Could Have Enough Downside Momentum to Challenge
$1309.00 then $1306.60 - Gold
markets went sideways initially during the trading session on Tuesday, but as
Federal Reserve Chairman Jerome Powell suggested that the central bank was
willing to continue interest rate hikes, the US dollar picked up a bit of
steam. Gold markets fell significantly after, is coming from Federal Reserve
Chairman Jerome Powell, suggesting that the interest rate hikes would continue,
and that of course moves the value of the US dollar higher. However, this
should not be much of a surprise, so I think it’s only a matter of time before
the buyers come in and pick up value.
Copper fell on Tuesday as the dollar edged higher after Federal Reserve
Chair Jerome Powell’s debut testimony before Congress - Copper fell on Tuesday as the dollar edged
higher after Federal Reserve Chair Jerome Powell’s debut testimony before
Congress, weighing on assets priced in the U.S. currency. Markets expect the
Fed to hike interest rates three times this year, and Powell's remarks seemed
to indicate the central bank remains on a tightening path. He also said the
economy remains strong. This is Powell's first speech to Congress since taking
over as chairman in early February. He succeeded Janet Yellen, who served one
full term but was not reappointed by President Donald Trump. London Metal
Exchange copper was down 0.9 percent at $7,049 a tonne. The cost to roll
aluminium for a day hit its highest since late 2016 on Monday at $11 and
remains highly elevated at $10 a tonne. On-warrant aluminium stocks, or those not
earmarked for delivery, in London Metal Exchange warehouses fell by 23,425
tonnes to 1,085,175 tonnes, exchange data showed, pulling back from a recent
11-month high.
Oil prices Down in Asia Morning, Under Pressure From U.S. Production - Oil prices were down Wednesday morning in Asia
due to growing U.S. production and a strengthening dollar.Expectations for a
weekly build-up in U.S. crude inventories and continued increase in U.S. oil
production have brought oil prices down. Crude stockpiles rose by 933,000
barrels last week to 421.2 million barrels. U.S production has surpassed 10
million barrels per day (bpd), an increase of more than 20% since mid-2016.
International Energy Agency Executive Director Fatih Birol said on Tuesday that
the U.S. will overtake Russia as the world’s largest oil producer by 2019. In
an effort to stabilize oil markets, OPEC has been curbing output by around 1.2
million bpd since January 2017, and the deal will run until the end of 2018.
While the effort has helped somewhat to support oil prices, the U.S. has
continued to increase its oil production, filling the gap in supply created by
OPEC and thus pushing prices down. In effect, the surging production in the
U.S. is hampering OPEC attempts to ease the global oversupply.
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