Gold down slightly in Asia on Master views, U.S. public holiday ahead. - 20 Feb 2017

Commodity Intraday Tips

Gold down slightly in Asia on Master views, U.S. public holiday ahead.  
Gold prices eased slightly in Asia on Monday after a further signal that a rate hike in March is a solid possibility in otherwise light trade with U.S. markets shut for a holiday. Gold for February delivery eased 0.37% to $1,234.555 on the Comex division of the New York Mercantile Exchange.  In the holiday shortened week ahead, the Fed is to publish the minutes of its February meeting on Wednesday, which will be scrutinized for clues on the timing of the next rate hike.  Investors will be looking to U.S. housing data in order to see whether the rise in consumer spending and inflation is translating into higher house prices and a pick-up in home sales. Markets will also be watching survey data on private sector activity in the euro zone on Tuesday. 

Why Total Copper Inventories Grow on LME, SHFE and COMEX? 
Copper inventories on the SHFE and COMEX added 89.4% and 23.68%, respectively as of the week ending February 10 from early 2017. LME copper inventories decreased 22.97% during this period. Total inventories in the three bourses increased 13.85%. Copper inventories on both LME and SHFE grew in December 2016 due mainly to release of invisible inventories, SMM said. LME copper inventories began to drop from late December, while those on the SHFE and COMEX reported continuous growth. This means overseas copper inventories flowed into China. 

“Maybe some importers overestimated domestic demand, which precipitated copper inflows to China’s warehouses,” Capital Economics Chief Commodity Economist Caroline Bain said. Some analysts said recent change in copper inventories is normal, which is similar with the same period of last year. SHFE copper inventories increased 47% while LME copper inventories fell 12% during January 8 and February 19, 2016. 

Oil prices flat line as U.S. drilling counters OPEC output cuts. 
Oil prices held steady on Monday as investors gauged whether an increase in U.S. drilling rigs and record stockpiles would undermine efforts by producers to cut output and bring the market into balance. 

"At the crux of the matter is that 90 percent OPEC compliance is being balanced by ever increasing U.S. shale production," he added. U.S. energy companies added oil rigs for a fifth consecutive week, Baker Hughes said on Friday, extending a nine-month recovery with producers encouraged by higher crude prices, which have traded mostly over $50 a barrel since late November. The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, agreed last year to cut output almost 1.8 million barrels per day (bpd) during the first half of 2017. Estimates indicate compliance with the cuts is at around 90 percent, while Reuters reported last week that OPEC could extend the pact or apply deeper cuts from July if global crude inventories fail to drop enough. 

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