LONDON (ShareCast) – (ShareCast News) – Gold (Other OTC: GDCWF – news) joined the wider commodities market selloff on Wednesday, as safe haven demand declined on receding prospects of a US interest rate hike in September and calm returning to global equities market. At 1632 BST, COMEX gold for December delivery was down 1.46% or $ 16.60 to $ 1,121.70 an ounce, while spot gold fell 1.42% or $ 16.14 to $ 1,124.35. Much of the precious metals market followed the yellow metal downwards.
COMEX silver fell 3.97% or 58 cents to $ 14.07 an ounce, while spot platinum was down 0.02% or 22 cents to $ 977.03 an ounce.
Analysts at Macquarie noted: “Gold had regained some mojo since its July low, on favourable economic developments and a potential delay to a US Federal Reserve tightening. This was only a temporary respite and investors should remain cautious until the Fed acts.” Meanwhile, base metal futures continued to suffer during the European session. Past the midway point in trading on the London Metal Exchange, three-month delivery contracts of primary aluminium (down 1.5%), copper (down 1.4%), lead (down 1.7%), nickel (down 0.7%), tin (down 3.0%) and zinc (down 2.1%) were all in the red.
Oil benchmarks also traded lower with no immediate prospect of the existing oversupply situation and concerns over China easing up. Having stayed in negative territory for much of the Asian session, Brent was up a marginal 0.28% or 12 cents to $ 43.33 per barrel. Concurrently, the WTI was down 0.25% or 10 cents to $ 39.21 per barrel.
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Jasper Lawler, market strategist at CMC Markets, said, “US crude inventories according to the IEA saw a surprise drop in the last week but in a telling sign of weakness, WTI crude dropped towards its lows around $ 38 per barrel following the report.” “Oil’s negative response to what is a sign of slowing production is likely because the small bit of positive sentiment towards oil had already been used up following the stockpile drop reported by the API on Tuesday.” Finally, agricultural commodities market stayed in the red. CBOT corn (down 0.60%), wheat (down 1.10%), ICE cocoa (down 0.61%), cotton (down 1.27%) and CME live cattle (down 0.69%) were all trading lower.
