BULLION:-
Gold prices edged higher to a more than five-month peak on Wednesday as a softer dollar supported the bullion while investor awaited cues on the rate hike trajectory of the U.S. central bank from its two-day policy meeting. Spot gold XAU= was up 0.1 percent at $1,250.20 per ounce, as of 0405 GMT, after hitting its highest since July 11 at $1,251.06 earlier in the session. "The market is largely in a holding pattern as everyone is focusing on the FOMC (Federal Open Market Committee) meeting... We see prices largely range-bound," said Benjamin Lu, a commodities analyst with Phillip Futures in Singapore. The Federal Reserve is widely expected to raise interest rates for the fourth time this year, but weak stock markets and slowing global growth may prompt it to tone down its stance on monetary tightening. If it sounds dovish, prices should consolidate and hold at $1,256 and if it breaks that we might see prices going much further to $1,265, Lu added. Lower interest rates reduce the opportunity cost of holding non-yielding bullion and weigh on the dollar, in which it is priced.
METALS:-
Following the slump in oil prices, both LME and SHFE copper tumbled overnight. LME copper fell past all short-term moving averages to end at $5,956/mt. As shorts aggressively added their bets, the SHFE 1902 contract saw losses accelerate in later trades of overnight and ended at 48,090 yuan/mt. We do not expect a substantial rebound in copper prices today. LME copper is likely to trade at $5,950-6,040/mt with the SHFE 1902 contract at 48,000-48,500 yuan/mt. Spot premiums are seen up to 80 yuan/mt. London nickel tumbled during later trades of Tuesday and closed at $10,840/mt. The SHFE 1905 contract slumped to close at 89,150 yuan/mt overnight as longs took profits after the contract climbed to a high of 91,380 yuan/mt. A widely expected Fed interest rate hike, fears of slowing global economic growth and downbeat economic data are likely to continue to weigh on LME nickel today. The SHFE 1905 contract is expected to trade at 88,500-90,000 yuan/mt with spot prices at 89,000-96,000 yuan/mt.
ENERGY:-
Oil prices rebounded on Wednesday after falling for the past three sessions with worries about oversupply and a slowing global economy keeping markets under pressure though sentiment may be shifting as falling equity markets seemed to stabilize. WTI prices are holding as "traders look for some solace in U.S. equity markets as risk sentiment appears to be stabilizing," said Stephen Innes, head of trading for Asia-Pacific at OANDA. "But we are far removed from any bullish flip in investor sentiment." Further adding to the oversupply concerns, the American Petroleum Institute said on Tuesday U.S. crude stocks rose unexpectedly last week, while gasoline inventories increased. If the build in crude stockpiles is confirmed by U.S. government data Wednesday, it will be the first increase in three weeks. EIA/S analysts said that upcoming output cuts led by the Organization of the Petroleum Exporting Countries (OPEC) had so far failed to stimulate the market as they were not due to kick in until next month.
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