Gold settle flat on an expectation of higher interest
rates, but downside seen limited by safe-haven buying after the sudden
dismissal of U.S. Secretary of State Rex Tillerson - Gold on MCX settled up 0.09% at
30405 held steady in the range while sentiments improved after the release of
mixed U.S. economic reports and as investors remained cautious after the sudden
firing of U.S. Secretary of State Rex Tillerson. From the data point the U.S.
Commerce Department reported on Wednesday that retail sales fell 0.1% in
February, compared to expectations for a 0.3% rise Rising inflation could add
pressure on the Fed to speed up its rate rises, which could lift the dollar,
though strangle the stock market. Gold, in turn, although negatively affected
by higher interest rates, could attract hedging demand against too-hot
inflation. The impact of trade policy has also served as a backdrop to recent
trading. Tillerson will be replaced by CIA Director Mike Pompeo. Investors also
remained cautious after Trump announced plans to impose tariffs on up to $60
billion of Chinese imports, specifically targeting the technology and
telecommunications sectors.
Copper prices gained as support seen from expectations
of stronger demand in top consumer China - Copper on MCX settled up 0.73% at 454.25 as
support seen from expectations of stronger demand in top consumer China. Prices
were supported by news of industrial action at First Quantum’s Cobre Panama
project, “which has reduced the level of work being performed on the project”.
The workers in the largest union at Antofagasta Plc’s Los Pelambres copper mine
rejected an offer for a new labour contract, paving the way for striking
action. Workers and the company would still have to go through a meditation
process with the government to reach a second deal. Strong demand from the
growing electric economy could be undermined by supply disruptions if wage
contracts can’t be negotiated across the major producer. Also China’s lower
copper imports in February weakened the sentiment on copper.
Oil Prices Stable On Healthy Demand But Oversupply Looms - Oil prices were mostly flat on Thursday morning
in Asia, held steady by healthy global demand but capped by the ongoing surge
in U.S. production.Prices were supported by healthy demand. The Organization of
the Petroleum Exporting Countries (OPEC) said on Wednesday that oil consumption
was expected to grow by 1.62 million barrels per day (bpd) in 2018. But
overshadowing this market optimism is the relentless increase in U.S. crude
output, which hit another record last week by climbing to 10.38 million bpd, up
by more than 23% since mid-2016. Commercial crude rose by 5 million barrels, at
430.93 million barrels. U.S. crude production has already topped that of top
exporter Saudi Arabia, and by late 2018 is expected to surpass 11 million bpd,
overtaking top producer Russia.
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