https://www.miningweekly.com

Global risks bolster gold, oil after Paris attacks

16th November 2015

By: Reuters

  

Font size: - +

Gold and oil edged up in nervous trading on Monday following the deadly attacks on Paris and large-scale French airstrikes in Syria, although broader commodities markets remain weak on poor fundamentals.

Gold, typically seen as a safe haven in times of heightened risk, jumped about 1% as Asian shares and US stock futures fell, while the euro skidded to a 6-1/2 month low. Oil prices edged higher, but copper slipped to a six-year low.

Multiple attacks in Paris on Friday killed more than 130 people, prompting France to launch air strikes in Syria against Islamic State, which claimed responsibility for the attacks.

"Safe-haven buying following the terrible events in Paris over the weekend has taken gold higher this morning," said MKS Group trader Sam Laughlin.

Spot gold, which had fallen for 12 of the 13 previous sessions on expectations of higher US interest rates, rose 0.9% to $1 093.40 an ounce by 0550 GMT, while US gold futures rose more than 1%.

Turnover in the most-active December Comex gold futures was unusually high with just under 3,000 lots changing hands in the first 10 minutes, equivalent to $316 million and nearly 10 times the average for that period over the past two months, according to Reuters calculations.

Heightened risk fears also boosted volumes in crude oil futures in early trading, and led to a pause in a recent run of declines.

Front-month US crude futures were trading at $40.93 a barrel at 0552 GMT, up 19 cents from their last close. Internationally traded Brent was at $44.82 a barrel, up 35 cents.

"France started to increase its participation against ISIS in Syria. This has pushed prices up only slightly, preventing the bearish momentum from continuing," said Daniel Ang of Singapore-based Phillip Futures.

Generally though, he said oil markets remained bearish due to oversupply.

The International Energy Agency (IEA) said last Friday that there was a record 3 billion barrels of crude and oil products in tanks worldwide, comparable to a months' worth of global consumption.

Other analysts also said that oil and many raw material prices would remain under pressure from fundamentals as production remains high despite slowing global economic growth, especially from China but also Japan, which slipped back into recession in the third quarter.

"Copper and crude oil prices are likely to remain under pressure short-term," ANZ bank said on Monday as copper on the London Metal Exchange slumped to its weakest since July 2009 at $4,783 a tonne before recovering slightly. Copper prices have shed a quarter of their value this year.

Edited by Reuters

Comments

The content you are trying to access is only available to subscribers.

If you are already a subscriber, you can Login Here.

If you are not a subscriber, you can subscribe now, by selecting one of the below options.

For more information or assistance, please contact us at subscriptions@creamermedia.co.za.

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION