Gold Prices Gain in Asia As Inflation Views Debated, US Holiday Ahead - Gold prices gained in Asia on Monday with a holiday ahead in the US keeping trade light and the market awaiting more signals on inflation this year as debate grows over the extent of potential price gains globally. Financial markets in the U.S. are to remain closed for the Martin Luther King Day holiday. Later this week, China is slated to release what will be closely watched fourth-quarter growth data, while in Europe investors will await monthly inflation data to assess how fast the ECB could start unwinding its asset purchase program. Last week, gold prices rose for the third straight session on Friday to hit fresh four month highs after hawkish European Central Bank minutes boosted the euro to multi-year highs against the dollar. The euro rallied to more than three-year highs against the dollar on Friday as the single currency was boosted by hopes that the European Central Bank will begin to scale back its massive monetary stimulus program this year. A dollar-denominated commodity, gold becomes cheaper for overseas buyers when the U.S. currency weakens.
Zinc prices edged up to
supported by potential shortages and low inventories, but some investors voiced
concern about the lofty levels - Zinc on MCX settled up 0.44%
at 217.6 to supported by potential shortages and low inventories, but some
investors voiced concern about the lofty levels. Benchmark zinc on the London
Metal Exchange climbed to $3,409 a tonne, the strongest since August 2007,
before paring gains by the close to $3,383.50, up 0.1 percent. Zinc has rallied
11 percent since early December and was the top gainer among LME metals last
year, surging 32 percent. LME inventories have tumbled 58 percent over the past
12 months to 180,150 tonnes after closures and suspensions of big mines in
recent years. Production at zinc smelters in Huayuan County, Hunan province
remained suspended or restricted even though zinc prices have performed well.
Smelters in the region have been in suspension since early December due to
environmental inspections. Such activities appeared to have been ongoing,
sources said. Huayuan County is one of China’s largest regions with zinc ore
reserves. China's zinc and zinc alloy production dropped by 1.5 percent in 2017
to 4.73 million tonnes due to low processing fees, inadequate concentrate
supply and the impact of strict environmental inspections.
Oil near three-year highs on output cuts despite
rising North American rig count - Oil prices held just below December 2014 highs
on Monday, supported by ongoing output cuts led by OPEC and Russia despite a
rise in U.S. and Canadian drilling activity that points to higher future output
in North America. ANZ bank said on Monday
oil prices had recently risen "on the back of data continuing to show the
market is tightening." Oil markets have been well supported by production
cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and
Russia which are aimed at propping up crude prices. The cuts started in January
last year and are set to last through 2018, and they have coincided with healthy
demand growth, pushing up crude prices by more than 13 percent since early
December. But other factors, including political risk, have also supported
crude. "Tighter fundamentals are (the) main driver to the rally in prices,
but geopolitical risk and currency moves along with speculative money in tandem
have exacerbated the move," U.S. bank JPMorgan (NYSE:JPM) said in a note.
Attracted by tighter supplies and strong consumption, financial investors have
raised their net long U.S. crude futures positions, which would profit from
higher prices, to a new record, the U.S. Commodity Futures Trading Commission
(CFTC) said on Friday. Despite the sharp price rises since December, some
analysts have been warning of a downward correction.
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