Commodities: Gold prices continue to sink, while oil rallies

Gold prices fell again on Tuesday as investors readied themselves for more central bank moves later in the week.

Both the Bank of England and European Central Bank (ECB) will give their latest decisions on monetary policy this week.

Some in the market are concerned that easy-money policies - such as the ECB's quantitative easing programme which is set to start this week - could support the dollar and, in turn, weigh on gold.

Investors were also keeping an eye on Federal Reserve chair Janet Yellen who spoke at a New York dinner late on Tuesday while Fed officials Charles Evans, Richard Fisher and Esther George are set to speak on Wednesday.

Gold futures for April delivery receded 0.3% to $1,204.40 an ounce.

IG analyst Alastair McCaig said: “Gold continues to swing about with limited conviction, and only a close below the $1,200 level would offer conclusive proof that it has finally settled on a return to its previous negative stance.”

Meanwhile, Brent futures rose 2.8% to $61.19 at the end of Tuesday’s session, while ICE WTI futures increased 2.2% to 50.78. McCaig noted: “As the commodity moves ever closer to overbought territory, and brushes up against the 100-day moving average, there is a feeling that its time at these rarefied levels is coming to a close.”

CMC Markets analyst Jasper Lawler said: “WTI is under-performing Brent ahead of the latest crude stocks data on Wednesday expected to show another increase after last week’s record stockpile of US oil.”

Over on LME, three-month copper futures fell 1.9% to $5,825.00 a tonne on speculation that China could lower its growth forecasts this week.