Gold Prices Inch Lower As Dollar Remains Steady Ahead of FOMC- 20 Mar 2018

Commodity Intraday Tips
Gold Prices Inch Lower As Dollar Remains Steady Ahead of FOMC -Gold prices inched lower on Tuesday as the dollar remained steady with investors expecting the first rate hike this year at the meeting of the Federal Open Markets Committee (FOMC) on Tuesday and Wednesday. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A gain in the dollar makes gold more expensive for holders of foreign currency and thus, decreases demand for the precious metal. Investors await the FOMC meeting to see whether the Fed is planning three or four rate hikes this year. Analysts are also watching closely to see what will come from new Fed head Jerome Powell’s first meeting as chair. The Fed’s target inflation rate is 2%, and it has said it expects to hit that by the end of the year.

Zinc dropped tracking a fall in equities as investors trimmed positions ahead of a Federal Reserve meeting starting later in the day - Zinc on MCX settled up 0.35% at 213.20 on short covering after prices seen pressure amid fall in equities as investors trimmed positions ahead of a Federal Reserve meeting starting later in the day. Zinc plating companies in north China face fresh output cuts as several cities are likely to extend the heating season by five to 15 days. Social inventories of zinc in Shanghai, Guangdong and Tianjin stood at 265,100 mt as of Friday, according to data. Social inventories in Shanghai and Tianjin declined, while those in Guangdong rose. Inventories are likely to dip as production recovers when the two political sessions end. In the week ahead, the G20 meeting in Argentina and the threat of trade wars will be in focus ahead of the Fed announcement on Wednesday.

Oil Prices Rise On Middle East Tension - Oil prices rose on Tuesday morning in Asia amid tensions in the Middle East.Oil prices were lifted by concerns that the U.S. may reimpose sanctions on Iran, as well as tensions between Saudi Arabia and Iran. Venezuela’s declining crude production is also supporting oil markets. An economic crisis has cut Venezuela’s oil production by almost half since early 2005 to well below 2 million barrels per day (bpd). The International Energy Agency said last week that the country’s crude production was “clearly vulnerable to an accelerated decline”, and that this could tip global markets into deficit.          However, looming over oil markets is surging U.S. crude output, which has reached 10.38 million bpd, up by more than 23% since mid-2016. The U.S. has already surpassed top exporter Saudi Arabia and is expected to overtake Russia as the top producer by late 2018, with output of more than 11 million bpd.

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