Gold prices strained mightily to settle higher, but closed lower for the day - 22 Dec 2016

Commodity Intraday Tips

PRECIOUS METALS

Gold prices strained mightily to settle higher, but closed lower for the day as the greenback retreated from a 14-year record. Gold for February delivery, ended the day down 40 cents, a decrease of less than 0.1%, at $1,133.20 per troy ounce. The bad news follows yesterday's disappointing outcome when the precious metal endured another decline, a loss of 0.8%. Gold’s price remains weak as the DJIA plods along, attempting to reach the coveted milestone of 20,000. The market closed at a record on Tuesday, and the new highs for equities are lessening the appetite for the precious metal, which is viewed as a safe haven. The commodity has fallen 3.2% thus far this month, hemmed in by a climbing dollar and newly raised interest rates.

BASE METALS

LME copper is expected to range between USD 5,480-5,540/mt during Asian trading hours on Thursday and SHFE 1702 copper will move at RMB 44,900-45,350/mt. In China’s domestic market, spot copper should trade at discounts of RMB 220-120/mt on Thursday. A series of US’s economy data will be released on Thursday, including annual real GDP in Q3, initial jobless claim from the week ending December 16, November’s durable goods orders, November’s core PEC price index and November’s personal receipts and disbursements. Base metals fell back on Wednesday’s night trading and quickly brought the brief rebound to an end, indicating big price pressures in the market. Base metals are expected to keep weak on Thursday, SMM predicts.

ENERGIES

Oil prices nudged higher in tepid Asian trading on Thursday, supported by a weaker dollar and optimism that crude producers would abide by an agreement to curb output to prop up markets.But gains were capped by an unexpected rise in U.S. crude inventories last week and as Libya said it expected to boost output over the next few months. Russian Energy Minister Alexander Novak on Wednesday said trust between oil producing countries is important if a global deal to curtail output is to succeed.

"It is a safe assumption particularly in the early stages that OPEC and non-OPEC producers will abide by the agreement to curb output," Spooner said.  "If you look at where the biggest production cuts are coming from its largely about the Gulf states and Russia – this gives me even more comfort there will be material compliance," he said. 

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