Copper steadied on Thursday near one-week lows as the dollar eased back from highs triggered by a Federal Reserve meeting - 7 July 2017

Commodity Intraday Tips

GOLD :- Gold prices hit the highest levels of the session, after data showed that U.S. private employers added less jobs than expected last month, backing bets of a slower pace of interest rate hikes from the Federal Reserve. U.S. private employers added 158,000 jobs in June, well below economists' expectations, a report by a payrolls processor ADP showed on Thursday. The ADP figures come ahead of the U.S. Labor Department's more comprehensive nonfarm payrolls report on Friday, which includes both public and private-sector employment. Meanwhile, market players continued to digest the latest minutes from the Fed's June policy meeting released on Wednesday, which showed a lack of consensus among policymakers over the outlook for inflation and how it could impact on the future pace of interest rate increases. Several officials also wanted to announce a start to the process of reducing the Fed's large portfolio of Treasury bonds and mortgage-backed securities by the end of August, but others preferred to wait until later in the year. The Fed hiked rates at its June meeting and stuck to its forecast for one more rate hike this year, but the subdued inflation outlook has since raised doubts over whether the U.S. central bank will be able to stick to its planned tightening path. 

CRUDE OIL :- West Texas Intermediate oil extended gains, after data showed that oil supplies in the U.S. registered a much larger-than-expected inventory draw. The U.S. Energy Information Administration said in its weekly report that crude oil inventories fell by 6.299 million barrels in the week ended June 30. Supplies at Cushing, Oklahoma, the key delivery point for Nymex crude, decreased by 1.334 million barrels last week, the EIA said. Total U.S. crude oil inventories stood at 502.9 million barrels as of last week, according to press release, which the EIA considered to be “in the upper half of the average range for this time of year”. The report also showed that gasoline inventories decreased by 3.669 million barrels, compared to expectations for a draw of 1.067 million barrels, while distillate stockpiles fell by 1.850 million barrels, compared to forecasts for an increase of 0.217 million. Thursday’s strong rebound came after oil tumbled around 4% in the prior session after data showing that exports by the Organization of Petroleum Exporting Countries (OPEC) rose for a second month in June, adding to doubts over whether the group can do enough to tighten the market. The Reuters’ report showed an uptick in OPEC exports for June to 25.92 million barrels per day (bpd), up 450,000 bpd from May, and 1.9 million bpd more than a year ago. Adding to Wednesday’s bearish sentiment was a Bloomberg report saying that Russia doesn’t want to change the current deal because any further supply curbs would send the wrong message to the market, according to government officials. 

COPPER :- Copper steadied on Thursday near one-week lows as the dollar eased back from highs triggered by a Federal Reserve meeting that clouded the outlook for the pace of future interest rate rises. Volumes were exceedingly low with less than 1000 lots of the benchmark LME copper contract having changed hands. Federal Reserve policymakers were increasingly split on the outlook for inflation and how it might affect the future pace of interest rate rises, according to the minutes of the Fed's last policy meeting on June 13-14 released on Wednesday. The United States cautioned on Wednesday it was ready to use force if need be to stop North Korea's nuclear missile program but said it preferred global diplomatic action against Pyongyang. Chinese private equity firm GSR Capital is looking to buy a substantial holding in Chile's Sociedad Quimica Y Minera (SQM), one of the world's biggest lithium producers, according to two sources with knowledge of the matter. Democratic Republic of Congo plans to impose harsher punishments on mining companies that fail to repatriate at least 40 percent of their revenue from mineral exports, central bank governor Deogratias Mutombo said. A year and a half after banning bauxite mining to force miners to meet environmental standards, Malaysia's exports to main customer China are again growing, raising public anger over illegal mining.

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