Gold gains in Asia as Fed views change, weak dollar supports - 22 Jun 2017

Commodity Intraday Tips
Gold gains in Asia as Fed views change, weak dollar supports.  
Gold prices rose in Asia on Thursday with a weaker dollar and revised views on the Fed hiking rates for a third time this year offered support. Overnight, gold prices traded above breakeven on Wednesday, as the dollar faded despite data showing that U.S. existing home sales unexpectedly rose in May while growing expectations for a rate hike later this year limited upside in the precious metal. On Tuesday, Boston Fed President Eric Rosengren said low interest rates do pose financial stability concerns that central bankers and the private sector must take seriously while Bill Dudley, head of the New York Federal Reserve, a day earlier, downplayed the recent slowdown in inflation, warning that halting rate increases at this point would be dangerous. In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interestbearing assets such as bonds.  
   
Peru Copper Output to Continue Rising in May-June, SMM Predicts.  
Peru’s copper production increased 1.6% on a yearly basis in April to 190,903 tonnes, foreign media reported. Higher output at MMG’s Las Bambas mine and Chalco’s Toromocho mine offset output declines from the strike at Cerro Verde. WBMS: World Zinc Market in Severe Deficit in January-April despite More Output. Peru’s copper output will continue growing during May-June since the strike has ended, SMM predicts.  

Chalco Cuts Aluminum Prices in Major Markets After Big Hike.  
China Aluminum International Trading Co. (Chalco Trading) lowered aluminum prices it offered in major markets today after sharp hike in previous two days.Several major alumina producers in Shandong, one of China’s main alumina and aluminum producing regions, said they have no plans to expand alumina capacity in Shandong in the future. This is because environmental protection requirements are strict and local alumina market is almost saturated, those surveyed told SMM.      

Oil prices climb off 10-month lows as U.S. stockpiles drop. 
Oil prices rose on Thursday after U.S. crude and gasoline stockpiles fell, but worries over whether OPEC-led output cuts would be able to rein in a three-year glut continued to drag. The market largely shrugged off comments overnight from Iran's oil minister that members of the Organization of Petroleum Exporting Countries (OPEC) are considering deeper cuts in production. With production rising in Nigeria and Libya, countries exempt from the deal, and output surging in the United States, which was not part of the agreement, many bulls appear to have thrown in the towel. Oil has "now fallen into 'bear' territory," ANZ said in a research note. "OPEC (and allies) may have pared back production, but that's being offset by relentless drilling in the U.S. and more output in Libya." A bigger-than-expected cut in U.S. crude stockpiles reported overnight is barely shifting the dial. 

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Oil languishes near multi-month lows on glut fears - 21 Jun 2017

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Gold gains in Asia on views for 3rd Fed hike this year.  
Gold rose in Asia on Wednesday with Fed views on rate hikes for the rest of the year in focus with some expectations that inflation is not strong enough for a third hike this year as forecast. Gold futures continued to trickle lower, as a growing number of market participants expect the Federal Reserve to raise rates by the end of the year in the wake of upbeat comments from Federal Reserve officials. On Tuesday, Boston Fed President Eric Rosengren said low interest rates do pose financial stability concerns that central bankers and the private sector must take seriously. On Monday, Bill Dudley, head of the New York Federal Reserve downplayed the recent slowdown in inflation, adding that halting rate increases at this point would be dangerous.Meanwhile, Chicago Fed President Charles Evans said on Monday it may be worthwhile for the U.S. central bank to wait until year-end to decide whether to raise interest rates again.  
   
Kazakhstan Copper, Zinc and Steel Output Skyrockets in January-May.  
Committee of Statistics under Ministry of National Economy of the Republic of Kazakhstan announced Tuesday the country’s copper cathode, zinc and steel output jumped during the first five months of this year, wenhua. com reported. Barclays: Copper Price to Fall in Back Half of 2017 on China Reason. Copper cathode, refined zinc and steel output rose 5.0%, 3.4% and 10.0%, respectively, year-on-year.   

Negative Factors Simmering behind Aluminum Rally, SMM Warns.  
Aluminum prices have made a strong comeback over the past two days, but this is no time to cheer up since negative factors are simmering, SMM warns. Aluminum stocks did not fall sharply during this year’s traditional peak-demand season because of growing supply. China Aluminum International Trading Co. (Chalco Trading) raised aluminum prices it offered in major markets further today.  
   
Oil languishes near multi-month lows on glut fears. 
Oil prices dipped on Wednesday, trading around multi-month lows as investors discounted evidence of strong compliance by OPEC and non-OPEC oil producers with a deal to cut global output. "The lack of a positive response in oil prices clearly suggests market participants are not convinced that the OPEC's efforts will help shore up prices in a meaningful way in the short-term as shale supply continues to rise in the U.S.," said Fawad Razaqzada, market analyst at futures brokerage Forex.com. "Unless we see a marked reduction in crude stockpiles, the possibility of further short term falls in the price of oil cannot be ruled out," he added. The American Petroleum Institute said on Tuesday U.S. crude stockpiles had dropped more than forecast. U.S. crude stocks fell last week, while gasoline and distillate inventories rose.   

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Barclays: Copper Price to Fall in Back Half of 2017 on China Reason.- 20 Jun 2017

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Gold points weaker in Asia on stronger dollar, Fischer awaited.
Gold pointed weaker in early Asia Tuesday on overnight gains in the dollar that make buying the greenback-denominated precious metal more expensive for key importers. Overnight, gold prices fell on Monday, weighed by an uptick in the dollar after upbeat comments on inflation from the head of the New York Federal Reserve increased expectations of a rate hike this year. Gold futures came under pressure on Monday, as Bill Dudley, head of the New York Federal Reserve, downplayed the recent slowdown in inflation, adding that halting rate increases at this point would be dangerous. In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds.
 
Barclays: Copper Price to Fall in Back Half of 2017 on China Reason.
Barclays lowered its forecast for copper prices in the second half of 2017, according to wenhua.com. Copper prices may fall to $2.50 per pound in the second half of this year due to slower demand, which is a result of tightening credit in China. India's major brass and copper scrap prices remained flat on the Scrap Register Price Index as on Thursday, while copper futures prices at India's Multi Commodity Exchange advanced slightly, after the U.S. Federal Reserve raised rates for the second time this year, boosting financing costs for industry.

Chalco Hikes Aluminum Prices Dramatically in Major Markets.China Aluminum International Trading Co. (Chalco Trading) raised aluminum prices it offered in major markets considerably today after hike in previous day.
 
Oil prices hold near seven-month lows, glut keeps dragging.
Oil markets held around seven-month lows on Tuesday as investors focused on persistent signs of rising supply that are undermining attempts by OPEC and other producers to support prices. That was their lowest since Nov. 29, the day before the Organization of the Petroleum Exporting Countries (OPEC) and other producers agreed to cut output for six months from January. "Recent data points are not encouraging," Morgan Stanley (NYSE:MS) said in a research note. "Identifiable oil inventories - both crude and product in the OECD, China and selected other nonOECD countries - increased at a rate of (about) 1 (million bpd) in 1Q." OPEC supplies jumped in May as output recovered in Libya and Nigeria, two countries exempt from the production cut agreement. Analysts said rising U.S. crude production has fed the global glut. Data on Friday showed a record 22nd consecutive week of increases in U.S. oil rig numbers..

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Gold on track to extend weekly losing streak despite dollar dip - 19 Jun 2017

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Gold on track to extend weekly losing streak despite dollar dip.  
Gold prices remained unchanged on Friday, as safe haven demand remained subdued, despite a pair of disappointing U.S. economic reports raising concerns about the outlook of U.S. economic growth in the second quarter U.S. homebuilding fell for a third straight month in May to the lowest level in eight months, suggesting that subdued housing activity could dent economic growth in the second quarter. Housing starts dropped 5.5% to a seasonally adjusted annual rate of 1.09 million units, the Commerce Department said on Friday, well below forecasts of a 4.1% increase. In a separate report the University of Michigan said its consumer sentiment gauged fell to 94.5 in early June from 91.1 in May. Analysts had expected a reading of 97.1.  Gold struggled, however, to capitalize on the slump in the dollar as investor sentiment on the precious metal remained negative, after the Federal Reserve on Wednesday signaled that an additional rate hike may be appropriate.  

Copper Will Not Get Support from Housing Market, SMM Reports.  
China’s housing market is cooling down following a series of restrictive policy, and such condition is expected to be continuing during the rest of the year. SMM Copper Demand Surprise Index: China Copper Demand to Change Little YoY in June 2017. The coolingdown of housing market, one of major copper consumers, will be gradually felt by copper market. The housing market after a strong performance in 2016 will head into a steady drop, and the copper market will also lose a big price supporter.  

NBS: China Alumina Output Jumps in May.  
National Bureau of Statistics (NBS) data showed China’s alumina output rose significantly in May. Chalco Hikes Aluminum Prices across Major Markets on June 16. Alumina production nationwide grew 19.6% year-on-year to 6.44 million tonnes in May, and surged 20.8% year-on-year to 30.9 million tonnes in the first five months of this year.  
   
Crude settles higher but posts weekly loss amid oversupply jitters. 
Crude futures settled higher on Friday, but ended the week in negative territory, as investors continued to doubt whether Opec and its allies’ global pact to curb production would stem the glut in supply amid rising U.S. output. The Baker Hughes report came after a duo of inventory updates from both Opec and the International Energy Agency earlier in the week, showing that production remained elevated while stockpiles continued to swell. Opec said Tuesday, that output from the group rose by 336,000 barrels per day in May to 32.14m barrels per day while the International Energy Agency said it expects production to grow by 700,000 bpd this year. 

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Oil sits near half-year lows as global supply overhang weighs.- 16 Jun 2017

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Gold gains slightly in Asia with focus on dollar prospects.
Gold rose slightly in Asia on Friday with sentiment subdued following the Fed rate hike and wavering fortunes for the dollar with investors focused on whether the Trump Administration can get back on track with its tax cut and stimulus policies in the face of a tense political debate over Russian interference in the 2016 election. Overnight, gold prices tumbled to three week lows on Thursday, pressured by a firmer dollar as risk-on sentiment resumed amid upbeat U.S. economic data and expectations of an additional rate hike later this year.A raft of better than expected economic reports tapered fears the US economy was set for a slowdown in the second quarter, stoking expectations of an additional rate hike, after the Federal Reserve maintained its outlook of three total rate hikes on Wednesday.

Gold gains slightly in Asia with focus on dollar prospects.
Gold rose slightly in Asia on Friday with sentiment subdued following the Fed rate hike and wavering fortunes for the dollar with investors focused on whether the Trump Administration can get back on track with its tax cut and stimulus policies in the face of a tense political debate over Russian interference in the 2016 election. Overnight, gold prices tumbled to three week lows on Thursday, pressured by a firmer dollar as risk-on sentiment resumed amid upbeat U.S. economic data and expectations of an additional rate hike later this year.A raft of better than expected economic reports tapered fears the US economy was set for a slowdown in the second quarter, stoking expectations of an additional rate hike, after the Federal Reserve maintained its outlook of three total rate hikes on Wednesday.

Chalco Hikes Aluminum Prices across Major Markets.
China Aluminum International Trading Co. (Chalco Trading) raised aluminum prices it offered in major markets across the board today. SHFE 1708 aluminum will move at lows of RMB 13,450-13,650/mt today, due to growing stocks, weakening consumption and tightening cash around mid-year.
 
Oil sits near half-year lows as global supply overhang weighs.
Oil prices dipped early on Friday and were not far off six-months lows as an ongoing supply overhang weighed on markets despite an OPEC-led effort to cut production and prop up prices.Prices for both benchmarks are down by more than 13 percent since late May, when producers led by the Organization of the Petroleum Exporting Countries (OPEC) extended a pledge to cut production by 1.8 million barrels per day (bpd) by an extra nine months until the end of the first quarter of 2018. The price falls are due to ongoing high supplies despite the pledge to cut from within OPEC, and also because of rising output from the United States.In the United States, which is not participating in any deal to hold back production, oil output has risen over 10 percent over the past year to 9.3 million bpd, and the Energy Information Administration (EIA) expects that figure to rise above 10 million bpd in 2018. In a sign of the ongoing supply overhang, traders are increasingly hiring tankers again to store unsold crude, waiting to sell later at a higher price.

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Gold dips in Asia after Fed hike, but steady dollar offers support - 15 Jun 2017

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Gold dips in Asia after Fed hike, but steady dollar offers support.  
Gold dipped in Asia as a widely expected interest rate hike by the Federal Reserve provided room for caution, but the dollar failed to respond sharply giving room for support. Overnight, Gold prices came under pressure on Wednesday, after the Federal Reserve raised interest rates for the second time this year and maintained its outlook of three total rate hikes for this year. The Federal Reserve increased its key interest rate by 0.25% to a 1.00%-1.25% range on Wednesday, and surprise investors as it maintained its outlook of three total rate hikes for 2017, despite the recent dip in job creation and inflation. The central bank said it expects that a tightening labor market will lift inflation to the 2% target over the medium term. Fed chair Janet Yellen echoed these remarks in a press conference following the rate decision. “Employment is near its maximum level and the committee expects inflation to move and stabilize around 2% over the next couple of years” Yellen said.  

The bullish comments on inflation and additional rate hikes lifted the Dollar into positive territory against a basket of global currencies, pushing the precious metal to session lows.  

SHFE Zinc to Consolidate at Highs.  
The market will continue to absorb Fed rate hike news today, weighing on LME zinc. The Bank of England’s interest rate decision will be eyed today. ILZSG reported Wednesday deficit in global zinc market expanded to 92,400 tonnes in April 2017. Supply in March is revised to 72,700 tonnes deficit, wenhua.com reported.  

LME Lead to Edge down.  
International Lead and Zinc Research Organization (ILZSG) announced on June 14 that global lead supply deficit narrowed to 6,200 tonnes in April from 53,800 tonnes seen in March. China Motive Battery Market Reports Tight Supply, and to Ease in Mid and Late June, SMM ReportsIn China’s domestic market, spot lead should trade at RMB 16,950-17,100/mt on Thursday..  
   
Oil prices struggle on doubts OPEC can rein in oversupply. 
Oil Oil prices wallowed near their lowest levels in seven months early on Thursday, hurt by high global inventories and doubts over OPEC's ability to implement production cuts.oth benchmarks are hovering near levels last reached in late November last year when production cuts led by the Petroleum Exporting Countries (OPEC) were first announced in an effort to prop up prices. "For OPEC, an oversupply headache became a migraine," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. However, some OPEC members including Nigeria and Libya have been exempt from cutting, and their rising output undermines efforts led by Saudi Arabia.   

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Gold prices unchanged as the Fed's two-day meeting kicks off - 14 Jun 2017

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Gold prices unchanged as the Fed's two-day meeting kicks off.  
Gold prices traded at break-even on Tuesday, after expectations that the Federal Reserve will increase interest rates on Wednesday weighed on gold, as the precious metal struggled to capitalise on a slump in the dollar. Gold prices traded at break-even on Tuesday, after expectations that the Federal Reserve will increase interest rates on Wednesday weighed on gold, as the precious metal struggled to capitalise on a slump in the dollar. In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to other interest-bearing assets such as bonds. Investor skepticism on the pace of rate hikes has started to grow in recent weeks amid signs of cracks in the US economy, with some analysts suggesting that Wednesday’s widely expected interest rate hike could be final hike of 2017.
“Weakness in consumption is becoming more visible due to emerging headwinds from negative wage growth in real terms, combined with falling housing affordability and tighter credit standards.”

LME Zinc to Stay Weak.
LME zinc is expected to move between USD 2,435-2,485/mt today. US annualized CPI and retail sales will be released today. Eurozone CPI and US PPI will be released today. SHFE 1708 zinc meet strong resistance from the 5- and 10-da moving average, and is expected to fluctuate between RMB 20,550-21,000/mt, with spot prices RMB 950-1,200/mt above SHFE 1707 zinc.

Chalco Cuts Aluminum Prices in Major Markets for Three Consecutive Days on June 14.
China Aluminum International Trading Co. (Chalco Trading) lowered aluminum prices it offered in major markets today for three days in a row, it said on its WeChat. SHFE 1708 aluminum will find support from rally in LME aluminum. But, poor market fundamentals will prevent prices from rising.
 
Oil prices fall on OPEC output increase, rising U.S. crude stocks.
Oil prices fell by one percent early on Wednesday after data showed a build in U.S. crude stocks and OPEC reported a rise in its production despite its pledge to cut back. The price falls came on the back of an ongoing supply glut that has pulled down crude prices by more than 10 percent since late May despite a move led by the Petroleum Exporting Countries (OPEC) to cut production by almost 1.8 million barrels per day (bpd) until the end of the first quarter of 2018. More specifically for oil, there are signs of a slowdown in China, long the key driver in fuel demand growth, as its economy slows down and refiners have produced far too much fuel for the market to consume, forcing a slowdown in activity. "Chinese demand is slow, so we have a build-up of crude in Asia where demand seems to have slowed for now," said Oystein Berentsen, managing director for oil trading company Strong Petroleum.

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