Wednesday, 28 March 2018

DAILY COMMODITY MARKET STRATEGY - 27 Mar 2018

Gold up on weaker dollar, Russian tensions

Gold prices rose for a third session on Tuesday as the dollar languished near a five-week low, as investors eyed rising tensions between Russia and the West even as a U.S.-China trade spat appeared to ease.

Spot gold XAU= edged up 0.1 percent to $1,354.51 per ounce at 0446 GMT, just off Monday's $1,355.97, the metal's highest level since Feb. 16.

U.S. gold futures GCcv1 for April delivery were flat at $1,354.60 per ounce.

"Gold prices continue to ratchet higher as the U.S. dollar weakens despite equity markets rebounding on easing concerns about the likelihood of a trade war between China and USA," Stephen Innes, APAC trading head at OANDA, said in a note.

"Realistically there are plentitudes of market turmoil in the making that continue to make gold the go-to place to hedge risk."s

Asian share markets rallied on Tuesday with a revival of investor appetite for riskier assets as reports of talks between the United States and China rekindled hopes a damaging trade war could be averted.

Oil prices rise on Middle East tension, global market recovery

Oil prices rose on Tuesday, pushed up by concerns that tensions in the Middle East could lead to supply disruptions.

Hopes that behind-the-scenes talks between the United States and China will prevent a looming trade war between the world's two biggest economies also supported global markets, including crude oil futures. West Texas Intermediate (WTI) crude futures CLc1 were at $65.89 a barrel at 0407 GMT, up 34 cents, or 0.5 percent, from their previous close.

Brent crude futures LCOc1 were at $70.34 per barrel, up 22 cents, or 0.3 percent.

U.S. oil production has already jumped by almost a quarter since mid-2016, to 10.4 million barrels per day (bpd) C-OUT-T-EIA , taking it past top exporter Saudi Arabia and within reach of top producer Russia, which pumps around 11 million bpd.