Gold and copper prices dipped in Asia on Friday despite upbeat trade data

PRECIOUS METALS

Gold and copper prices dipped in Asia on Friday despite upbeat trade data out of China that showed the industrial metal on the upswing. Gold for February delivery on the Comex division of the New York Mercantile Exchange fell 0.54% to $1,193.35 a troy ounce. In sparse remarks, Federal Reserve Chair Janet Yellen on Thursday said she has no major worries for the U.S. economy over the short term. The labor market is "strong," wage growth is "beginning to pick up," and inflation is a little below the Fed's 2% target "but pretty close," she told a group of economics teachers in Washington, D.C. on Thursday evening. Overnight, gold prices rallied to a seven-week high on Thursday on dollar weakness. The Fed had indicated in December that at least three rate increases were in the offing for 2017, according to a forecast of interest rates from members of the central bank, known as the dot-plot.

BASE METALS

Utilization rates at major domestic copper tube/pipe producers grew in December both on a monthly and yearly basis, SMM latest survey finds. The average operating rate was 77.31 percent in December, up 0.36 percentage points year-on-year and 0.62 percentage point’s month-on-month, according to SMM survey. SMM attributes the rise to rate mainly to high demand in a traditionally busy production season. In December, domestic air-conditioning manufacturers stepped up production as traders showed higher stockpiling demand due to seasonal factor and price rise expectations after surging prices of raw materials since November. Moreover, the fallback in copper market in December also encouraged copper tube/pipe producers to build up stocks.

ENERGIES

Oil prices were steady on Friday, supported by reports on details of OPEC output cuts, although lingering doubts over producer compliance with supply reduction targets weighed on the market.Traders said that prices received some support from statements from top crude exporter Saudi Arabia that its output had fallen below 10 million barrels per day (bpd), a level last seen in February 2015.That would also mean that the kingdom has cut production more than the 486,000 bpd it agreed to late last year under a global deal to curb production and stem a fall in oil prices. However, hard evidence of deep supply reductions to customers has yet to emerge two weeks into January, when the planned cuts by the Organization of the Petroleum Exporting Countries (OPEC) and other producers like Russia are supposed to take effect.

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