Crude futures mixed as gold prices drop

Base metals rally

LONDON, Dec 1, (AFP): Commodity prices diverged this week as traders focused heavily on the outlook for the United States and whether the world’s biggest economy would fall back into recession owing to a budget impasse.

Elsewhere, investors cautiously welcomed a bailout deal for Greece that eased fears over a bankruptcy for the indebted eurozone country.

Oil: Crude futures were narrowly mixed as traders mainly tracked the US budget talks.

“Crude oil prices consolidated within the recent range... due to the mixed signals from the US about the ‘fiscal cliff’ programme and the ongoing uncertainty about the eurozone — economic conditions,” said Sucden Financial Research analyst Myrto Sokou. Lawmakers in Washington were locked in tough talks on averting the fiscal cliff of tax rises and spending cuts to come into effect on January 1, which could tip the economy back into recession.

But while Republican House Speaker John Boehner has rejected as “ridiculous” President Barack Obama’s first proposal to cut the country’s deficit, investors were broadly confident a deal would be achieved by the end of the year.

In Europe, official data published Friday showed unemployment in the eurozone hit a record high in October with more than 170,000 extra jobs lost and youth unemployment at almost 24 percent as the economy slumped into recession.

While world crude prices were being pressured by economic strains, support was being won by unrest in the oil-rich Middle East.

Oil prices briefly soared last week as violence intensified in the IsraelHamas conflict, stoking supply worries, but the market trimmed its gains in the wake of a ceasefire.

Offering price support for some time now have been tensions over major oil producer Iran. On Thursday, the UN atomic agency called for diplomatic “urgency” in the Iranian nuclear standoff, even as Tehran signalled its continued defiance of UN Security Council demands to suspend key activities.

The International Atomic Energy Agency’s latest report on Iran earlier in November showed that despite sanctions pressure, Iran had continued to expand its capacity to enrich uranium to purities of 20 percent, close to the 90 percent mark needed for a weapon.

Iran said the process was to produce nuclear medicines but Western countries and independent experts said it was producing far more enriched uranium than could be justified by Tehran’s civilian programme.

On London’s Intercontinental Exchange, Brent North Sea crude for January eased to $110.53 a barrel from $110.83.

Precious Metals: Gold prices dropped after a sharp midweek loss.

By late Friday on the London Bullion Market, gold fell to $1,726 an ounce from $1,734.50 a week earlier.

Silver rose to $34.28 an ounce from $33.41. On the London Platinum and Palladium Market, platinum gained to $1,612 an ounce from $1,584.

Palladium climbed to $685 an ounce from $657.50.

Base Metals: Prices of base, or industrial, metals rallied.

“We get the feeling that with the Greek payment issue taking a back seat for a while the risk in Europe has abated and although there is a lot of rhetoric coming from US policymakers, the market seems to feel the US will do what they have to do in the end — all of which is poten

By late Friday on the London Metal Exchange, copper for delivery in three months jumped to $7,933 a tonne from $7,770 a week earlier.

Three-month aluminium climbed to $2,080 a tonne from $1,965.

Three-month lead grew to $2,239 a tonne from $2,202.

Three-month tin increased $21,790 a tonne from $20,800.

Three-month nickel advanced to $17,200 a tonne from $16,678.

Three-month zinc gained to $2,048 a tonne from $1,959.

Cocoa: Prices fell further as industry body the International Cocoa Organization hiked its estimation for 2011-12 world cocoa output to 4.052 million tonnes from 3.962 million previously, offsetting political unrest in top producer Ivory Coast. On New York’s NYBOT-ICE exchange, cocoa for March dipped to $2,455 a tonne from $2,457 a week earlier.

Coffee: Robusta-quality coffee beans hit a 10-month low at $1,836 a tonne and Arabica a 2.5-year trough at 147.10 cents a pound on high supply expectations, before rebounding strongly on strong speculative buying. On LIFFE, Robusta for January advanced to $1,927 a tonne from $1,864 a week earlier.

Sugar: Prices headed back towards 2.5-year lows in London on prospects of large output.

On NYBOT-ICE, the price of unrefined sugar for March decreased to 19.23 US cents a pound from 19.68 cents the previous week.

Grains and Soya: Soya and wheat prices rose, while maize fell.

January-dated soyabean meal — used in animal feed — increased to $14.31 a bushel from $14.18.

Wheat for December gained to $8.51 a bushel from $8.47.

Rubber: Prices inched down on a lack of buying interest amid sluggish demand from China owing to the top rubber consumer’s slowing economic growth, dealers said.

The Malaysian Rubber Board’s benchmark SMR20 fell to 279.50 US cents a kilo from 280.65 cents the previous week.

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