Commodities: Crude tumbles on Gaza ceasefire hopes

LONDON (ShareCast) - Crude oil futures fell nearly three per cent on Tuesday on reports that Israel and Hamas were close to reaching a truce deal after several days of fierce fighting.

Crude for January delivery dropped $2.53 to $86.75 a barrel on the New York Mercantile Exchange after reports suggested an imminent ceasefire on Tuesday.

Tuesday's drop follows gains of almost 4% since Monday. Oil prices had risen earlier in the week on concern that the conflict in the Middle East could spread into other neighbouring countries.

Focus also turned to upcoming weekly supply data with analysts expecting figures by the Energy Information Administration to show supplies rose again last week by 800,000 barrels.

On the ICE futures exchange Brent crude oil fell $1.87 to $109.83 a barrel.

Among precious metals gold nursed losses of 0.6% on Tuesday as the stronger dollar kept buyers at bay.

Gold for December delivery dropped $10.80 to settle at $1,723.60 an ounce on Comex division of the New York Mercantile Exchange.

Platinum for January delivery lost $10.80 to $1,573 an ounce while December palladium declined $6.95 to $638.35 an ounce.