Gold is marooned between U.S. rates and India demand: Russell - 21 Mar 2017

Commodity Intraday Tips

Gold is marooned between U.S. rates and India demand: Russell.
It's not unusual for a financial market to be pulled in different directions simultaneously by competing influences, but what is notable for gold currently is the apparent inability of the contradictory factors to gain momentum. History and logic suggest that when the United States starts a monetary tightening cycle, gold will underperform, since as a non-yielding asset it loses out to instruments that will enjoy higher yields from the rising rates. The Federal Reserve lifted interest rates on March 15 for the second time in three months, with expectations that it will raise at least twice more this year and perhaps three times in 2018.Part of the answer may be that investors are taking a view that the rise in real yields may not be as dramatic given U.S. inflation is also on an upward trend. There also may be a U.S. dollar effect, with analysts at JP Morgan noting that it's likely that the greenback has already seen the bulk of its rally in this tightening cycle.

Peru Copper Output up 24.8% in January,  Zinc to Bounce Up as China Output Cuts Show Result, SMM Says.
Peru Energy & Mines Ministry data show the country’s copper output increased 24.8% year-on-year to 196,317 metric tonnes in January 2017, reported. The country’s copper production added 38.4% year-onyear to 2.35 million metric tonnes in 2016. Zinc prices fell below 22,000 yuan per tonne March 9 due to concerns over failure in output cut by zinc smelters. Fortunately, a large number of Chinese zinc smelters began maintenance. In addition to maintenance cycle, recent output cut is also the spirit of the meeting of some large zinc smelters in Central West China held recently.China’s refined zinc output is expected to be about 1.29 million tonnes in the first quarter of the year, up 1.4% year-on-year, SMM predicts. SMM undertook a survey of maintenance at zinc smelters during March and April, and found some smelters delayed maintenance to April. Zinc output in March is estimated to be 430,000 tonnes, while output in April should fall 1.9% on the month and down 3.9% year-on-year.

Oil prices rise on talk that OPEC could extend supply cut.
Oil prices rose early on Tuesday on expectations that an OPEC-led production cut to prop up the market could be extended, and as strong demand was seen to slowly erode a global fuel supply overhang. The Organization of the Petroleum Exporting Countries (OPEC), together with other producers including Russia, has pledged to cut its output by almost 1.8 million barrels per day (bpd) between January and June in an effort to prop up prices and rein in a global supply glut that has dogged markets for almost three years.Yet so far the cutback has not had the desired effect as compliance by involved exporters is patchy and as other producers, including the United States, have stepped up to fill the gap, resulting in crude prices falling more than 10 percent since the beginning of the year halt the decline, OPEC members increasingly favor extending the pact beyond June to balance the market, sources within the group said, although they added that this would require non-OPEC members like Russia to also step up their efforts also said that healthy oil demand would help rebalance markets and support prices.Global demand for 2017 is expected to remain healthy and surpass long-term average growth in demand of 1.2 million barrels per day by between 0.2 and 0.4 million barrels per day.

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