Gold Down In Asia
As Fed Minutes Point More Hawkish Views On Rates - Gold prices fell in Asia on Thursday
as the Fed appeared a tad more hawkish in the December meeting minutes and
investors fretted over inflation implications. Minutes of the Fed's December
meeting showed officials expect reductions in corporate and personal taxes to
provide boosts to consumer and business spending, though they remain somewhat
unsure of how much impact the recently passed reform effort will have. The
Federal Open Market Committee increased their expectations for 2018 GDP growth
from 2.1%, or about trend since the post-financial crisis recovery, to 2.5%.
“Most participants indicated that prospective changes in federal tax policy
were a factor that led them to boost their projections of real GDP growth over
the next couple of years,” the minutes stated. While generally looking
favorably on the rising stock market indexes, some officials have expressed
concern that keeping policy overly accommodative could inflate bubbles. “In
light of elevated asset valuations and low financial market volatility, a
couple of participants expressed concern that the persistence of highly
accommodative financial conditions could, over time, pose risks to financial
stability,” the minutes said.
Base metals traded mixed; lead
gained as US frigid weather persisted - Base metals ended lower on Wednesday, while
lead gained more than 1 percent as parts of the United States braced for more
frigid weather. The peak demand period for lead, which is largely used to make
batteries, is during the height of winter when freezing temperatures cause
battery failures. Mixed signals were also emerging over the extent of China's
demand for imported industrial metals in 2018, which was dampening activity
among some local investors and leading to a broader fall on the bourse.
Optimism about Chinese demand was boosted overnight by an unexpected December
rise in manufacturing and a pickup in new orders. But higher prices for raw
materials and firms cutting staff have fuelled concerns about growth.
Oil prices hit fresh highs as market
tightens - Oil
prices on Thursday hit fresh two-and-a-half year highs and were at levels last
seen at the start of the commodity slump in 2014/2015, with markets tightening
amid tensions in Iran and due to ongoing OPEC-led production cuts. Prices were
also buoyed by Asia's stock markets, which flirted with 10-year highs on
Thursday amid strong data from leading economies including the United States,
Japan and Germany.Beyond a brief intraday spike in May, 2015, these were the
highest crude price levels since December, 2014, at the start of the oil price
downturn. Freezing weather in the United States has also spurred short-term
demand, especially for heating oil. "The market is clearly getting more
bullish on oil as inventory levels get closer to the five-year average.
Geopolitical uncertainty in Iran, OPEC's third largest producer, is also
helping to support the price as citizens are again protesting the
government," said by William O'Loughlin, investment analyst at Australia'
Rivkin Securities. Iran's elite Revolutionary Guards have deployed forces to
three provinces to put down anti-government unrest that has been ongoing for a
week, their commander said on Wednesday.
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