Commodities: Oil, metal futures up as market bounces back

Oil benchmarks continued to make gains on Friday, following their biggest single session rise since 2009 overnight, as equities market fluctuations eased with the weekend approaching.

At 15:38 BST, the Brent front month futures contract was trading up 1.98% or 94 cents at $48.50 per barrel, while the WTI was up 2.89% or $1.23 at $43.79. Both benchmarks had largely reversed losses incurred on ‘Black Monday’ late in the European session, continuing an uptick which began earlier in Asia.

"The 10% jump in oil (overnight) should not be taken as expectation of higher demand or lower supply. It's not a coincidence that in the same week we saw the Dow crash 1,000 points and oil surge 10% in a day. Volatility is way above usual," said Jasper Lawler, analyst at CMC Markets.

With a US interest rate hike, now less than certain for September, gold led the precious metals market higher. COMEX gold for December delivery was up 1.34% or $15 at $1,137.60 an ounce, while spot gold was up 1.04% or $11.71 at $1,136.71.

Concurrently, COMEX silver rose 1.10% or 16 cents at $14.58 an ounce, while spot platinum was up 2.09% or $20.90 at $1,021.25 an ounce holding firm above the confidence boosting $1,000 level.

GoldMoney dealing manager Kelly-Ann Kearsey said, “While the gold price did hit a seven-week high, it hasn’t reacted to the stock market swings as much as we might expect. Gold was by far the most popular metal in busy buying activity, which is unusual for the holiday period.

“Silver has, to a lesser extent, also featured prominently on the buy lists, while the more industrial metals, platinum and palladium, have languished with some profit-taking on palladium.”

Analysts at Macquarie noted: “Gold has regained some mojo since its July low, on favourable economic developments and a potential delay to a US Federal Reserve tightening. However, investors should remain cautious until the Fed acts.”

Meanwhile, industrial metals appeared to be ending the week in positive territory, even though doubts over China continue to persist. Past the midway point of trading on the London Metal Exchange, three-month delivery contracts of primary aluminium (up 1.2%), copper (up 1.5%), lead (up 1.3%), nickel (up 1.0%), tin (up 3.0%) and zinc (up 3.9%) were all in positive territory by some distance.

Buoyant mood was also reflected in the agricultural futures market as well. CBOT corn futures led the field notching up 1.27% or $4.75 to $379.75 per bushel, firming up overnight in response to turmoil earlier in the week and a partial easing of macroeconomic concerns. CBOT wheat (up 0.15%), ICE cocoa (up 0.90%) and CME live cattle (up 0.79%) futures were also in positive territory.