A summary of trading in key commodities markets overseas:
ENERGY
Oil prices surged Monday as Greece worked to forge a new government to tackle its debt crisis and traders awaited data on world energy demand due this week.
New York’s main contract, light sweet crude for delivery in December, closed at $US95.52 a barrel, a rise of $US1.26 from Friday’s closing level.
In London, Brent North Sea oil for December soared $US2.59 to settle at $US114.56 a barrel.
Financial markets were tracking Greece, where political leaders sought on Monday to put the finishing touches to a unity government and appoint a new prime minister after a power-sharing deal to keep the country in the eurozone.
According to Greek state television NET, the main two political parties have agreed on an interim prime minister to take the crisis-hit country out of deadlock and avert a looming sovereign debt default.
Traders also awaited a slew of energy demand forecasts, starting with the US government on Tuesday, OPEC on Wednesday and the International Energy Agency on Thursday.
PRECIOUS METALS
Gold rose 1.7 per cent to a one-and-a-half-month high on technical buying as political uncertainty in Italy threatened to accellerate the euro zone’s sovereign debt crisis.
Bullion was on track for its biggest one-day gain in two weeks as buying sentiment improved after Germany’s Chancellor Angela Merkel ruled out using gold and currency reserves to boost the euro zone bailout fund.
The metal — a traditional safe haven which has recently taken to tracking riskier assets — has gained four per cent in the last five sessions. US equities on Monday were down nearly one per cent on Eurozone debt worries.
Spot gold rose to an intraday high of $US1,783.59, its highest since September 22 and up 1.7 per cent at 12.07pm EDT (0407 Tuesday AEDT).
US gold futures for December delivery gained $US29.10 to $US1,785.20.
Monday’s trading volume was on track to fall below its 30-day norm, consistent with the recent slower pace. US gold futures posted its third lowest volume in the previous session.
Also supporting was uncertainty ahead of Italy’s key parliamentary vote on budget reforms, which could test the leadership of Prime Minister Silvio Berlusconi in euro zone’s third biggest economy.
Holdings of the SPDR Gold Trust, the world’s biggest gold-backed exchange-traded fund, gained 1.513 tonnes on the day to 1,245.064 tonnes by November 4, the highest in more than a month.
Silver was up 1.9 per cent at $US34.74, platinum was rose 1.3 per cent to $US1,651.99, while palladium gained 1.3 per cent to $US659.72.
BASE METALS
Copper lost ground for a second straight day, as political and economic turmoil in Italy triggered newfound fears the Eurozone debt crisis could now threaten the region’s third largest economy.
With the exception of zinc futures, which managed to eke out a modest $US2 gain, the rest of the base metals fell as volumes slowed to a crawl and further fallout from the MF Global bankruptcy led investors to shy away from risk.
Italian Prime Minister Silvio Berlusconi defied pressure to resign in the latest twist in the euro zone debt crisis, which helped to pull down the metals and equities alike on Monday.
While Greece stole the spotlight as it teetered toward a default on its short-term debt, markets are now turning their focus toward the swelling Italian deficit.
London Metal Exchange (LME) three-month copper shed $US40 to end at $US7,825 a tonne, after dealing between $US7,719.75 and $US7,984.
Trading on the LME slowed on Monday, partly because positions of the British unit of MF Global had not been transferred to new brokers a week after the US firm filed for bankruptcy protection, traders said.
In New York, the key December COMEX contract fell 2.90 US cents to settle at $US3.5355 per lb, after moving from $US3.4905 to $US3.6535.
Futures volumes in New York also slowed, with a little more than 46,200 lots traded late, about a third below the 30-day norm, according to preliminary Thomson reuters data.
CME Group and Intercontinental Exchange Inc lowered margin requirements on some accounts in a move over the weekend to limit the fallout from the MF Global Holdings Ltd bankruptcy filing on futures markets.
Copper prices have lost more than 18 per cent since the beginning of the year, on fears about the impact on demand from Europe’s debt crisis and of slowing growth in the United States.
The latest LME data showed copper stocks held in official warehouses fell 2,525 tonnes to 415,325 tonnes, down more than 12 per cent since the start of October.
In other trades, tin eased $US50 to end at $US22,000 a tonne.
It remained underpinned by the fact that 25 smelters in the world’s largest tin exporter, Indonesia, are maintaining a self-imposed tin ingot shipping ban until the end of December.
