Commodities: Oil, gold slip back while base metals ease off

At 07:12 BST, the Brent front month futures contract was trading down 0.25% or 16 cents at $64.75 per barrel while the WTI was down 9 cents or 0.15% at $59.16, firming up below the $60 level.

While industry data, such as the Baker Hughes rig count, continue to point to a decline in the number of operational drilling rigs stateside, empirical and anecdotal evidence also continues to emerge about US production holding steady, especially in the Eagle Ford shale plays.

Meanwhile, a relatively strong dollar boosted by sentiments on the US Federal Reserve holding off from raising interest rates until much later in 2015 weighed heavy on precious metals. Greek woes were also serving to bolster the dollar, mostly due to euro weakness.

Overnight, Greek Finance Minister Yanis Varoufakis said the country’s liquidity situation was "terribly urgent". The dollar rose 0.22% versus a basket of currencies in wake of the comments.

As a result, far from capping $1200 an ounce mark, gold retreated to $1,182.10 down a dollar or 0.10%, having fallen by as much as 0.5% at one point early on in the session. Spot gold was trading at $1,183.72 down 70 cents or 0.06%. COMEX silver was also down 8 cents or 0.8% at $16.24 an ounce.

David Madden, market analyst, IG, said gold had attracted a few traders as Greece rumbles away in the background. “The market isn't overly frightened by the Greek situation but the precious metal is still providing a safe haven to some dealers.

"The fact that gold is sub-$1200, and that there is a possibility that Greece could go bust any day now, is an indication of how thick-skinned traders have become, and if gold can’t obtain a sizeable rally right now when will it ever?"

Base metals prices also continued to ease off with the impetus provided by China’s interest rate cut and possible stimulus measures gradually tailing off. While analysts forecast further support from the China’s central bank, Commerzbank said the overtures would prove difficult to impress the base metals market, which has to an extent, already priced in stimulus measures.

On the London Metal Exchange, the copper three-month contract closed broadly flat in percentage terms overnight down a couple of dollar at $6,377.50 per tonne. Nickel closed marginally up by 0.6% at $14,320 per tonne, but zinc closed down by 1.2% or $28 at $2,319 per tonne. The latest Chinese interest rate cut, on Sunday, was the country's third in six months as its economy heads for its worst year in a quarter of a century.

Finally, agricultural commodities stateside saw further declines with the CBOT corn and wheat contracts, as well as CME cattle contract, all in the red. However, ICE cotton contract was on the up along with ICE cocoa, as the latter continues to recover ground from last week’s losses.

As with other commodities, a stronger dollar was also seen weighing on pricing sentiment for soft commodities. Concern over bird flu, and how that would play out should it escalate, was also seen contributing to the generally bearish tone.