A summary of trading in key commodities markets overseas:
ENERGY
Oil prices rallied on Tuesday in volatile, low-volume trade, with sentiment supported by the weaker dollar even as weak new consumer data emerged from the US and the eurozone.
New York’s main contract, West Texas Intermediate (WTI) for October delivery, rose $US1.63 to close at $US88.90 a barrel.
Brent North Sea for delivery in October leaped $US2.14 to settle at $US114.02 a barrel.
The market moved amid promises from Libya that oil production would be ratcheted up soon, and the release of minutes from the August 9 meeting of the US Federal Reserve that showed the central bank mulling actions to boost the economy.
Also in the mix was Sunoco’s shutting down its Philadelphia refinery due to the power cuts forced by Hurricane Irene — which could tighten US petrol supplies.
In earlier choppy deals, the oil market slid on the back of falling stock markets and the stronger dollar.
Oil traders meanwhile shrugged off news of tumbling consumer confidence in both the eurozone and the United States.
PRECIOUS
Gold rose two per cent, boosted by weak US consumer confidence data, euro zone debt fears and a call by the Chicago Federal Reserve’s president for further action to help the US economy.
Gold accellerated gains early after Chicago Fed President Charles Evans told CNBC television he backs “some of the most aggressive policy actions” being considered by the Fed, adding the labour market looks to be in a recession.
A weaker-than-expected report on euro zone economic sentiment and renewed debt fears on Greece and Europe also boosted bullion buying.
Bullion has gained as much as eight per cent in the last three sessions, supported after Fed Chairman Ben Bernanke last Friday raised hopes for a new market stimulus program.
Spot gold was up 2.7 per cent at $US1,835.19 an ounce by 2.38pm EDT (0438 AEST). Gold fell more than one per cent last week, when investors stripped more than $US200 off the price after it hit a record $US1,911.76 on August 23.
US gold futures for December delivery settled up $US38.20 at $US1,829.80 an ounce. Trading volume was modest but below the record levels logged last week.
Silver rose 1.6 per cent to $US41.44 an ounce.
Gold added slightly to gains after minutes from the Fed’s August 9 meeting showed the central bank considered a range of actions to help the US economy, including the unprecedented step of tying the interest rate policy outlook to a specific unemployment level.
Physical demand for gold is holding firm, and buying is expected to pick up in top consumer India, where the wedding season, traditionally the period of highest bullion demand, gets under way in September.
Among platinum group metals, platinum was last up 1.9 per cent at $US1,852 an ounce, and palladium rose nearly three per cent to $US772.25 an ounce.
BASE
Copper ended with a one-per cent gain, as a sharp drop-off in Chilean output in July and a prospective strike at a major Indonesian mine placed further strain on an already-tight supply/demand balance.
Gains registered across the wider base complex, with lead futures leading the charge with a three-per cent surge. Zinc shot up 1.7 per cent and nickel and aluminium were each up two per cent.
The rallies bucked a wave of risk aversion in the broader market, where concerns over Greece’s debt problems sparked renewed losses in the euro and crumbling consumer confidence in the United States capped earlier gains on Wall Street.
London Metal Exchange (LME) three-month copper firmed $US85 or about one per cent to finish at $US9,160 per tonne, easing back from an earlier-session peak at $US9,225, its priciest since August 5.
Prices of the red metal shot up after a report showed production from Chile, which provides around a third of the world’s copper, produced 373,498 tonnes in July, down 18 per cent from the same month last year, and down more than 50,000 tonnes from June.
A market deficit of 343,150 tonnes is expected this year, according to median Reuters poll of 24 analysts.
Supply threats were also in focus as workers at Freeport-McMoRan Copper & Gold’s Grasberg mine in Indonesia plan to stage a strike in coming days after talks with the company failed to resolve a pay dispute.
US money managers showed some signs of doubt in the copper market, switching to a net short position in COMEX copper in the industrial metal for the first time since October 2009, data showed on Friday.
August’s commodity sell-off, that saw copper tumble more than 12 per cent, coincided with an increase in Spanish and Italian bond yields which undermined confidence in European bank balance sheets and pressured liquidity, causing liquidation across asset classes, said Credit Suisse Private Banking in a note.
Lead climbed $US73 to end at $US2,558 a tonne, supported by technical buying after pushing through resistance at the 100- and 200-day moving averages.
