Gold price falls, oil markets and base metals strengthen
London (May 1) Gold plummeted below the pivotal $1200 mark while Brent oil held firm just below $67 per barrel in Asian trading on Friday, as the market continued to move on sentiments entrenched earlier in the week.
The US Federal Reserve's decision, to keep its powder dry on a possible June interest rate hike earlier this week, continues to infuse general bearishness into precious metals trading.
At 07:00 BST COMEX gold for June delivery was trading down $1.20 or 0.10% at $1,181.20 an ounce. Spot gold markets mirrored downbeat sentiment with an ounce coming in at $1,182.10, down 0.19% or $2.27 following a night of retreating prices. COMEX silver could not escape wider trends as well trading down 0.14% at $16.13 an ounce.
Meanwhile, oil markets continued to strengthen in anticipation of higher demand from China, an easing of the US supply glut, and upbeat comments from Saudi Arabia's oil minister Ali Al-Naimi that his country was ready to cater to "rising demand in Asia".
The Brent front month futures contract maintained its footing just shy of the $67 per barrel at $66.80, up just a couple of cents, but at a level not seen since mid-December 2014. Elsewhere, WTI came in 0.15% or nine cents higher at $59.72.
Commenting on the trading patterns for gold and oil, Alastair McCaig, market analyst at IG, said: "The bounce in the US dollar has sent gold tumbling back down to $1180 region as a combination of currency strength and improving US jobs data have successfully stopped the latest rally in the precious metal.
"The Saudi Arabian oil minister certainly talked a good game but with the US driving season coming and the momentum building in the oil prices we might need to see that increased supply he was referring to."
Away from precious metals, the base metals market continued to strengthen in anticipation of higher emerging markets demand. Copper is currently at its highest level for the year to date with the LME three-month contract closing up $153 or 2.5% at $6284 per tonne overnight.
Concurrently, the three-month LME nickel contract jumped 4% to an intraday peak of $13,950 per tonne, before ending Thursday at $13,925. Metals traders told Sharecast the performance was the strongest for the London market since 26 March, thereby reversing nickel's recent six-year lows.
It follows BHP Billiton's declaration of a force majeure at its Cerro Matoso plant in Colombia, adding to supply concerns over nickel, as well as a weaker dollar making base metals priced in the currency cheaper for non-US bidders and contracted parties.
On the soft commodities front, CBOT corn, CME live cattle contracts were down, while ICE wheat, cocoa and cotton contracts were in positive territory