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AAP

2012-12-06

A summary of trading in key commodities markets overseas:

ENERGY

World oil prices dipped, reversing earlier gains on the back of the rebounding US dollar and the latest crude inventories report from top consumer the United States, dealers said.

Brent North Sea crude for January fell 76 cents to $US109.07 per barrel in early evening deals in London.

New York's main contract, light sweet crude for delivery in January, shed 41 cents to $US88.09 a barrel.

Traders took their cue from the stronger greenback, which makes dollar-priced crude more expensive for buyers using weaker currencies. That tends to dent oil demand and lower prices.

In addition, the US government's Energy Information Administration (EIA) said in a key report that US crude oil reserves had slumped by 2.4 million barrels in the week ending November 30.

BASE METALS

Base metals closed mostly higher on the London Metal Exchange Wednesday but lacked clear direction as investors faced a set of mixed macro signals.

At the PM kerb close, LME three-month copper was up 0.6 per cent at $US8,075 a metric ton while aluminum rose 0.5 per cent at $US2,105/ton. Tin, however, closed down 0.3 per cent at $US21,745/ton.

The boost provided to base metal prices early in the session by a pledge from China's new leaders to increase urbanisation and construction of public housing ran out of steam.

A strong US dollar also exerted some downward pressure on the metals, which are priced in US dollars and are therefore more expensive to other currency holders when the US dollar gains.

PRECIOUS METALS

Gold futures eased to a one-month low after a day of indecisive trading, as persistent worries about potential shifts in US tax policy and a cut in Goldman Sachs's gold-price forecast pushed traders to the sidelines.

The most actively traded gold contract, for February delivery, fell $US2, or 0.1 per cent, to settle at $US1,693.80 a troy ounce on the Comex division of the New York Mercantile Exchange, the lowest settlement price since November 5.

Goldman Sachs on Wednesday cut its 12-month gold price forecast by 7.2 per cent to $US1,800 a troy ounce.

While the metal may rally in early 2013 should the Federal Reserve further ease monetary policy, a growing US economy and a slow but gradual rise in real interest rates may send speculators to other markets afterward, pressuring prices, they said.