Commodities: Oil sees another uptick, silver leads precious metals

Oil markets reversed some of the previous week’s decline on Monday, as the European session saw both Brent and WTI post upticks, while silver was seen leading the precious metals trade, as gold slipped lower with the boost from last Thursday's decision by the US Federal Reserve to hold back interest rates having subsided.

At 1625 BST, the Brent front month futures contract was up 1.94% or 92 cents to $48.39 per barrel, clawing back much of the ground lost on Friday, with WTI futures, up 2.89% or $1.29 to $45.97 per barrel, also reversing some of the previous session’s losses.

Myrto Sokou, senior analyst at Sucden Financial, said, “We expect some consolidation within the recent range in the oil market as crude oil prices have been struggling for direction following last week’s uncertainty about the latest Fed meeting.

“WTI front month futures are likely to hover around $43.50-47.50 per barrel, while immediate support holds near September’s low at $43.20 per barrel. Brent front month futures could hover within the recent range of $47-50 per barrel, holding support at the recent low of $47 per barrel in the short-term.”

Meanwhile, most base metal futures on the London Metal Exchange were in negative territory yet again. Past the midway point of trading, three month delivery contracts of primary aluminium (down 0.8%), copper (down 1.7%), lead (down 0.8%), nickel (down 0.4%) and zinc (down 1.4%) were all heading lower. Only tin, up 1.2% or $175 to $15,225 per metric tonne, escaped the carnage.

Silver led the precious metals market as gold futures and spot trades in Europe and Asia corrected at the start of the week after the yellow metal posted solid gains on Friday in wake of the Fed decision.

Following the conclusion of its two-day policy meeting on 17 September, the US central bank also lowered its estimate of the economy's potential rate of growth and noted it was monitoring "developments abroad".

COMEX gold for December delivery was down 0.58% or $6.60 to $1,131.20 an ounce, while spot gold was down 0.57% or $6.54 at $1,132.69 an ounce. Concurrently, COMEX silver was up 0.38% or six cents to $15.22 an ounce, and spot platinum fell 1.22% or $11.94 to $969.86 an ounce.

Kelly-Ann Kearsey, dealing manager at GoldMoney, said, “Obviously the announcement from the Fed last week was critical so it’s not surprising that traders were waiting to see what happened. Good indicators for the US economy led some to believe it could be the end of record low interest rates, but on the day warnings from the World Bank and others about the fragile Chinese economic situation probably had an impact on the decision.

“Our clients have retained their interest in silver, which has been the favourite metal again this week. We’ve definitely seen a lot more buying than selling across the metals, with Singapore remaining the favourite destination vault and Switzerland seeing the most sales.”

Finally, agricultural commodities futures were largely in positive territory except ICE cotton (down 0.51%). However, CBOT corn (up 0.80%), wheat (up 1.49%) ICE cocoa (up 0.04%) and CME live cattle (up 0.85%) futures were all trading higher.