an ounce.

Analysts at FXTM said there was little doubt the weak US data published in recent days will push back the country’s interest rate hike expectations and as this occurs gold will benefit from an improved sentiment.

Away from gold, COMEX silver rose 2.47% or 38 cents to $15.64 an ounce, while spot platinum was up 1.35% or $12.28 at $922.28 an ounce.

Meanwhile, selected base metal futures rose on the London Metal Exchange but declines in Asia meant a few continued to trade lower. Past the midway point of trading, LME’s three-month delivery contracts of primary aluminium (up 0.2%), copper (up 1.2%), nickel (up 0.2%) and tin (up 0.4%) were in positive territory, while lead (down 0.2%) and zinc (down 0.6%) futures were heading lower.

Finally, agricultural commodities futures were largely in positive territory. CBOT corn (up 0.13%), ICE cotton (up 2.21%) and cocoa (up 0.12%) futures were all in positive territory. However, wheat (down 0.19%) and CME live cattle (down 0.51%) headed lower.