Gold dips ahead of key US data
* Spot gold looks neutral in a range of $1,318-$1,327/oz
* All eyes on U.S. CPI data due at 1230 GMT
(Reuters) – Gold prices fell on Tuesday on a firmer dollar as investors waited for U.S. consumer price data due later in the day to gauge the outlook for inflation and the Federal Reserve’s rate hike stance.
Spot gold was down 0.2 percent at $1,319.87 per ounceas of 0711 GMT, while U.S. gold futures for April delivery fell 0.1 percent to $1,320.00 an ounce.
The dollar index, which measures the U.S. Dollar against a basket of currencies, was up 0.12 percent at 90.004.
“Gold traders are adopting a more neutral stance … While a March hike is fully priced in, traders usually get a bit anxious awaiting the Fed statement and key forward guidance,” said Stephen Innes, APAC trading head at OANDA.
“We should expect interest rate uncertainty to weigh on prices over the short term.”
The U.S. government is expected to release consumer priceindex (CPI) data at 1230 GMT, a key focus for the day. The median forecast by economists polled by Reuters points to annual core CPI inflation of 1.8 percent in February, which would be flat from January.
A higher reading could stoke expectations that the Federal Reserve will likely raise interest rates four times, rather than three times, this year. Higher interest rates increase the opportunity cost for non-yielding bullion.
Any out come above expectations will put gold under pressure,said Richard Xu, a fund manager at HuaAn Gold, China’s biggest gold exchange-traded fund.
In the longer term, Xu expected gold to be range bound this year, although an expected slowdown in the Chinese economy will provide support.
In February, growth in China’s manufacturing sector cooled to the weakest in over 1-1/2 years, raising concerns of a sharper-than-expected slowdown in the world’s second biggest economy this year as regulators tighten the screws on financial risks.
Spot gold looks neutral in a range of $1,318-$1,327 per ounce and an escape could suggest a direction, according to Reuters Technical analyst, Wang Tao.
In other precious metals, silver rose 0.1 percent to $16.50 per ounce
Platinum fell 0.4 percent to $959.24 an ounce, while palladium edged 0.2 percent lower to $977.00 per ounce.
Shanghai aluminium slips to lowest since Dec 2016 on oversupply fears
(Reuters) – Shanghai aluminium prices fell more than 2 percent on Tuesday, slipping below the 14,000 yuan( $2,213) a tonne mark for the first time since late 2016, just two days before winter output restrictions on Chinese smelters are due to be lifted.
China ordered smelters in 28 northern cities to cut aluminium output by at least 30 percent from mid-November to mid-March as part of an anti-pollution campaign.
Argonaut Securities analyst Helen Lau said the March 15 restart had already been priced in, but new smelting capacity in China was adding even more supply to the market. “I’m sure a lot of these new smelters are keen to increasetheir production to full capacity as early as possible,” Lausaid, looking to recover their investment, even at low prices.
The new plants may be able to break even below 14,000 yuan atonne, she added. Many Chinese smelters are losing money at current price levels, industry sources say.
* SHFE ALUMINIUM: The most traded May aluminium contract on the Shanghai Futures Exchange (ShFE) was down 2.1 percent at 13,835 yuan at 0344 GMT. It earlier touched 13,820 atonne, its lowest since Dec. 26, 2016.
* LME ALUMINIUM: Three-month aluminium on the London Metal Exchange (LME) edged up 0.1 percent to $2,092.50 a tonne,after closing down 1.4 percent in the previous session, its lowest in almost three months.
* COPPER: Three-month copper on the LME edged down 0.1 percent to $6,907.50 a tonne and ShFE copper fell 0.4 percent to 51,840 yuan a tonne.
* CHINA MINISTRIES: Top metals consumer China said it will merge its banking and insurance regulators and create a new agricultural and rural village ministry, a parliament document released on Tuesday showed, in the biggest ministry shake-up in years.
* CANADA: Canadian Prime Minister Justin Trudeau promised aluminum and steelworkers on Monday he would defend them against possible U.S. tariffs and called U.S. President Donald Trump to stress that “mutually beneficial” cross-border supply chains should be preserved.
* JAPAN: Some Japanese aluminium buyers have agreed to pay apremium of $129 per tonne for shipments from global producers in the April to June quarter, reflecting soaring U.S. spot premiums, two sources directly involved in the pricing talks said on Monday.
Oil prices dip on relentless rise in U.S. crude output
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SINGAPORE (Reuters) – Oil prices dipped on Tuesday, extending losses from the previous session, as the inexorable rise in U.S. crude output weighed on markets.
U.S. West Texas Intermediate (WTI) crude futures were at $61.18 a barrel at 0747 GMT, down 18 cents, or 0.3 percent, from their previous close.
Brent crude futures were at $64.77 per barrel, down 18 cents, or 0.3 percent.
Both crude benchmarks dropped by around 1 percent in their Monday sessions.
“Oil prices fell on the back of concerns that surging U.S. production … could push inventories in the U.S. higher,” ANZ bank said on Tuesday.
Healthy demand and ongoing supply restraint by a group or producers led by the Organization of the Petroleum Exporting Countries (OPEC) and Russia, however, are preventing further price falls.
But in a sign that an early-year rally in crude oil has fizzled out, money managers cut their combined net long positions in the six most important futures and options contracts linked to petroleum prices by 50 million barrels in the week to March 6.
Scaring off traders betting on further price increases has been a relentless rise in U.S. crude oil production, which soared past 10 million barrels per day (bpd) in late 2017, overtaking output by top exporter Saudi Arabia.
U.S. production is expected to rise above 11 million bpd by late 2018, taking the top spot from Russia, according to the International Energy Agency (IEA).
“Oil prices pulled back yesterday as basic fundamentals of oversupply continued to worry the markets,” said Sukrit Vijayakar, director of energy consultancy Trifecta in a note.
The rising U.S. output comes largely on the back of onshore shale oil production.
U.S. crude production from major shale formations is expected to rise by 131,000 bpd in April from the previous month to a record 6.95 million bpd, the U.S. Energy Information Administration (EIA) said in a monthly report on Monday.
“Oil prices moved lower … after (the) Energy Information Administration published a report that crude production from seven major U.S. shale plays is expected to see a climb,” said Stephen Innes, head of trading for Asia/Pacific at futures brokerage OANDA in Singapore.
That expected increase would top the 105,000 bpd climb in March from the previous month, to what was then expected to be a record high of 6.82 million bpd, the EIA said.
The EIA is due to publish its latest weekly U.S. production data on Wednesday.