A summary of trading in key commodities markets overseas:
ENERGY
Oil prices closed little changed Monday after a day of see-saw trade Monday as markets remained on edge over the eurozone crisis.
New York’s main contract, West Texas Intermediate (WTI) for November delivery gained 39 US cents to $US80.24.
In London, Brent North Sea crude for November ended off three cents at $US103.94. Earlier Monday, the contract slid more than two dollars to a one-month low of $101.66.
Italy’s ENI said it had resumed oil production in Libya more than six months after civil unrest brought oil and gas output in the country to a near standstill.
The company, working in partnership with Libya’s state-run oil company NOC, said that it had opened 15 wells at the Abu Attifel oil field, bringing production to 31,900 barrels a day.
Other wells will be reactivated in the coming days with the goal of creating enough volume to allow production to be transported by pipeline to the Zueitina terminal, the company said.
Shell said it had shut in 25,000 barrels per day of crude production in a southern Nigerian oil field due to spills caused by sabotage and theft.
PRECIOUS METALS
Gold tumbled two per cent in volatile trading, hit by another round of momentum selling and heavy liquidation by commodity hedge funds the day that a 21 per cent margin hike took effect.
The metal has fallen 11 per cent during its four-session sell-off, its sharpest four-day drop since February 1983.
Market watchers said big hedge funds were selling gold to cover losses in other markets, and others cited end-of-month “window dressing” by institutional investors.
Signs of deflation, as reflected by one-year lows in the yields of the Treasury Inflation-Protected Securities (TIPS), also weighed on gold, viewed as a safe haven during times of inflation.
Spot gold was down 1.8 per cent at $US1,627.29 an ounce by 3.45pm EDT (0645 AEDT). During the session, it fell more than seven per cent to a two-and-a-half-month low of $US1,534.49. The $US128 difference between the session high and low marked the largest daily price swing on record.
US gold futures for December delivery settled down $US45 at $US1,594.80 an ounce in heavy trade, with volume almost 50 per cent higher than its 30-day average.
Silver was down 1.2 per cent to $US30.68 an ounce. Silver fell as much as 16 per cent and was set for its sharpest three-day fall on record of more than 25 per cent.
On the charts, bullion’s relative strength index has fallen below 30, an area usually considered as oversold by analysts.
It traded as high as 85 a month ago, well above the overbought level of 70.
Despite Friday’s $US100 sell-off, the latest CME data showed that open interest in gold was down less than two per cent, a sign that participants might have initiated new short positions while others liquidated their long or bullish bets.
Platinum fell 3.3 per cent to $US1,552.74 an ounce, its lowest since May last year.
Palladium recovered from an earlier five-per cent fall to trade down 0.5 per cent at $US628.49 an ounce, around its lowest since last October.
BASE METALS
Copper dropped under $US7,000 a tonne in the London market for the first time in 14 months as the threat of a global recession had investors worried demand for the metal will continue to deteriorate.
Copper was down for the seventh-straight day and moving deeper into bear-market territory for the year. It is down nearly 30 per cent from its mid-February record above $US10,000.
Aluminium futures plumbed a one-year low of $US2,155 a tonne, lead tanked four per cent, zinc touched its own 14-month low, and nickel shed more than a per cent.
The complex was unable to derive much support from a rebound in equities and the rally in the euro versus the US dollar, as macro economic concerns weigh.
In Germany a gauge of business sentiment fell for a third month in a row in September and in the United States housing remained depressed.
London Stock Exchange (LME) three-month copper crumbled to a session trough at $US6,800 a tonne – its lowest since July 2010 – before recovering to end with a $US94 loss at $US7,266.
That modest recovery extended into New York trading hours, helping give the key December COMEX contract a mild 0.30-cent lift by the close to $US3.2830 per lb.
With a weaker macro picture dominating sentiment, investors were becoming more reliant on technicals, where budding signs of chart support developed on Monday.
The front-month COMEX contract topped its 200-day moving average target on the weekly charts, CitiFX analysts pointed out Monday in a note to clients.
Copper lost a bit of support from its supply side after about 4,200 workers at Freeport McMoran Copper & Gold Inc’s Indonesian mine, mainly contractors and non-union staff, returned to work, allowing some mining to resume.
