Gold slides in Asia as greenback halts slide - 20 July 2017

Commodity Intraday Tips

Gold slides in Asia as greenback halts slide.  
Gold continued to slide in Asia on Thursday after the dollar showed signs of stopping a long plunge that has taken it to multi-month lows. Gold prices have lost some upward traction as the US dollar halted a plunge but stayed around 10-month lows. The plunge was slowed down by expectations, fuelled last week by the testimony of US Federal Reserve Chair Janet Yellen, that any monetary tightening in the US would happen slowly and reports from China that suggested growth there is slightly ahead of target for the year. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A dip in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand. An update on monetary policy from both the Bank of Japan and the European Central Bank (ECB) due Wednesday and Thursday, respectively, also weighed on upside momentum in gold prices, amid expectations that the ECB is moving closer towards tapering its ultra-accommodative monetary policy. Analysts expect that dollar weakness will continue to be the main driver of gold prices, however, pointed to tighter monetary policy and low inflation as potential headwinds.  
   
Blister Copper Shortage Affects Copper Output at China Ten Major Smelters, SMM Reports.  
Copper output at China’s ten major smelters, though up in June from May’s level, was below SMM’s forecast. SMM Tells Why Deadlock Persists in Shanghai Imported Copper Market. This is because production at Daye Nonferrous Metals Group and Yunnan Copper’s headquarters was affected by tight blister copper supply, SMM explained.  

Chalco Hikes Aluminum Prices in Major Markets.   
China Aluminum International Trading Co. (Chalco Trading) raised aluminum prices it offered in major markets today after yesterday’s cutChina Aluminum Output Grows in June. Primary aluminum output worldwide grew 1.37 million tonnes or 5.9% year-on-year during January-May.  

Crude prices settle higher on bullish inventory data. 
Crude futures settled higher on Wednesday, as investors cheered data showing supplies of U.S. crude fell by more-than-expected, fuelling expectations that an uptick in demand during the second-half of the year would reduce some of the surplus supplies. In Asia, China's refinery activity continued to indicate strong demand, with oil refineries increasing throughput in June. Wall Street has been cutting target share prices for many oilfield services firms, expecting producers to pull back on capital spending. "We haven't seen any downward revisions to company plans, but that could happen if oil prices continue to be choppy," said Sajjad Alam, an analyst with debt ratings firm Moody's.  

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