Tuesday, 27 March 2018

DAILY COMMODITY MARKET STRATEGY - 26 Mar 2018

Gold rises to five-week high on trade war, geopolitical woes

Gold prices rose to a five-week high on Monday as the threat of a trade war between the United States and China weighed on the dollar and equity markets, driving investors to seek refuge in safe-haven assets.

Spot gold XAU= rose 0.1 percent to $1,348.66 per ounce at 0419 GMT. Price rose to as much as $1,350.76 per ounce, the highest since Feb. 19.

Gold rose 2.6 percent last week, its biggest weekly gain since September 2017.U.S. gold futures GCcv1 for April delivery fell 0.1 percent to $1,348.80 per ounce.

Last week U.S. President Donald Trump signed a memorandum that could impose tariffs on up to $60 billion of Chinese goods, while China declared plans to levy additional duties on up to $3 billion of U.S. imports in response to U.S. tariffs on steel and aluminium. hard not to stay long gold with geopolitical risk now registering in the danger zone as an escalation of a trade war and John Bolton's appointment unambiguously raised short-term market risks to a whole new level," Stephen Innes, APAC trading head at OANDA, said in a note.

Oil prices fall as U.S. trade dispute with China looms

rent and WTI crude oil futures dipped on Monday as concerns of a looming trade dispute between the United States and China weighed on global markets.

In Asia, Shanghai crude oil futures debuted strongly, both in terms of volume and prices, with front-month contracts soaring as much as 6 percent ISCc1 as investors bought into the world's newest financial oil trading instrument.

Brent crude futures LCOc1 were at $70.18 per barrel, down 27 cents, or 0.4 percent.

Crude was also weighed by a rise in the number of U.S. rigs drilling for oil to a three-year high of 804, implying further rises in production C-OUT-T-EIA , which has already jumped by a quarter since mid-2016 to 10.4 million barrels per day (bpd). FUTURES

Financial oil markets have long been dominated by Europe's Brent and America's WTI.

Asia, despite being the world's biggest and fastest growing oil consumer, has so far not had a benchmark.