The dislocation in oil markets took a day to spill over into other commodity markets on Tuesday with silver, gold, copper, platinum, palladium and iron ore all pushed lower by nervous traders.
In fact, there were some big falls in iron ore, copper, silver, and palladium which had been the best-performed metal up to a month or so ago.
Comex gold futures ended below $US1,700 an ounce, the lowest in nearly two weeks, as the US dollar strengthened after modest gains on Monday.
Gold for June delivery on Comex lost $US23.40, or 1.4%, to settle at $US1,687.80 an ounce, following a 0.7% gain on Monday. It was the lowest close since April 8 and traders say there seems to be growing resistance to gold staying above $US1,700 an ounce level.
May silver tumbled 73.8 cents or 4.7%. at $US14.876 an ounce, after jumping 2% in the previous session.
“Obviously, ongoing historical declines in crude oil pricing are having a deflating impact on most physical commodities,” analysts at Zaner Metals wrote in a daily note Tuesday.
“In fact, crude oil price action could become the markets primary leading indicator on the global economic outlook and therefore, ongoing spillover pressure should be expected in gold and silver.”
The US dollar was up 0.4% against a basket of a half-dozen currency rivals on the ICE US Dollar Index. The Aussie dollar eased under 63 US cents to be around 62.95 US cents.
Among other metals, Comex May copper shed 3.9% to $US2.2295 a pound. July platinum lost 4.7% to $US758.40 an ounce and June palladium fell by 10.3% to $US1,907.60 an ounce.
In Asia, global iron ore prices fell, despite the latest forecast cut by Brazilian iron ore miner, Vale.
The price of 62% Fe fines delivered to northern China fell $US3.08 or 3.5% to $US84.87.
