Gold declines as rising global trade tensions buoy dollar.
Gold inched lower on Friday, as the dollar stayed firm on expectations of rising interest rates amid lingering Sino-US trade tensions, and the yellow metal was headed for its fifth straight monthly decline. Spot gold was down 0.1 per cent at $1,198.66 an ounce at 0029 GMT. Prices were on track for fifth straight monthly decline, the metal's longest losing streak since early 2013. They are down about 2 per cent so far this month. US gold futures were mostly steady at $1,204 an ounce. US 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, Bloomberg News reported on Thursday. Policy and regulatory certainty in South Africa could potentially add 122 billion rand ($8 billion) in capital expenditure to the struggling mining sector.
A looming trade war is likely to limit rebounds in copper prices in the short term.
As the US dollar climbed above 95, LME copper fell below support at $6,000/mt while the SHFE 1811 contract stood firm above 48,000 yuan/mt. However, it will remain difficult for the contract to rise above the 20-day moving average given pressure from shorts. A weak euro, expectations of further interest rate hikes by the US Federal Reserve, and a looming trade war are likely to limit rebounds in copper prices in the short term. Spot premiums are likely to be seen at 50 yuan/mt as lower prices prompt downstream purchases.
Large amount of Norilsk nickel entered the domestic market last Friday while downstream demand rose slightly.
Large amount of Norilsk nickel entered the domestic market last Friday while downstream demand rose slightly, and this lowered nickel prices. Surging shorts dragged the SHFE 1811 contract to a low around 105,000 yuan/mt. It closed at 105,090 yuan/mt with open interests up 63,000 lots to 370,000 lots. LME nickel fell sharply, after it rebounded, to the lowest in seven months below the $12,800/mt level. We expect LME nickel to hover weakly around $12,750/mt today, with the contract trading at 104,500-106,000 yuan/mt. Spot prices are likely to trade at 105,000-108,500 yuan/mt.
Oil falls on rising output from OPEC and United States.
Oil prices fell on Monday amid rising supply from OPEC and the United States, outweighing concerns that falling Iranian output will tighten markets once U.S. sanctions bite from November. Output from the producer cartel of the Organization of the Petroleum Exporting Countries (OPEC) rose by 220,000 barrels per day (bpd) between July and August, to a 2018-high of 32.79 million bpd, a Reuters survey found. Output was boosted by a recovery in Libyan production and as Iraq's southern exports hit a record. U.S. drillers added oil rigs for the first time in three weeks, energy services firm Baker Hughes reported on Friday, increasing the rig count by 2 units to 862. high rig count has helped lift U.S. crude oil production C-OUT-T-EIA by more than 30 percent since mid-2016, to 11 million bpd.
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