Gold prices fell in early Asia on Monday with attention on the dollar after gains last week on renewed views the Fed
GOLD – Gold prices fell in early Asia on Monday with attention on the dollar after gains last week on renewed views the Fed may hike for a third time this year. Ahead in the week, Friday’s U.S. inflation figures are seen as key as are comments by Fed speakers on interest rate and balance sheet unwinding views. Last week, gold prices fell on Friday as a solid U.S. employment report for July revived expectations for another interest rate increase by the Federal Reserve this year. The uptick in wage growth indicated that inflationary pressures are firming. Markets believe stronger inflation will enable the Fed to stick to its plans for a third interest rate hike this year. Expectations of a faster pace of rate increases tend to weigh on gold, which is denominated in dollars and struggles to compete with yield-bearing assets when borrowing costs rise. Gold prices are up around 9% this year, lifted in part by expectations that the Fed will take a gradual path toward tightening monetary policy.
CRUDE OIL – Crude oil prices eased in Asia on Monday with a supply meeting in Abu Dhabi and monthly reports later in the week expected to set the tone. Later on Monday, a meeting kicks off oil ministers from some OPEC and non-OPEC countries set for Monday and Tuesday in Abu Dhabi to discuss compliance to agreed upon global production limits that run through March 2018. In the week ahead, market participants will focus on monthly reports from the Organization of Petroleum Exporting Counties and the International Energy Agency to assess global oil supply and demand levels. The data will give traders a better picture of whether a global rebalancing is taking place in the oil market. It was the second decline in the past three weeks, suggesting early signs of moderating domestic production growth.
NICKEL – Last week, China’s total nickel ore port inventories kept growing on a weekly basis, Shanghai Metals Market reports. SMM Reports One nickel sulfate producer in Anhui reported full production schedule for August, Shanghai Metals Market learns. One Nickel Sulfate Producer Cuts Output in July.
ALUMINIUM – SHFE aluminum prices soared this morning as speculative capital poured in following release of Program for Off-Peak Production during Winter Heating Season by Hebei Province. China to Forbid Coal-Fired Captive Power Plant Construction. SMM sees no impact on aluminum and alumina production since there are no aluminum smelters and alumina refineries in operation in the province at present.
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