Gold prices gain on Monday in Asia as the British pound fell

PRECIOUS METALS

Gold prices gain on Monday in Asia as the British pound fell on the terms of Brexit that could be outlined in a speech by Prime Minister Theresa May on Tuesday and as President-elect Donald Trump roiled markets with interviews and tweets on topics from BMW's manufacturing in mexico to cutting nuclear weapons ahead of his inauguration. Gold for February delivery rose 0.40% at $1,200.95 a troy ounce on the Comex division of the New York Mercantile Exchange. Investors will be looking ahead to Thursday’ policy announcement by the European Central bank and Chinese data on fourth quarter growth, due for release on Friday. On Monday, U.S. financial markets will be closed for Martin Luther King Day and Bank of England Governor Mark Carney is due to speak at an event in London.

BASE METALS

LME copper is expected to move at USD 5,850-5,920/mt during Asian trading hours on Monday and SHFE 1703 copper will move at RMB 47,700-48,200/mt. In China’s domestic market, spot copper should trade at discounts of RMB 150-50/mt on Monday. Market players will see a light data calendar on Monday, and eyes should be on final reading of Italy’s CPI in December 2016, European trade balance in November 2016 and Canada’s economic sentiment index as of last week.US Federal Reserve officials reached consensus on expectation over rate-hiking but the times will be discussed further. Besides, many Fed officials have intention to narrow balance sheet, tightening monetary policy, which will trigger big turbulence in market. US dollar increased slightly on January 13, but was weighed down by the moving averages. So, US dollar index will fluctuate at lows, sending base metals up. Trading will be brisk on Monday. But some metals will stage technical corrections after surging.

ENERGIES

Oil prices inched up on Monday, supported by a weaker dollar and expectations that OPEC and other producers will cut output as part of a deal to curb global oversupply. Traders said that prices were buoyed by a weakening dollar, which makes fuel purchases cheaper for countries that use other currencies domestically, potentially spurring demand. After spending much of the second half of 2016 in an upward trend, the dollar has fallen around 2.5 percent against a basket of other leading currencies (DXY) since its early-January peak. The greenback is in particular focus for international investors this week as Donald Trump is set to take office as the next U.S. president on Friday. Oil also continued to receive support from an announced crude output cut from major producers including the Organization of the Petroleum Exporting Countries (OPEC) and Russia.

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