BULLION:
Gold prices inched up on Friday but remained on course to rack
up their longest monthly losing streak since 2013, hit by worries over
lingering U.S.-Sino trade tensions. Gold would closely track moves in the
dollar, in which the metal is priced, especially with investors bracing for the
next round of the U.S.-China trade conflict. Gold prices have declined about
7.7 percent so far this year amid international trade disputes and the Turkish
currency crisis, with investors preferring the dollar as a safe-haven. U.S.
President Donald Trump is prepared to quickly ramp up a trade war with China
and has told aides he is ready to impose tariffs on $200 billion more in
Chinese imports as soon as a public comment period on the plan ends next week.
Policy and regulatory certainty in South Africa could potentially add 122 billion
rand ($8 billion) in capital expenditure to the struggling mining sector over
the next four years, the Minerals Council’s chief executive said on Thursday.
Meanwhile, investors continued their quidation of exchange traded funds, even
after gold prices recovered from 1-1/2-year lows of $1,159.96 touched earlier
this month. Holdings of SPDR Gold Trust, the world’s largest gold-backed
exchange-traded fund, fell 0.27 percent to 757.81 tonnes on Thursday from
Wednesday.
METALS:
Base metals at LME during early trades on Friday were
trading higher as China manufacturing PMI beats expectations for August. In the
previous session all base metals complex corrected amid US-China trade tension.
China reported on Friday that factory activity was higher than expected in
August, with the official manufacturing Purchasing Manager's Index (PMI) coming
in at 51.3. The Chinese manufacturing PMI had been forecast to fall to 51.0 in
August from 51.2 in July, according to a poll of economists by Reuters. A
reading above 50 indicates expansion, while a reading below that signals
contraction. Despite the positive headline numbers, the breakdown of the data
suggested that the situation was not as rosy. That is as the slight improvement
in the manufacturing PMI index was spurred by a pick-up in production. However,
there was a rise in the inventories of finished goods, suggesting that demand
was not keeping up with output. Just last week, the U.S. and China slapped
tariffs on $16 billion worth of goods on each other. Both countries also
imposed tit-for-tat levies on $34 billion worth of each other's imports in
July. Market watchers are now keeping their eyes on a fresh round of potential
U.S. tariffs on $200 billion worth of Chinese goods expected later this year.
China's official services PMI for August rose to 54.2 for August against 54.0
in July, the National Bureau of Statistics reported. However, new orders in
that sector were also weaker.
ENERGY:
U.S. petroleum report from a day earlier and signs of
tightening global crude supplies amid falling Iranian exports. Crude oil prices
remained on track to post a monthly gain as a sharp drop in U.S. inventories
and disruptions to Iranian crude exports has renewed investor bets on a
possible shortage in global oil supplies, which would support oil prices.
Iran's oil exports are expected to drop from 2.7 million barrels per day (bpd)
in June to just 1.5 million bpd in September, The Wall Street Journal reported
earlier this week. President Donald Trump pulled the United States out of the
Iran nuclear agreement in May, allowing sanctions against Iran to snap back
into place. The first wave of sanctions went into effect last month and a
second set of sanctions on Iran's crude exports are slated for early November.
OPEC is closely monitoring supply levels to avert a possible shortage and will
reportedly discuss in December whether members can raise production to make up
the shortfall from an expected fall in Iranian crude. Following an agreement in
June to return to 100% compliance with oil output cuts that began in January
2017, OPEC has begun raising output, reducing its compliance with oil cuts to
109% last month from 120% in June. Base metals at LME during early trades on
Friday were trading higher as China
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