Gold holds gains in Asia with North Korea tension setting the tone - 10 Aug 2017

Commodity Intraday Tips

Gold holds gains in Asia with North Korea tension setting the tone.  
Gold prices held early gains in Asia on Thursday with the market alert for more of the war of words between North Korea and Washington stoking geopolitical tension in the region. Gold prices spiked to one-week highs Wednesday, on the back of a surge in safe haven demand, after North Korea said it is considering an attack on the U.S. pacific territory of Guam. Safe-haven demand rose after North Korea said it was "carefully examining" a plan to strike Guam, where a U.S. military base is located, shrugging off President Donald Trump’s earlier warning that further threats to the United States will be met with "fire and fury". The surge in gold prices come a day after the yellow metal snapped a three-day winning streak, as investors cheered U.S. job openings data that topped expectations suggesting the U.S. labor market continues to strengthened, raising the prospect of the Federal Reserve hiking rates later this year. The U.S. central bank left its benchmark rate unchanged in July amid concerns about the slowdown in inflation but expressed optimism that its long-term target of about 2% inflation would be met.  

Massive Output Cuts Not Enough to Reverse Oversupply in China Aluminum Market, SMM Says.   
Despite massive aluminum production cuts in China in July, the country’s aluminum supply is still in a surplus, SMM finds. China Aluminum Output to Drop MoM in August as Cuts Outpace New Capacity, SMM Expects. Output cuts outpaced new capacity. Moreover, aluminum is needed for commissioning of new aluminum capacity. As such, market is beginning to feel the decline in aluminum ingot and liquid supply. That said, domestic market is still in oversupply, given poor downstream consumption.  

First Quantum to Close One Nickel Mine in Australia..   
First Quantum Minerals announced to close its Ravensthorpe mine in Australia due to low nickel price. Philippine Nickel Ore Exports to Fall in July, SMM Reports. The closure, which will affect about 450 workers, will start from early next month.  
Crude oil narrowly mixed in Asia on caution with Korea tensions. 
Crude oil prices were narrowly mixed in Asia on Thursday with sentiment cautious on risk on the Korean peninsula and as investors await regular data points on supply and demand globally. Overnight, crude futures settled higher on Wednesday, as investors cheered data showing a sharp decline in supplies of U.S. crude but gains were capped by a surprise uptick in gasoline stockpiles. The meeting “proved fruitful and “will help facilitate full conformity with the Declaration of Cooperation, which participating countries remain steadfast in their commitment to fulfill.” Opec noted in a statement on its website.

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