Commodities: Oil, base metals trade lower but gold up in Europe

Oil and base metal futures slid on Monday, but gold rose marginally in European trading, as prospects of a US interest rate hike receded in the view of some in the City.

Persistent oversupply concerns, despite recent assertions by the US Energy Information Administration, International Energy Agency and OPEC that North American oil production was heading for a correction, failed to support oil prices in Asian and late afternoon European trading.

At 1555 BST, the Brent front month futures contract was down 1.91% or 92 cents to $47.22 per barrel, having registered losses for much of the Asian session. WTI futures, down 0.94% or 42 cents to $44.68, were also firmly in negative territory.

Base metal futures, excepting tin (up 0.4%), were sharply lower on the London Metal Exchange yet again, with some contracts extending losses seen on Friday on fresh concerns about China.

Past the midway point of trading on the LME, three-month delivery contracts of primary aluminium (down 1.0%), copper (down 0.6%), lead (down 2.0%), nickel (down 2.4%) and zinc (down 2.1%) were in all negative territory.

Analysts at Macquarie noted: “Global car sales, a key indicator of the health of the world economy and an important consumer of many commodities, especially platinum group metals, shrank again in August. Sales were 1.0% lower year-on-year, slightly more than the 0.8% fall seen in July 2015. Looking in more detail, however, shows a few reasons to believe 2015 should end on a stronger note.”

Precious metals were largely in negative territory, but gold futures were up as many in the market remained unconvinced the US Federal Reserve would move to raise interest rates. COMEX gold for December delivery was up 0.30% or $3.30 to $1,106.60 an ounce, while spot gold was broadly flat at $1,107.08 an ounce down some 87 cents.

Concurrently, COMEX silver was down 0.62% or nine cents at $14.42 an ounce, while spot platinum was down 1.64% or $15.95 to $953.90 an ounce.

Finally, major agricultural commodities futures were in positive territory at the start of the week. CBOT corn (up 1.42%) and wheat (up 2.94%) reversed last Friday’s losses. ICE cotton (up 0.44%) and cocoa (up 0.80%) were also in positive territory.