Gold regains strength amid planned U.S., China trade talks.
Spot gold prices bounced from 19-month lows on Thursday, as the U.S. dollar slipped on news that China and the United States will hold trade talks this month, although sentiment remained negative. Gold futures settled slightly down as the U.S. dollar came off its lows later in the trading session, yet remained negative. Spot gold XAU= gained 0.3 percent at $1,177.80 an ounce by 1:39 p.m. EDT (1739 GMT), from an earlier low of $1,159.96, it’s weakest since January last year. U.S. gold futures GCcv1 for December delivery settled down $1, or 0.1 percent, at $1,184 per ounce. Auto catalyst metal platinum is oversupplied. South Africa, the world's top platinum producer, saw its rand currency ZAR= hit a two-year low due to contagion from the Turkish lira earlier this week. A lower rand cuts costs for South African miners when expressed in dollars, which means they can keep producing and delaying the process of rebalancing the market.
Copper Tumbles into a Bear Market.
While the risk of a strike at BHP’s Escondido copper mine in Chile has temporarily wound down, the movement of Chinese yuan and the performance of Chinese economy would be key. Spot premiums are seen higher at 100-140 yuan/mt today given the early tumbles in futures prices. The euro zone’s surplus for goods traded with the rest of the world fell by less than forecast in June, suggesting the bloc may be weathering international trade frictions better than expected. Initial claims for state unemployment benefits slipped 2,000 to a seasonally adjusted 212,000 for the week ended August 11, the Labor Department said on Thursday. Data for the prior week was revised to show 1,000 more applications received than previously reported.
Decreasing inventories and upbeat fundamentals in China also buoyed nickel prices.
LME nickel jumped past $13,400/mt before it met pressure at $13,500/mt and closed at $13,340/mt on Thursday. The SHFE 1811 contract climbed to 111,450 yuan/mt before it edged down, hovering around the daily moving average, and closed at 110,620 yuan/mt overnight. Decreasing inventories and upbeat fundamentals in China also buoyed nickel prices. We expect the prices to extend their gains today. LME nickel is likely to hover around $13,000/mt today and the SHFE 1811 contract is expected to trade at 110,000-111,500 yuan/mt with spot prices at 109,000-111,000 yuan/mt.
Oil prices slip amid fears over global economic growth.
Oil prices fell on Friday, with U.S. crude heading for a seventh weekly decline amid increasing concerns about slowing global economic growth that could hit demand for petroleum products as inventories build. China and the United States have implemented several rounds of trade tariffs and threatened further duties on exports worth hundreds of billions of dollars, which could knock global economic growth.At the same time, the crisis gripping the Turkish lira has rattled emerging markets and reverberated across equities, bonds and raw materials.U.S. data on Wednesday showed crude output C-OUT-T-EIA rose by 100,000 barrels per day to 10.9 million bpd in the week ending Aug. 10.Crude inventories C-STK-T-EIA increased by 6.8 million barrels, representing the largest weekly rise since March last year.
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