HIGH LIGHT
Oil drops as investors lock in gains; surprise U.S. stockpile build.
Gold edges up in Asia as investors await China trade data.
Goldman Sachs Joins Base Metal Bulls.
PRECIOUS METAL
Gold rose slightly in Asia on Wednesday with possible China trade data on the deck to set the tone. China is expected to report trade data with a surplus balance of $46.64 billion seen, with imports down 4.1% in June year-on-year and exports down 5.0%.
On the Comex division of the New York Mercantile Exchange, gold for August delivery rose 0.15% to $1,337.35 a troy ounce. Overnight, gold fell sharply in broad risk-on trade, as the Dow Jones Industrial Average surged to an all-time intraday high on Tuesday morning, dampening the precious metal's demand as a safe-haven asset.
Meanwhile, Federal Reserve Bank of St. Louis president James Bullard reiterated his position that current economic conditions deem it appropriate for the U.S. central bank to raise short-term rates only once over the next two years.
BASE METAL
Goldman Sachs on Monday raised its outlook for zinc, aluminum and nickel prices anticipating supply inequalities to continue across the metals sphere throughout the second half of the year. “In our view, the impact of the prior stimulus is still set to result in sufficient demand growth such that we will continue to see supply differentiation across the metals space during the second half of 2016,” the bank said in a note to investors.
LME copper will hold firm and range USD 4,850-4,910/mt during Asian trading hours Wednesday.
ENERGIES
Crude futures fell on Wednesday as investors locked in gains after oil prices surged nearly 5 percent in the previous session, partly on forecasts from the U.S. government and OPEC that demand would increase next year.
Oil prices were also under pressure from industry data that showed a surprise build in U.S. crude stocks, price gains in other commodities including gold and a stronger U.S. dollar which gained against a basket of currencies analysts said.
The American Petroleum Institute on Tuesday said U.S. crude inventories rose by 2.2 million barrels in the week to July 8 to 523.1 million barrels, compared with analysts' expectations for a decrease of 3 million barrels.
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