Gold below $1,200 as Turkey tremors boost dollar.
GOLD broke through the 1,200 mark yesterday for the first time since March 2017 as it continued to be pressured by the dollar’s steady rise on safe haven flows. In the latest data from CFTC as at August 7, short positions built up by speculative traders were at their highest since data began in 2006, according to data compiled by Bloomberg. Overall however, net positioning is still long by 12,688 contracts, which is still the least since December 2015. Many commodities are falling victim to the dollar’s strength as risk-aversion trades gain popularity.
COPPER markets continue to be plagued by the threat of strike action at some of the world’s largest mines.
Copper markets continue to be plagued by the threat of strike action at some of the world’s largest mines. BHP is waiting to hear the response to its sweetened offer to workers at its Escondido mine in hopes of averting a strike, while strikers at the Caserones mine are set to go on strike on August 14 if mediation fails. Despite these potential supply disruptions, copper is struggling to gain any kind of foothold with a one-day spike higher on August 9 beaten back the following day. The base metal is facing its third straight down day and is now at 2.7102. The July 19 low of 2.6501 could be the next support level.
We expect nickel prices to continue their weak performance today.
LME nickel lost all the gains it made last week and closed at $13,535/mt on Monday. The SHFE 1811 contract overnight plummeted past the 20-day moving average to 111,330 yuan/mt after its initial, mild gains. It then recovered some losses and closed at 112,030 yuan/mt. We expect nickel prices to continue their weak performance today. LME nickel is likely to hover around $13,600/mt and the SHFE 1811 contract is likely to trade at 112,000-113,800 yuan/mt. Spot prices are seen at 112,000-114,000 yuan/mt..
Oil dips as trade tensions drag; Iran sanctions provide some support.
Oil prices are on the defensive with WTI sliding to a seven-week low overnight as markets consider the broader impact of the meltdown in the Turkish currency and economy. Additional pressure has come from the dollar’s bid bias as a safe haven stronghold, while a weekend IEA oil market report predicted that global demand for oil would slacken for the rest of this year before reviving next year. The combined downward pressure was strong enough to overcome reports that Saudi Arabia’s production has been scaled back in July even as Iran sanctions kick in..
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