AAP
A round up of trading on commodity markets:
ENERGY
after a sharply negative US housing report heightened concerns about weak demand in the world's largest oil-consuming nation.
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A falling dollar helped pare hefty price losses as demand picked up for dollar-priced crude.
New York's main contract, light sweet crude for June, closed at $US96.91 a barrel, down 46 cents from Monday.
In London, Brent North Sea crude for delivery in July slid $2.74 to settle at $US109.99 a barrel on the first day of trade on the benchmark contract.
The benchmark New York futures contract fell to $95.02 a barrel before rebounding thanks to a decline in the dollar against the euro amid European Union talks about the Greek debt crisis.
PRECIOUS METALS
Gold fell for a third straight session on Tuesday as weak US factory and housing data combined with disappointing corporate earnings TO trigger fund liquidation.
Investors questioned the metal's ability to extend its decade-long rally after regulatory filings showed billionaire financier George Soros dumped almost his entire $800 million stake in bullion investment in the first quarter.
Technical selling dragged gold prices after the metal breached major trend line support, and looked set to test below a 50-day average which it had held for the past two months.
Spot gold fell 0.4 per cent to $1,482.60 an ounce by 3:02 pm EDT (1902 GMT). US gold futures for June delivery settled down $10.60 at $1,480 an ounce.
Silver gained 0.7 per cent to $33.80 an ounce. It was now 32 per cent below a sharp rally to a record high of $49.51 an ounce set on April 28.
US futures activity was quieter than usual, with both gold and silver slightly below their 30-day norms, reversing a trend of heavier volume during recent sell-offs.
Gold handed back its initial gains after a rally in the dollar exacerbated a sell-off in an already-fragile commodity complex and overshadowed the euro zone debt crisis which had propped the metal.
CBOE gold volatility index, a measure of bullion investor anxiety, has eased to 17 since hitting a 5 1/2 month peak in early May, but still remains close to its highest levels this year, meaning the price is tending to react more violently than usual to external forces.
Holdings of the world's largest silver-backed exchange-traded fund, New York's iShares Silver Trust, fell another 51 tonnes on Monday. The fund has seen outflows of 570 tonnes since silver's pullback from record highs began in earnest in late April.
Platinum Week in London entered its second day, after the launch of refiner Johnson Matthey's awaited report on the platinum group metals' market fundamentals on Monday.
Among platinum group metals, platinum rose 0.5 per cent to $1,759.99 an ounce, while palladium was up 1.4 per cent at $717.50.
INDUSTRIAL METALS
Copper ended down for the first time in four sessions on Tuesday, pressured by a firmer dollar and disappointing data that raised further doubts about the global economic recovery.
Copper, with the rest of the base metals complex, weakened in tandem with declines in the precious metals, energy and equity markets, as the broader weakness in macro-economic sentiment led investors to further reduce their appetite for risk.
London Metal Exchange (LME) benchmark copper shed $41 to end at $8,799 a tonne. In New York, prices managed to eke out modest gains by the close, with the July COMEX contract ending at $3.9985 per lb, up 0.80 cent on the day.
Prices were well within reach of their recent lows. Last week they fell to their lowest in more than five months at $8,504.50 per tonne and $3.8535 per lb, and now stand some 12 per cent below record highs of $10,190 and $4.6535 in February.
LME copper stocks rose by 500 tonnes to 467,575 tonnes but cancelled warrants - metal tagged for removal from warehouses - are trending up in Asia.
Shanghai copper stocks have dropped by around 40 per cent since mid-March, while the price differential between the LME and Shanghai Futures Exchange narrowed in May.
Even with signs of tightening in place, global copper production is set to rise in the next two years, leading to a surplus which will pressure prices in 2013.
The price to roll an LME aluminium short position for tomorrow/next day delivery shot up to $7 on Tuesday, its highest since mid-March, reflecting an absence of available metal for delivery on the May third-Wednesday prime prompt date.
It later eased to $2.97.
Financing deals are estimated to have tied up about 70 per cent of record high LME aluminium stocks above 4.70 million tonnes.
Aluminium fell to a two-month low at $2,500 per tonne, before ending the day down $46 at $2,501.
Tin dropped to its lowest since January at $27,400 a tonne. It was untraded at the close, but bid at $27,875.
(Source: http://news.smh.com.au/breaking-news-business/crude-oil-prices-fall-20110518-1eruy.html)
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