Commodity Capsule: Brent crude oil slips; gold near 10-day high

Commodity Capsule: Oil slid from recent highs on Monday, amid escalation in Israel-Hamas fighting.

Traders hit the pause button on the market’s rally, for a reality check on the impact of the conflict.

Both oil benchmarks traded in the negative on Tuesday.

The pause in the oil rally came in the absence of estimates on how many barrels of oil produced, traded, or shipped out of the Middle East would be stranded by the latest tensions in the region.

On Monday, US crude benchmark settled up $3.59, after rising almost $4.50 at the session high to reach $87.23.

Last session, Brent closed up $3.57, after also rising nearly $4.50 at the session high to reach $89.

Gold prices hovered near a 10-day high on Tuesday, a day after posting sharp gains on increased market uncertainty due to the Middle East conflict.

Dovish remarks from top Federal Reserve officials weighed on dollar and bond yields.

Spot gold rose to $1,864/ounce, earlier hitting its highest since September 29.

Gold prices closed about 1.6 per cent higher on Monday, its biggest 1-day jump in five months.

Military clashes between Israel and the Palestinian Islamist group Hamas raised fears of a wider conflict boosting demand for safe-haven assets.

Conflict is threatening more volatility for investors, adding to uncertainty ahead of corporate earnings season and US inflation data this week.

Benchmark 10-year Treasuries made their sharpest rally in more than a month in early Asian trade.

The US dollar index retreated as Fed officials indicated that rising yields on long-term US Treasury bonds could steer the Fed from further increases in its short-term policy rate.

Copper prices in London pared early session gains on Tuesday

Earlier, the red metal rose on the back of a weaker dollar and a bullish outlook for the metal boosted risk sentiment.

LME copper rose gained as much as 0.5 per cent earlier in the session to $8,146/ton, the highest since October 2.

Copper was overwhelmingly the top bet for base metals next year at the LME Seminar in London, receiving 53% of votes in an informal poll on which the base metal is likely to have the most upside in 2024.

The dollar softened along with US interest rate expectations and a fall in Treasury yields.

Catch latest stock market updates here. For all other news related to business, politics, tech, sports and auto, visit Zeebiz.com.