Gold flat despite dip in the dollar - 14 July 2017

Gold flat despite dip in the dollar.
Gold prices were unchanged on Thursday, as investors continued to cheer comments from Federal Reserve chair Janet Yellen suggesting that the pace of future rate hikes would be gradual while weak inflation data lifted sentiment. A day after Janet Yellen signaled future rate hikes would be gradual, investors mulled over data showing a dip in inflation and a slowdown in the labor market. The producer price index climbed at a year-on-year rate of 2% in June, from a 2% rate the month prior. In separate report The U.S. Department of Labor said Thursday that initial jobless claims fell by 3000 to 247,000 in the week ended July 7, missing forecasts of a 5,000 decline. Gold has fallen on the back expectations that the Federal Reserve would continue raising its key benchmark rate, decreasing investor demand for gold, as a rising interest environment increases the opportunity cost of holding non-interest bearing gold.
 
LME Nickel Price to Move Sideways.
US PPI unexpectedly rose in June, reflecting the stagnation in inflation may be only temporary. Fed Chair Janet Yellen expects Q2 growth to top Q1’s, helping the US dollar rise. The IEA expects global crude oil demand to strengthen, driving up oil prices. China will hold the fifth financial work meeting today, with emphasis on financial risk control and reform of financial supervision.

LME Aluminum to Hover at Highs.  
LME aluminum regained previous lost ground on Thursday night and hovered at highs with weakening impact from output cut news in Shandong. Alcoa-the global industry leader in bauxite, alumina and aluminum products has announced plans to partially restart operations at Warrick Operations aluminum smelter in Evansville, Indiana, after almost a year of closure. The proposed restart is expected to ensure supply to Warrick Operations’ rolling mill, thereby improving the competitiveness of the mill.

Oil slows down in Asia after strong week.
Oil prices slowed their advance on Friday morning trade in Asia, reacting to the prospect of high inventories and more efficient production.The slight losses on Friday morning in Asia have done little to cap one of the best weeks for oil in months. Oil prices have been depressed for some three years now, but reports earlier this week of dropping stocks in the U.S. "OPEC will have to cut deeper and for longer if it wants to eliminate the inventory overhang and prices to rise," Bernstein said. It added that the upside for oil prices looked limited even if OPEC took more action due to high U.S. shale production. Goldman Sachs (NYSE:GS) said that the crude oil price outlook remained weak, largely due to rising cost efficiency from U.S. shale drillers.

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