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FC: COMMODITIES ROUND-UP: METALS AND OIL September 29, 2017 at 09:03AM

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Gold inches lower, on track for worst month this year

By Nithin Thomas

Prasad Sept 29 (Reuters) – Gold fell on Friday, inching towards the previous session’s six-week low as the dollar strengthened, with prices set for their biggest monthly fall this year.

Spot gold declined 0.2 percent to $1,284.28 per ounce at 0434 GMT, on track to register a 2.8 percent decline in September, the largest monthly fall so far in 2017 and the biggest monthly drop since November.

However, it was set to end the quarter up around 3.5 percent after prices rose in July and August.

U.S. gold futures fell 0.1 percent to $1,287.70 per ounce. Gold is mostly being influenced by the dollar’s movements in an otherwise quiet session, said Yuichi Ikemizu at ICBC Standard Bank in Tokyo.

The dollar rose against a basket of major currencies on Friday. The greenback pulled back from a one-month high reached earlier on Thursday as investors this week were supportive of the Trump administration’s tax plan and the outlook for Federal Reserve policy.

“As long as nothing happens on the North Korea front, I guess we’ll have a pretty quiet Friday,” Ikemizu said.

Russian and North Korean officials will meet in Moscow on Friday to discuss the North Korea crisis.

“(Gold) will likely continue to struggle in the short term against a backdrop of higher interest rates, particularly in the U.S. and possibly in the U.K. and Europe,” said INTL FCStone analyst Edward Meir.

Proposed U.S. tax reforms and strong economic data that supported the case for another U.S. interest rate hike this year have weighed on gold.

Gold is highly sensitive to rising U.S. interest rates, which increase the opportunity cost of holding non-yielding bullion, while boosting the greenback.

Meanwhile, palladium gained 0.7 percent to $935.05 per ounce. It was up 11 percent for the quarter and 38 percent so far in 2017. Platinum lost 0.1 percent to $918.40 per ounce. The metal is set for a 7.1 percent drop for September, its worst performing month since March.

Palladium traded at a premium to platinum for a third straight day after prices for the two metals hit parity for the first time since 2001 on Wednesday.

“Palladium is short-supplied and also there’s very good demand from auto sectors. As long as this situation continues, we’ll see a palladium premium,” said Ikemizu.

“If it goes on for a long time, car makers will have to switch from palladium to platinum, which was unthinkable in the past…(However) This current reversal probably won’t be long enough for car makers to decide on substitution.”

Both metals are primarily consumed by automakers for catalytic converters, but platinum is more heavily used in diesel vehicles that have fallen out of favour.

Meanwhile, silver edged 0.2 percent lower to $16.80 per ounce and was on track to decline 4.4 percent for the month but is set to gain 1.4 percent for the quarter.

 

 

Base metals: Copper, zinc slide; lead rises

(ECONOMIC TIMES) – Copper eased further by 0.06 per cent to Rs 431.50 per kg in futures trade today as speculators narrowed their bets, tracking a weak trend at the spot market on tepid demand, even as the metal strengthened overseas.

At Multi Commodity Exchange, copper for delivery in November shed 25 paise, or 0.06 per cent, to Rs 431.50 per kg in a business turnover of 1,300 lots.

The metal for delivery in far-month February contracts edged down by 20 paise, or 0.05 per cent, to Rs 435.60 per kg in 39 lots.

Globally, copper for three-month delivery ended 1.3 per cent higher at USD 6,522 per tonne at the London Metal Exchange yesterday.

Analysts said offloading of positions by participants due to muted demand from consuming industries in the physical market kept copper prices lower in futures trade.

Zinc

Zinc prices softened by 0.17 per cent to Rs 207.15 per kg in futures market today as speculators tightened exposure, taking negative cues from the spot market on subdued demand from consuming industries.

At Multi Commodity Exchange, zinc for delivery in October declined 35 paise, or 0.17 per cent, to Rs 207.15 per kg in a business turnover of 831 lots.

The metal for delivery in September contracts lost 25 paise, or 0.12 per cent, to Rs 209 per kg in 1,383 lots.

Analysts said cutting down of positions by participants owing to slack demand from consuming industries in the physical market weighed on zinc prices.

Lead

Lead prices edged up by 0.18 per cent to Rs 163.10 per kg in futures trade today as participants built up fresh positions after demand from consuming industries in the spot market picked up.

At Multi Commodity Exchange, lead for delivery in September went higher by 30 paise, or 0.18 per cent, to Rs 163.10 per kg in a business turnover of 631 lots.

Similarly, the metal for delivery in September contracts traded higher by 25 paise, or 0.15 per cent, to Rs 162.90 per kg in 617 lots.

Analysts attributed the rise in lead futures to fresh positions from traders after uptick in demand from battery- makers in the spot market.

Nickel

Nickel prices drifted lower by 0.49 per cent to Rs 675.90 per kg in futures trading today as speculators booked profit, prompted by easing demand in the spot market.

At Multi Commodity Exchange, nickel for delivery in September fell by Rs 3.30, or 0.49 per cent, to Rs 675.90 per kg in a business turnover of 1,015 lots.

Likewise, the metal for delivery in October contracts traded lower by Rs 2.90, or 0.42 per cent, to Rs 683.10 per kg in 1,056 lots.

Analysts said that besides profit-booking by participants at the existing levels, fall in demand from the alloy maker in the spot market mainly led to the decline in nickel prices in futures trade.

 

 

Oil mixed but set for weekly gain on improving market outlook

By Aaron Sheldrick

TOKYO (Reuters) – Oil prices were mixed on Friday, but both Brent and U.S. crude were set to chalk up another weekly gain as investors bet that efforts to cut a global glut are working and that the demand outlook is improving.

U.S. crude CLc1 was down 8 cents at $51.48 a barrel at 0641 GMT, after earlier rising slightly. Still, the contract is heading for a fourth consecutively weekly gain and is on track for a 9 percent advance this month.

Brent LCOc1 rose 1 cent to $57.42 a barrel, heading for a fifth weekly climb and a nearly 10 percent gain for September.

The price gains, most of them in the last two-and-a-half weeks, have come as traders anticipated renewed demand from U.S. refiners that were resuming operations after shutdowns due to Hurricane Harvey.

Major world oil producers outside the United States have also indicated they will stick with output cuts to limit supply.

They are getting support from Turkey’s threats to cut off a pipeline from the Kurdish region of Iraq after a referendum where Kurds voted overwhelmingly in favour of independence.

“(There is) an increasingly positive view from the supply side, with potential Kurdish production disruption, and a plethora of energy agencies suggesting global demand is increasing,” said Jeffrey Halley, senior market analyst at OANDA in Singapore.

“The technical picture still looks positive for both contracts with the consolidation and gentle pull-backs thus far suggesting oil is pausing for breath at these levels,” he said.

Turkish President Tayyip Erdogan said this week he could use force to prevent the formation of an independent Kurdish state and might close the oil “tap”.

The Kurdish region exports about 500,000 barrels a day through a pipeline that runs through Turkey to the Mediterranean Sea.

Turkey promised on Thursday to deal only with the Iraqi government on crude, the office of Iraqi Prime Minister Haider al-Abadi said.

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