Commodities round-up: Gold rush continues but oil down by over 3% on economic outlook

Gold futures continued to rally on Tuesday (5 July) spurred on by safe-haven demand, while oil futures slid below $50 per barrel over fears of lacklustre global demand.

At 2:23pm BST, Comex gold for August delivery was up $12.30 or 0.92% at $1,351 an ounce, with safe-haven calls also dragging silver futures higher by 1.64% or 32 cents to $19.91 an ounce.

The second successive intraday rise for both precious metals comes after data revealed 37 tonnes of gold was called in by investors last week, accelerated by the UK's vote in favour of leaving the European Union.

Nikolas Xenofontos, director of risk at easyMarkets, said: "Gold has been the winner when it comes to Brexit. It rose by more than 5% in the first two days after the referendum result and reached a high it hasn't seen since July 2014.

"What is interesting about the rise in gold is that it pushed out of a predictable price range so we may see improved highs."

Meanwhile, oil benchmarks dropped lower spooked by an uncertain economic outlook as leading commentators expressed pessimism about a speedy price recovery.

Speaking to Bloomberg TV, Ian Taylor, chief executive of Vitol, the world's largest independent oil trading firm, said: "I cannot see the oil market really roaring ahead. We still have a lot of oil in the system and it will take us considerable time to work that off.

"We probably expect demand growth to be slightly less in the second half of the year. There is a little less pull from the Far East," he said, adding that "most of the output disruptions", including those in Canada and Colombia, are beginning to "correct themselves".

At 2:47pm BST, the Brent August contract was down 3.05% or $1.53 to $48.57 per barrel, while the West Texas Intermediate was 3.43% or $1.68 lower at $47.31 per barrel with Taylor holding the view there was still a "lot of oil in the system".

Meanwhile, analysts at Barclays said the oil market was "far from immune" to the effects of the Brexit vote.

In a note to clients, they wrote: "Markets have experienced only the tip of the iceberg in terms of the impact of the UK's 'leave' vote. The slowdown in economic growth expectations will now accelerate the decline in oil demand growth expectations."

While global oil demand forecasts of the International Energy Agency (IEA) and the Organisation of Petroleum Exporting Countries (OPEC) fall from 1.2 to 1.4m barrels per day (bpd) range for 2016, Barclays has downgraded its own projection for the year to 1.1m bpd from 1.2m bpd.