Commodities: Selling abates in iron ore futures, gold lower

A rebound in prices for some industrial metals, in the energy space and for soft commodities helped buoy the wider complex on Wednesday.

As of 1556 GMT Bloomberg's commodity index was inching higher by 0.11% to 85.44 even as the US dollar spot index rose 0.22% to 99.72.

Helping to stabilise sentiment, spot iron futures were higher in Chinese trading overnight, rising from $61.2 a metric tonne to $63.2 a tonne.

Gold futures were also lower once again, slipping 0.88% to trade at $1,282.70/oz. on COMEX.

That prompted Michael Hewson, chief market analyst at CMC Markets to say: "Gold prices have slipped back from the peaks seen earlier this week, as doubts about the reflation trade ebb a little, however the downside is likely to remain limited, while the US dollar remains weak and geopolitical concerns remain elevated, ahead of the French elections and events on the Korean peninsula."

In parallel, futures for copper, perhaps one of the most widely-followed industrial metals were higher, with the July 2017 COMEX contract rising 0.33% to $2.5490 a pound.

Commentary from analysts however was decidedly mixed.

In an update on the industrial metals space, Capital Economics told clients that the prospect for tighter policy in China over the course of 2017 implied weaker demand for steel was on the horizon in coming months.

The economists expected the impact of measures from Beijing to clamp down on speculators in the property market to become more evident in data releases over the next couple of months.

On a somewhat more positive note, HSBC pushed its 2017 forecast for the price of copper higher by 3% to $2.59 a pound.

However, the biggest revisions to the broker's price forecasts were for aluminium and hard coking coal.

The analysts raised their forecast for the former by 10% to 83 US cents a pound and for coal by 14% to $200 a tonne.

Futures for the main agricultural commodities were also holding higher, with July 2017 CBoT corn up by 0.20% to $3.69 a bushel, while ICE-traded Cotton#2 was advancing by 0.28% to 78 cents a pound.

WTI oil futures were drifting lower by 0.31% to $52.25 despite the release of official US data showing a 1.0m barrel drawdown in commercial stockpiles over the week ending on 14 April.