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AAP

2012-12-19

A summary of trading in key commodities markets overseas:

ENERGY

Oil prices have rallied as hopes grew of a US deal to avert a "fiscal cliff" of tax hikes and spending cuts in the United States - the world's biggest consumer of crude - analysts said.

New York's main contract, light sweet crude for delivery in January, climbed 79 cents to $US87.99 ($A83.77) a barrel.

Brent North Sea crude for February jumped $1.16 to $108.80 a barrel in late London deals.

PRECIOUS METALS

Gold prices sunk to their lowest level in three months as pessimism over the US fiscal-cliff negotiations pushed prices below a key technical level, triggering a wave of selling.

Initially trading near unchanged, gold prices retrenched after House Speaker John Boehner said he was working on a back-up plan should US budget deficit talks with President Barack Obama fall through.

The most actively traded gold futures contract, for February delivery, settled down $US27.50, or 1.6 per cent at $US1,670.70 a troy ounce, the lowest settlement since August 30.

Gold prices continued to make losses in electronic trading, after the Comex floor closed for the day, with the February contract touching a low of $US1,662.00 a troy ounce.

March delivery silver closed at $31.669, down 61.1 cents; January platinum finished at $1,593.70, down $14.80; and March palladium ended at $690.95, down $7.35.

BASE METALS

Base metals have closed mixed on the London Metal Exchange (LME), propped up to a certain extent by hopes for a US fiscal cliff resolution, but struggling to make much headway in quiet, end-of-year trade.

At the PM kerb close on Tuesday, LME three-month nickel was leading the complex, up 1.1 per cent at $US17,795 a metric ton. However, flagship copper was weaker, down 0.5 per cent at $US8,024/ton.

Markets took some comfort Tuesday from signs that US policy makers may be coming closer to a resolution on the fiscal cliff, which is a series of tax increases and spending cuts slated to start from January 1.