Gold-Mining Giants Benefit From Rebound in Bullion Prices - 20 Mar 2017

Commodity Intraday Tips

Gold-Mining Giants Benefit From Rebound in Bullion Prices.
Gold mining majors swung back into positive territory last week, as shares recovered on a dovish Federal Reserve announcement. Following a four-week slump, gold miners including Barrick Gold Corp, Newmont Mining, and Gold Fields Ltd all saw positive momentum. The Bloomberg Intelligence (BI) Global Senior Gold Valuation Peer Group — a basket of 15 producers — was up 6.5% this past week, marking the biggest uptick since the end of December, Bloomberg reported.  Leading the weekly gains, was Johannesburg-based Gold Fields Ltd., up 15% this past week, the biggest jump since February 2016.

“The old rule of thumb was that three rate hikes by the Fed would lead to a stumble in financial markets. But the fact that rates are starting at such a low level, as well as Yellen’s hand-holding and relatively mild remarks, kept markets on an even keel following this cycle’s third rate move. We look for two more rate hikes this year, and a similar muted market response,”

SHFE Nickel to Meet Pressure.
Market players will see a light economic data calendar on Monday and US dollar index will move at lows. The Philippines’ two nickel mines of DMCI are expected to be closed down, which is one of the 10 mine closures last year. The mines are waiting for litigation outcome. It is learned that the government allows mines to keep operation during litigation, weighed down SHFE 1705 nickel. LME nickel will meet strong pressure at the 10-day moving average on Monday and SHFE 1705 nickel will move at RMB 84,000-85,600/mt.

Nickel ore inventories at seven major Chinese ports were down 190,000 tones’ last week, according to SMM data. This week, medium and high-grade nickel ore prices for spot and future delivery are expected to rise due to strong buying interest, SMM foresees. But, price gains will be small given lack of rising strength in the high-grade NPI market.

Oil prices drop on rise in U.S. drilling.
Oil prices fell on Monday as rising U.S. drilling activity and steady supplies from OPEC countries despite touted production cuts pressured already-bloated markets. Traders said that prices were under pressure due to rising U.S. drilling activity and ongoing high supplies by the Organization of the Petroleum Exporting Countries (OPEC) despite its pledge to cut output by almost 1.8 million barrels per day (bpd) together with some other producers like Russia. oil has attempted to break out of the trading range that formed last year ... However, this uptrend has stalled," futures brokerage CMC Markets said in a note on Monday. "Now there is good, strong momentum to the downside."

U.S. drillers added 14 oil rigs in the week to March 17, bringing the total count up to 631, the most since September 2015, energy services firm Baker Hughes Inc BHI.N said on Friday, extending a recovery that is expected to boost shale production by the most in six-months in April.  "The cuts in OPEC production from the start of 2017 should start to show up between mid-March (now) and mid-April.  Over the coming weeks we expect a sharp reduction in imports and increase in refining runs which should lead to impressive crude inventory draws," analysts at AB Bernstein said on Monday in a note to clients.

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