Metals, oil up

BASE metals on the London Metal Exchange moved higher again this week with the red metal leading the charge.

Copper for three-month delivery closed overnight at $US5530 per tonne, up 4% from last Friday's close of $5310/t.

Nickel jumped from $16,125/t on Friday to close at $16400/t overnight, while zinc closed overnight at $1699/t up from $1620/t last week.

Overnight, base metals moved slightly higher following better than expected United States housing data and surging equities.

However, an unnamed analyst from Sucden Financial told Dow Jones Newswires that despite the recent rally in commodities, the market appears to be losing a bit of momentum.

"A caveat to all this is the fact that, in spite of the dollar weakness and the positive economic data today [Thursday], the fact is that copper, zinc, lead and nickel all closed within a few dollars of last night's [Wednesday] closes," the analyst told the newswire.

Base metals have been trading lower today with LME three-month copper at $5,483/t, zinc at $1,690/t and nickel at $16,250/t.

In the meantime, spot gold closed overnight at $948.8 per ounce, up from $937/oz last Friday.

Barclays Capital FX strategists told Dow Jones that while the precious metal was well-supported by a weakening US dollar for now, the US dollar will strengthen before long.

"Beyond near-term weakness, firm jewellery demand emerging upon dips in the gold price should limit its downside to around $900 per ounce," Barclays said.

Spot gold was trading at $948.95/oz, up 0.01%, at 2pm AEST.

Meanwhile, the ongoing strong performance on Wall Street has sent US oil prices above $US66 a barrel though some analysts warned the rally was built on optimism rather than demand improvements.

Singapore's premium Tapis crude also climbed up from $US68.92/bbl on Wednesday to $US69.34/bbl.

The Energy Information Administration's weekly crude inventory report showed that crude stockpiles fell 1.8 million barrels to 342.7MMbbl last week due to lower imports while gasoline inventories increased 800,000bbl.

MF Global senior vice president of energy Andy Lebow told Dow Jones Newswires the market was struggling and there was no sign that demand would pick up.

"It's going to be hard to sustain a major rally back to the old highs above $US70," he said.