Thursday, 29 March 2018

DAILY COMMODITY MARKET STRATEGY - 29 Mar 2018

Gold prices inch up on buying after steep fall

Gold prices inched up on Thursday on buying after the bullion hit a one-week low and posted its biggest one-day percentage fall in nearly 9 months in the previous session.

Spot gold XAU= was up 0.2 percent at $1,327.72 per ounce at 0419 GMT, after hitting a one-week low of $1,323.20 in the previous session. Prices dropped 1.5 percent on Wednesday to mark their biggest one-day percentage decline since July 3, 2017.

U.S. gold futures GCcv1 for April delivery climbed 0.2 percent to $1,326.80 per ounce.

"Gold is still being seen as a safe-haven asset at the moment and we are seeing good physical buying, so that is supporting gold," said Brian Lan, managing director at dealer GoldSilver Central in Singapore.

Concerns about the global trade war have eased "but it doesn't mean it is over," Lan added.

U.S. President Donald Trump's tariffs on Chinese goods may not be imposed until early June, administration officials said on Wednesday, with public consultations and potential tariff revisions buying time for negotiations to forestall them. gains in the yellow metal were curbed as the U.S dollar held firm, having made its biggest daily gain in more than a half year, bolstered in part by hopes of detente in East Asia.

Oil prices rise as OPEC seen continuing supply cuts through 2018

Oil prices rose on Thursday as the producer cartel OPEC and other suppliers look set to continue withholding output for the rest of the year and potentially into 2019.

U.S. WTI crude futures CLc1 were at $64.62 a barrel at 0354 GMT, up 24 cents, or 0.4 percent, from their previous settlement.

Brent crude futures LCOc1 were at $69.81 per barrel, up 28 cents, or 0.4 percent.

The Middle East-dominated Organization of the Petroleum Exporting Countries (OPEC) together with a group of non-OPEC producers led by Russia started cutting output in 2017 to rein in oversupply and prop up the market.

Brent, off which OPEC prices most its crude exports, has risen by around a quarter since then, which has lead to speculation that the restraints on production may be lifted.

But sources at OPEC told Reuters this week that the group and its allies were set to keep their deal on cutting production for the rest of 2018. this, Brent remained below $70 and WTI under $65 per barrel, weighed by rising crude inventories and production in the United States.