Commodities: Gold, oil falter in Europe, cocoa futures extend losses

At 1351 BST, COMEX gold for August delivery was down 1.08% or $11.80 at $1,082.30 an ounce, while spot gold was down 0.75% or $8.19 at $1,082.51. As the decline continued unabated, investment bank Macquarie downgraded its full-year aggregate forecast for gold to $1,152 an ounce, down from $1,310, suggesting the yellow metal could fall as low as $1,075 over the third quarter before recovering.

“Gold has always had a dual nature as a currency and a commodity. At present it is not desired in either form as the US Federal Reserve remains on course to raise rates, while physical markets are lacklustre. The price fall has been extreme – taking it to a five-year low - but might not be over yet,” the bank added.

COMEX silver was also down 1.67% or 25 cents at $14.46 an ounce, while spot platinum continued its worrying slide down shedding another 0.15% or $1.44 to $976.41 an ounce.

Industrial metals slipped firmly into negative territory with leading futures contracts trading lower on the London Metal Exchange. Past the midway point in trading, three-month contracts of primary aluminium (down 0.8%), copper (down 2.1%), lead (down 0.8%), nickel (down 0.8%), tin (down 0.3%) and zinc (down 0.9%) summed up a dire afternoon.

In particular, aluminium and copper were trading at six-year lows of $1637.50 and $5240.25 per tonne respectively.

Meanwhile, both oil benchmarks were enduring a tepid day with the WTI staying well below $50 a barrel, as ratings agency Moody’s opined that low oil prices were “here to stay.” The Brent front month contract was broadly flat, trading down 0.04% or 2 cents at $55.25 a barrel, while the WTI was up 31 cents or 0.64% at $48.76.

Elsewhere, the agricultural commodities market saw a mixed session. CME live cattle (up 0.22%) and cotton (up 0.08%) contracts were trading higher while CBOT corn (down 1.35%) and wheat (down 1.05%) were trading lower.

However, the cocoa market sell-off appeared to be more pronounced compared other agricultural contracts, with aggressive weekend profit-taking in the face of lacklustre demand. ICE cocoa for September delivery was down 1.36% or $44 at $3,197 per metric tonne.

A poll of analysts by Reuters pointed to the current oversupply stack swelling to its highest level since 2010, thereby fanning expectation of a decline of more than 8% by end of the fourth quarter of this year.