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FC: COMMODITIES ROUND-UP : METALS AND OIL 23, 2017 at 07:40AM

Gold edges higher as dollar falters after Trump remarks

Apeksha Nair

BENGALURU (Reuters) – Gold prices inched higher on Wednesday as the dollar slipped after remarks by U.S. President Donald Trump raising the spectre of a government shutdown if needed to fulfil a campaign pledge to build a wall on the country’s border with Mexico.

Spot gold was up 0.1 percent to $1,285.40 an ounce by 0358 GMT, after shedding 0.5 percent in the previous session.

U.S. gold futures for December delivery were unchanged at $1,291.30 per ounce.

The dollar edged down to its session low against the yen following President Trump’s remarks. “If we have to close down the government, we are building that wall,” Trump told supporters at a rally in Arizona.

Elsewhere, markets were bracing for an annual gathering of central bankers at a meeting in Jackson Hole, Wyoming on Thursday and Friday, where Federal Reserve Chair Janet Yellen and European Central Bank chief Mario Draghi are set to deliver speeches on the outlook for monetary policy and interest rates.

“Most of the people are now looking for hints from the Jackson Hole meeting between the central bankers,” Mark To, head of research at Hong Kong’s Wing Fung Financial Group, said.

Higher interest rates could boost the dollar and push bond yields up, putting pressure on gold prices by increasing the opportunity cost of holding non-yielding bullion.

“We could see gold possibly move higher…in light of concern that inflation data is running very much on the softer side of estimates,” said INTL FCStone analyst, Edward Meir.

Spot gold may break a support at $1,282 per ounce and fall into a support zone of $1,270-$1,276, Reuters technical analyst Wang Tao said.

“On the other hand what has been supporting gold for the last six months or so is the risk aversion,” Wing Fung’s To said, referring to the uncertainty around the Trump administration in the U.S. in particular.

The United States on Tuesday imposed new North Korea-related sanctions, targeting Chinese and Russian firms and individuals for supporting Pyongyang’s weapons programmes, but stopped short of an anticipated focus on Chinese banks.

Among other precious metals, silver rose 0.2 percent to $16.99 an ounce and platinum was up 0.1 percent at $975.50.

Palladium fell 0.9 percent to $924.50 after touching an over 16-year high at $940 on Tuesday.

Reporting by Apeksha Nair in Bengaluru; Editing by Joseph Radford and Kenneth Maxwell

 

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London metals consolidate on stronger dollar ahead of Jackson Hole

Reuters Staff

London metals slipped onWednesday as the dollar stood tall ahead of a meeting of globalcentral bankers at Jackson Hole in the United States later inthe week.

“Base metals were weaker as the USD weighed on investorappetite,” ANZ said in a report. It also said the Shanghai Futures Exchange’s move to cooldown the zinc market by imposing caps on trading positions andraising transaction fees had dented demand.

FUNDAMENTALS

* LONDON COPPER: London Metal Exchange copper hadslipped 0.2 percent to $6,565 a tonne by 0430 GMT, after endinglittle changed in the previous session, when prices touchedtheir highest since November 2014 at $6,649 a tonne.

* SHANGHAI COPPER: Shanghai Futures Exchange copperdropped 0.4 percent to 51,570 yuan ($7,743) a tonne.

* SHANGHAI ZINC: ShFE zinc was down 1.1 percent,recovering some of its earlier losses of more than 2 percent, asnew measures set down by the bourse to cool trading came intoeffect. The price differential between ShFE and LME zinc andlead prices has been encouraging for Chinese imports for most ofAugust, also suggesting greater deliveries into September.

* JAPAN MANUFACTURING: Japanese manufacturing activityexpanded at the fastest pace in three months in August asdomestic and export orders rebounded, a preliminary privatesurvey showed on Wednesday, highlighting that global demandremains buoyant.

* INDONESIA: Indonesia expects to strike an agreement thismonth to allow Freeport McMoRan Inc to keep operatingits huge copper mine in Papua in the coming decades, thecountry’s mining and energy minister said on Tuesday.

* CHILE: BHP Billiton’s Escondida coppermine in Chile has recovered from a six-week strike faster thanexpected, with output now running at normal levels, an executivewith the company said on Tuesday.

 

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Oil prices fall on concerns of oversupply as Libyan output recovers

Henning Gloystein

SINGAPORE (Reuters) – Oil prices fell on Wednesday, weighed down by concerns of oversupply as Libyan output improves and as U.S. gasoline inventories rose despite the peak summer driving season.

Brent crude futures the international benchmark for oil prices, were at $51.75 per barrel at 0415 GMT, down 12 cents, or 0.2 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $47.72 a barrel, down 11 cents, or 0.2 percent.

Libya’s Sharara oil field, the country’s largest, was gradually restarting on Tuesday after a shutdown.

Sharara recently reached output of 280,000 barrels per day (bpd), but closed earlier this month due to a pipeline blockade. Its production is key to Libya’s oil output, which surged above 1 million bpd in late June, about four times its level last summer.

Libya’s rising output is a headache for the Organization of the Petroleum Exporting Countries (OPEC), which together with non-OPEC producers including Russia has pledged to hold back around 1.8 million bpd of supplies between January this year and March 2018 to tighten supplies.

However, OPEC has so far fallen short off its pledge, in part due to Libya’s strong output. The OPEC-member has been exempt from cuts.

“Sentiment towards oil remains bearish amid oversupply fears and the possible threat of OPEC’s supply cut deal falling apart,” said Lukman Otunuga, analyst at futures brokerage FXTM.

The next meeting of a ministerial committee of OPEC and non-OPEC states to discuss their production pact has been proposed for Sept. 22.

In the United States, crude inventories fell by 3.6 million barrels in the week to Aug. 18 to 465.6 million, industry group the American Petroleum Institute said Tuesday. However, gasoline stocks rose by 1.4 million barrels, compared with analyst expectations in a Reuters poll for a 643,000-barrel decline.

Jeffrey Halley, senior market analyst at futures brokerage OANDA said that the rising U.S. gasoline inventories were “not a good sign during the U.S. summer driving season” during which fuel demand tends to be high.

Official inventory data by the U.S. Energy Information Administration is due to be released late on Wednesday.

Meanwhile, Bernstein Research warned that low prices and ample supplies were resulting in low oil industry investment levels.

“We see (oil and gas)… order intake activity at almost the same low level as in 2016 … For now, we remind investors that contract levels appear to still be insufficient to drive recovery in earnings,” it said.

Reporting by Henning Gloystein; Editing by Kenneth Maxwell and Joseph Radford