Gold climbed in Asia on Wednesday, continuing a recovery from multi-month lows last week - 12 July 2017

Commodity Intraday Tips

Gold continues slow climb.  
Gold climbed in Asia on Wednesday, continuing a recovery from multi-month lows last week. Gold has been rebounding this week after stronger than expected economic data out of the U.S., a subdued inflation picture in China and a narrower than expected current account surplus in Japan. A strengthening in other commodity prices like oil and iron have also helped while political uncertainty in the U.S. has taken some of the shine off the US dollar. Investors are now looking forward to US Federal Reserve Chair Janet Yellen's testimony on monetary policy as well as U.S. data on inflation and retail sales, due out on Friday. Trade data from China on Thursday should also give markets some direction. The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has raised doubts over whether officials will be able to stick to their planned tightening path. Gold is highly sensitive to rising rates, which lift the opportunity cost of holding non-yielding assets such as bullion, while boosting the dollar.  
   
LME Copper to Stay Firm.  
Workers at Zaldivar copper mine will launch strike after voting, but this will make limited impact on supply with annual output at 50,000 mt, SMM notes. However, this strengthened market concerns on tight supply of copper ore after strikes in Peru. LME copper will stay firm on Wednesday with price range at USD 5,860-5,900/mt, and SHFE 1709 copper will fluctuate between RMB 46,900-47,400/mt on Wednesday after rallying on Tuesday’s night trading.  

LME Lead to Strengthen.   
Eyes should be on UK’s June unemployment data and eurozone’s May industrial production after seasonal adjustment, which are expected to be positive. Besides, US’s API and EIA crude oil inventory dropped again, shoring up crude oil price.  
   
US crude draws much higher than expected, reports API. 
Oil prices got a life Wednesday morning in Asia as the American Petroleum Institute (API) reported ongoing draws from U.S. stocks.The Energy Information Administration (EIA) is now expected to release its own inventory report on Wednesday evening Asia time.The U.S. Energy Information Administration said late on Tuesday that it expected 2018 crude oil output to rise to 9.9 million barrels per day (bpd) from 9.3 million bpd this year, a 570,000 bpd increase. This was down from last month's forecast 680,000 bpd year-over-year increase. Despite the slight downward revision, U.S. production is still set to break the 9.61 million bpd record from June 2015. 


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