Daily Commodity Market Strategy-22 July 2016

HIGHLIGHTS: Oil futures up slightly, face weekly decline as glut fears persist.

Gold flat to higher in Asia in light data day, attention turns to Fed.

Copper has been on a roller coaster ride so far this year, ranging between 34,800-39,100 yuan / ton in 

the first half of the year.

PRECIOUS METALS: Gold prices were nearly flat in Asia on Friday win a light regional data day with investors now looking ahead to the Federal Reserve for its views on rates following indications the U.S. economy is chugging along as expected despite Brexit.

On the Comex division of the New York Mercantile Exchange, gold for August delivery rose 0.07% to $1,331.95 a troy ounce. Silver futures for September delivery gained 0.30% to 19.875 a troy ounce.

BASE METALS: LME copper will grow to USD 4,950-5,000/mt during Asian trading hours Friday. Base metals will still see diverging trading on Friday with eyes on July manufacturing PMI from US and Europe.

Declines in the US Federal Reserve Bank of New York and Philadelphia manufacturing index for July beat market anticipation, a direct indication of falls in US July manufacturing PMI. This will drag down US dollar.

Focus will be also on the G20 finance ministers and central bank governors meeting and speeches delivered by Li Keqiang in a roundtable talk, which will influence market sentiment.

ENERGIES: Crude oil futures rose in quiet Asian trading on Friday but gains were limited following big falls in the previous session as investor’s reassessed U.S. data underlining the glut in petroleum, while Iraqi crude exports are on the rise. The global glut in oil has been easing but with huge amounts of crude being held in tanks and tankers on land and water, the rebalancing has taken longer than many expected. Iraq's oil exports are set to rise in July, according to loading data and an industry source, putting supply growth from OPEC's second-largest producer back on track after two months of declines.

Exports from southern Iraq in the first 21 days of July have averaged 3.28 million barrels per day (bpd), according to loading data tracked by Reuters and an industry source. That would be up from 3.18 million bpd in June.

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