Gold prices down in Asia as markets look ahead to Fed minutes - 22 Feb 2017

Commodity Intraday Tips

Gold prices down in Asia as markets look ahead to Fed minutes.
Gold fell in Asia on Wednesday with Fed minutes later in the day expected to set the tone for insight into chances of a March rate hike. Gold for April delivery on the Comex division of the New York Mercantile Exchange eased 0.13% to $1,237.25 a troy ounce.Overnight, Gold bounced off session lows but ultimately traded lower on Tuesday, pressured by a spike in the dollar, after two Federal Reserve policymakers hinted at a possible rate hike in March. Gold started the session on back foot, after the dollar surged to session highs, following bullish comments from two Federal Reserve policymakers. Philadelphia Fed President Patrick Harker said Monday that he would likely support an interest rate increase at the central bank’s next meeting in March should the economy continue to strengthen.

Price Warning: China Aluminum Inventories Surge by Three Times from Record Low in 2016.Inventories of aluminum ingot in China’s five major trading markets were 905,000 tons as of February 20, surging 319 percent from the record low of 216,000 tons seen on September 29, 2016, and 166 percent from the level seen in early 2017.China’s aluminum inventories dropped sharply in 2016 due mainly to following two factors. First, tumbled aluminum prices in 2015 triggered a round of inefficient capacity cuts, production reduction and suspension. According to SMM data, China’s aluminum capacity grew by 9 percent in 2016, unchanged from 2015’s, but down sharply from the growth of 18 percent in 2014. Second, a large amount of aluminum ingot was piled up in Xinjiang due to transportation disruption, another factor behind a big drop in inventories in the five trading markets.In 2016, domestic aluminum producers gradually restarted production and put online new projects with aluminum prices bouncing back, but mainly in 2H 2016, restricting contribution to total output. SMM data show that China’s aluminum output was 31.80 million tons in 2016, up 4 percent on a yearly basis, down from the growth of 10.3 percent in 2015.

Crude prices gain in Asia ahead of API figures.
Crude prices continued gains into Asia on Wednesday with sentiment upbeat ahead of industry figures on U.S. inventories. On the New York Mercantile Exchange Crude Oil Futures for March delivery rose 0.18% to $54.43 a barrel, while on London's Intercontinental Exchange, Brent gained 0.32% to $56.80 a barrel.Later on Wednesday, the American Petroleum Institute will release its estimates of crude oil supplies at the end of last week, followed on Thursday by official data from the U.S. Department of Energy.Analysts expect crude oil stocks rose 3.325 million barrels at the end of last week, while gasoline inventories are seen down 1.625 million barrels and distillates declined by 1.075 million barrels.Overnight, crude prices settled higher, after hitting a 19-month high in intraday trade, after OPEC secretary General Mohammed Barkindo, reiterated that the oil cartel was sticking to its agreement to cut production and expressed confidence that compliance would be higher in the coming months. 

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