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AAP

2012-12-05

A summary of trading in key commodities markets overseas:

ENERGY

Worries over the looming "fiscal cliff" and the health of the US economy drove oil prices lower.

US lawmakers have less than a month to reach a compromise to avoid a series of sharp tax increases and spending cuts that take effect in January.

Proposals from the White House and Republicans in Congress have failed to find much common ground.

There are few details so far, but the White House estimates its plan would carve $US4.4 trillion from the deficit over the coming decade, including previously enacted cuts ($US1 trillion) and savings from reduced costs for overseas military operations ($US800 billion), as well as interest payments on the national debt ($US600 billion).

House Republicans say their plan would cut deficits by $US2.2 trillion over 10 years, but they don't claim previous cuts, war savings or interest costs toward that total.

Both plans would block automatic spending cuts set to hit the economy in January.

Benchmark crude finished down 59 cents at $US88.50 a barrel in New York.

Brent crude, which is used to price international varieties of oil, lost $US1.08 to $US109.84 on the ICE Futures exchange in London.

METALS

Uncertainty about US budget talks is also chipping away at gold prices.

Gold fell $US25.30, or 1.5 per cent, to finish at $US1,695.80 an ounce, its lowest price in a month.

The slow pace of the talks have left many investors and traders uncertain about putting money into commodities.

If the US economy slows, it could cut demand for industrial metals, oil and other raw materials.

Some traders sold gold and other commodities to book profits while others are staying out of the market as they evaluate their portfolios ahead of the end of the year.

Many investors are looking ahead to Friday when the Labor Department will release employment data for November, which should offer more clues about the strength of the economy.

Most commodities ended the day lower.

March silver fell 95.1 cents, or 2.8 per cent, to $US32.808 per ounce, March copper was essentially flat at $US3.6555 per pound, March palladium fell $US8.55 to $US682.70 per ounce and January palladium fell $US30.90 to $US1,582.90 per ounce.