Commodities: Oil futures head sideways, gold recovers

Oil futures stayed within the $32-34 per barrel range on Friday, as conflicting market chatter about possible production cuts loomed large over proceedings for a second successive session, while precious metal futures gained some ground following tepid US economic data.

The Brent front-month oil futures contract was up 1.15% or 39 cents to $34.28 per barrel, while WTI was down 0.09% or three cents to $33.19 per barrel at 1712 GMT.

Russian energy minister Alexander Novak told Bloomberg TV that a decision to cut output must include all exporting nations. He added that Saudi Arabia had not approached Russia to discuss the subject since November 2015.

Headline base metal futures returned to positive territory on the London Metal Exchange. During late afternoon trading, three-month futures contracts of copper (up 1.2%), lead (up 3.5%), nickel (up 0.3%), tin (up 3.8%) and zinc (up 2.9%) headed higher.

Liz Grant, senior account executive at Sucden Financial, said, “Tin spiked higher during the London morning following reports from China that the Government was prepared to lend cash to producers to enable stockpiling between 20k and 30k mt of the metal, which is a huge tonnage in that market.

“Overall, LME prices were again quietly steady with most trading in similar range to the previous session but in pretty meagre turnover.”

Precious metals saw safe haven demand uptick yet again as tepid US data sent expectations for another rate hike by the Federal Reserve lower. Preliminary data from the country’s Commerce Department showed gross domestic product growth slowed sharply in the fourth quarter to an annualised rate of 0.7% from 2% in the third, preliminary data from the Commerce Department showed.

This was weaker than the 0.8% expected by economists. The Commerce Department said it reflected a deceleration in personal consumption expenditure and downturns in non-residential investment, exports, and state and local government spending that were partly offset by a smaller decrease in private inventory investment, a slowdown in imports and an up-tick in federal government spending.

On the COMEX, the front-month gold futures contract was up 0.11% or $1.10 to $1,117.10 an ounce, while spot gold was 0.10% or $1.15 higher at $1,116.48 an ounce. COMEX silver rose 0.27% or four cents to $14.27 an ounce, while spot platinum rose 0.92% or $7.95 to $865.38 an ounce.

Finally, agricultural commodity futures were on a mixed patch. CBOT corn (up 1.03%) and wheat (up 0.64%) futures headed higher, but CME live cattle (down 0.32%), ICE cocoa (down 0.81%) and cotton (up 0.81%) bucked the trend in early trading calls stateside.