FED:
All eyes are focused on the U.S. Federal Reserve and Bank of Japan
policy decisions scheduled for Wednesday.
Those looking for a December rate hike are hoping the Fed delivers
a “hawkish” tone in its statement. The general feeling is that if Fed Chair
Janet Yellen wants to guide the market for a rate hike later this year, she’s
going to have to be more specific in her assessment of the economy, rather than
just saying the decision will be data dependent.
The consensus says the Fed will leave rates unchanged in
September. This news will be bullish for gold.
BANK OF JAPAN:
The BOJ is expected to be more aggressive than the Fed. There is
speculation the central bank may take interest rates deeper into negative
territory. There is some controversy over this possible decision, however. Many
traders feel that since lowering rates into negative territory in January
hasn’t worked then why do it again?
Oil and metal
producers nevertheless remain supported and markets are going optimistic into
this week's key central bank decisions.
Gold could rally if the BOJ lowers negative interest rates
further. Gold traders like negative rates because it makes the precious
metal a more attractive investment.
CRUDE OIL:
Members of the Organization of Petroleum Exporting Countries
(OPEC) had about 1.1 million barrels a day of spare production capacity last
month.
Angola pumped more that summer, while Saudi Arabia increased its
own production by 1.35 million barrels a day.
ALUMINIUM:
China Aluminum International Trading Co.
(Chalco Trading) further cut aluminum prices it offered in major markets today
after big cut in previous day, it said on its WeChat.
LME aluminum will
move between USD 1,570-1,590/mt today, with support at the 5-day and 10-day
moving averages.
LEAD:
LME lead should range between USD 1,940-1,960/mt on Tuesday and
SHFE 1611 lead will move at RMB 14,350-14,550/mt.
ZINC:
China Zinc Product Output Slid 2.8% in August but to Rise in
September.
NICKEL:
Philippines is likely to suspend more Nickel mine operations as
it does not meet environmental standards. The country may suspend at least 10
more mines, said minister in charge of mining to Reuters.
The country had already suspended operations of 10 mines of
which eight of them are nickel producers.
The suspension of mines are due to environmental lapses and 30
more mines are still operating in the country, Reuters report said.
Philippines
is the world's top supplier of nickel
ore and the suspensions would disrupt supply of nickel ore not only
to China but to other markets as well. The mining suspensions are resulting in
the surge of prices globally.
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