Commodities: Oil, gold futures rally corrects as weekend approaches

A marginal recovery in oil prices cooled late on Friday, as US traders appeared to book profits on an uptick seen earlier in the session.

News of another meeting between OPEC and non-OPEC oil producers appeared to strengthen Brent and WTI prices late in European session, but the rally did not extend further into the US afternoon.

Commenting on oil production levels, analysts at Barclays opined that liquidity tightening might be key component driving non-OPEC producers to scale back operations, conserve capital, and focus on only their most productive acreage.

“Additionally, despite the temptation to draw similarities to the 1980s, there are important differences as well. We cannot help but think that Russia and OPEC members’ strategy to freeze oil production is just another way that they can ‘play it by ear’, to quote former Saudi Oil Minister Yamani in 1986,” they added.

At 1929 GMT, Brent was down 0.57% or 20 cents to $35.09 per barrel, while WTI was 0.97% or 32 cents lower at $32.75 per barrel

Precious metals were also on negative turf as the dollar strengthened on positive US GDP data. The COMEX front-month gold futures contract fell 1.19% or $14.70 to $1,224.10 an ounce, while spot gold fell 0.65% or $8.01 to $1,224.90 an ounce. COMEX silver fell a massive 3.09% or 47 cents to $14.73 an ounce, while spot platinum also fell 1.29% or $11.92 to $914.63 an ounce.

However, headline base metal futures ended the week in the green on the London Metal Exchange. At 1635 GMT, three-month futures contracts of nickel (up 0.3%), zinc (up 1.1%), lead (up 1.9%), tin (up 0.6%), copper (up 1.8%) and primary aluminium (up 0.4%) traded higher.

Liz Grant, senior account executive at Sucden Financial, said, “LME prices were quietly steady, edging higher with oil and supported to a degree by falls in LME stocks. Volume through the morning was thin. On the US open, copper finally broke clear of $4,700 which triggered a wave of large buy stops that took out the resistance at $4,720 and $4,750 before finally stalling at $4,770 area.”

“LME closes were all up and turnover on copper was high at circa 31k lots in choppy nervous conditions.”

Finally, headline agricultural commodity futures were firmly on negative turf. CBOT corn (down 0.09%), wheat (down 0.22%), ICE cotton (down 0.40%), cocoa (down 2.00%) and CME live cattle (down 0.11%) futures headed lower in afternoon trading calls stateside.