Gold weaker in Asia after Moody's downgrade of China - 24 May 2017

Commodity Intraday Tips
Gold weaker in Asia after Moody's downgrade of China.  
Gold dipped in Asia on Wednesday after Moody's Investors Service on Wednesday downgraded China's credit rating to A1 from Aa3, changing its outlook to stable from negative, citing expectations that China's financial strength will erode somewhat over the coming years. Investors look ahead to the release of the Federal Reserve’s minutes for its April meeting on Wednesday, to gauge whether the Fed’s outlook concerning monetary policy has been impacted by recent economic data and geopolitical developments.   In a separate report on Tuesday, the Commerce Department said sales of newly constructed homes fell in April to a seasonally adjusted annual rate of 569,000. That was below analysts’ estimates of a drop to 610,000.

Zinc futures climb 1.15% on rise in Chinese imports.
Zinc futures rose over 1 per cent during evening trade in the domestic market on Tuesday as investors and speculators extended their positions in the industrial metal after imports of the metals into top consumer China rose underlining a tightening supply situation. According to the customs data refined zinc imports to China in April grew by 21 per cent to 47469 tonnes y-o-y while shipments of ore and concentrates jumped 44 per cent.

Nickel futures in reverse gear.
Nickel futures were trading lower during evening trade in the domestic market on Tuesday as investors and speculators exited their positions in the industrial metal on diminishing demand from consuming industries at the domestic spot markets. Further trimming of positions by participants tracking a reversing trend at the spot market on falling demand from alloy-makers mainly influenced the slide in nickel prices at futures trade.

Oil prices rise as market expects extended production cut.
Oil prices rose on Wednesday, supported by increasing confidence that an OPEC-led production cut aimed at tightening the market would be extended through the rest of 2017 and the first quarter of next year.Prices have rebounded on a growing consensus that a pledge by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, to cut supplies by 1.8 million barrels per day (bpd) would be extended to March 2018, instead of just covering the first half of this year.It is possible that the backwardation between 2011 and 2014 was irrelevant as overall price levels were so high that production was profitable anyway.  Others, however, point out that U.S. producers are now so efficient that they can live with prices as low as $40 per barrel, suggesting that an extreme backwardation would be needed to squeeze them out of the market.

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