Gold Prices Up As China Central bank Pumps Up Liquidity, Prices Data Stable - Gold prices rose in Asia on Friday with the Chinese New Year next week expected to stoke some physical demand as the People's Bank of China released nearly CNY 2 trillion in extra liquidity on a day when prices data came in stable and other key gold buyer India witnessing a pickup on a lower tax rate for the yellow metal. Overnight, gold prices edged lower on Thursday, reaching their lowest level in around a month as the dollar firmed amid expectations of more U.S. interest rate hikes this year. Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced. A stronger U.S. dollar usually weighs on gold, as it dampens the metal's appeal as an alternative asset and makes dollar-priced commodities more expensive for holders of other currencies.
Copper extended its downtrend after another big rise of inventories highlighted the market currently has healthy supplies - Copper extended its downtrend after another big rise of inventories highlighted the market currently has healthy supplies. On-warrant copper inventories in warehouses certified by the London Metal Exchange - those not earmarked for delivery - jumped by 25,700 tonnes on Thursday and have surged by 75 percent over the past three weeks. That showed that a 12 percent rally in LME prices in December was not supported by the underlying fundamentals. China’s unwrought copper imports fell for a second straight month in January as winter restrictions on the construction sector and high domestic production rates continued to crimp demand for metal from overseas. Traders were likely to import more copper cathode to China given uncertainty over smelter feed supply as new restrictions on China’s scrap imports come into force. The December production jump defied curbs imposed on the operations of northern Chinese smelters.
Oil falls for sixth day as supply fears mount - Oil prices fell for a sixth day on Friday after Iran announced plans to boost production and U.S. crude output hit record highs, adding to concerns about a sharp rise in global supplies. The falls come amid a rout in global share markets as inflation fears grip investors.Both contracts have fallen more than 9 percent from this year's high point in late January. "Bets on further rising oil and metals prices, for example by hedge funds, have climbed to excessively bullish levels," said Carsten Menke, commodities research analyst at Swiss Bank Julius Baer.At that level, U.S. production would overtake current output in Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries.OPEC and other producers, including Russia, have cut production since January 2017 to force down global inventories, but these cuts have been offset by rising U.S. oil production.
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