Commodities: Oil, base metals slide in Europe, but gold holds firm on safe haven demand

At 1511 BST, the Brent front month futures contract was trading down 1.47% or 93 cents at $62.33 per barrel, having shed over 2.1% at one point in intraday trading. Concurrently, the WTI was lower by 1.36% or 81 cents at $58.82 a barrel.

City traders also saw the extension of Iran nuclear talks beyond the 30 June deadline, as a sign of some kind of a deal emerging which may lead to additional Iranian oil coming on to an already oversupplied oil market.

Furthermore, analysts at Barclays said increases in well productivity through high-grading and well optimisation, along with improved well economics relative to early 2015, could support US production for longer than the market is anticipating, particularly if producers work through the well backlog.

“Prices will help dictate whether drilling and completion activity picks up from present levels, but if the current rig count is maintained over the long term, sustaining production could be a struggle,” they added.

Meanwhile, base metals continued to grapple with uncertain demand from China and concerns over the macroeconomic malaise in Greece spreading to the wider continent. Past the midway point of the session on the London Metal Exchange, three-month futures contracts of primary aluminium (down 1.6%), lead (down 1.1%), nickel (down 6.4%), tin (down 2.5%) and zinc (down 1.0%) were all trading lower.

However, copper climbed to $5,773.50 per tonne up 0.5% or $29.75 continuing an uptick from the previous trading week. Meanwhile, the Greek crisis meant an uptick in safe haven demand for precious metals with gold and silver marginally improving on last Friday’s close.

COMEX gold for August delivery was trading up 0.18% or $2.10 at $1,175.30 an ounce, while spot gold was higher by a dollar or 0.08% at $1,176.46 an ounce. Additionally, COMEX silver for September delivery was up 0.04% or a cent at $15.78 an ounce, while spot platinum was broadly flat at $1,082.05

Finally, in the agricultural commodities market, key contracts were firmly in green territory. CBOT corn (up 0.96%), wheat (up 1.76%), ICE cocoa (up 0.27%) and cotton (up 0.18%) were all trading higher. However, the CME live cattle futures contract was trading marginally lower at $148.03 a pound, down five cents or 0.03% on profit taking, and the sight of limited premiums to the previous week’s cash prices.