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AAP

2013-02-26

A summary of trading in key commodities markets overseas:

ENERGY

Global oil prices advanced as traders took their cue from the weaker US dollar, but the market trimmed earlier gains as exit polls showed no clear winner from Italy's general election, analysts say.

Brent North Sea crude for delivery in April rose 52 cents to $US114.62 a barrel in late Monday afternoon deals in London, having earlier rallied as high as $US115.87.

New York's main contract, West Texas Intermediate (WTI) or light sweet crude for April, gained 10 US cents to $US93.23 per barrel. It had earlier jumped to $US94.46.

PRECIOUS METALS

Gold futures ended higher as investors flocked back to the yellow metal after last week's steep declines.

The most actively traded contract, for April delivery, on Monday rose $US13.80, or 0.9 per cent, to settle at $US1,586.60 a troy ounce on the Comex division of the New York Mercantile Exchange.

Gold's gains came as some investors returned to the market, looking to buy the precious metal at prices close to seven-month lows. Gold futures had fallen for four of the prior five trading sessions.

"Bargain hunters have begun to emerge, giving some stability to the gold price around $1,575 a troy ounce," analysts at ETF Securities said in a report.

But some market watchers cautioned that part of gold's recovery came as a result of options market activity. Comex March gold options expire at the end of business on Monday, with "in-the-money" contracts turning into March-delivery gold futures.

Protective put options with a strike of $US1,600 are "in the money", and will turn into bearish short positions on Tuesday.

BASE METALS

Base metals closed mostly lower in the London Metal Exchange (LME) floor trading, slipping in late afternoon trade as the euro softened versus the US dollar.

At the PM kerb close on Monday, LME three-month aluminum was down 0.6 per cent at $US2,036/ton. Nickel lost the most ground, down 1.6 per cent at $US16,700/ton.

After a strong start, the euro dropped against the greenback on Monday, trading 0.1 per cent lower on the day at $US1.31770 at 1725 GMT (0425 Tuesday AEDT).

Since base metals are priced in US dollars, they become more expensive to investors using other currencies when the dollar strengthens.

Copper held up the best of the base metals Monday, closing 0.5 per cent higher on the day at $US7,836/ton.