Published on 11/07/2017 11:07:56 AM | Source: Sushil Finance

We expect gold prices to trade sideways - Sushil Finance

Posted in Commodities Reports | #Commodity Tips #Sushil Finance


Gold

Gold prices edged up on Monday from their lowest since mid-March in choppy trade, after nearing technical support and as traders awaited signals from central banks on interest rate hikes.

Bullion is highly sensitive to rising rates because they push up bond yields, increasing the opportunity cost of holding non-yielding gold. They also tend to boost the dollar, in which gold is priced.

Traders were looking ahead to Wednesday and Thursday, when U.S. Federal Reserve Chair Janet Yellen will address Congress.

Traders expected monetary tightening from many central banks. That rationale was bolstered by better than expected U.S. jobs data and strong German export figures.

Investors have sharply scaled back bets, reducing their net long positions in COMEX gold in the week to July 3 by more than half to the smallest bullish stance since January.

Gold holdings at the world's largest bullion-backed exchange-traded fund, SPDR Gold Trust, fell 2 percent in the week to Friday.

 

Outlook

We expect gold prices to trade sideways on the back of short covering after drop in prices.

 

Silver

Silver edged up 0.45 percent to $15.65 per ounce, after earlier falling to $15.16. Prices are near their lowest since April last year and investors' bullish stance in the week to July 3 fell to its lowest since December 2015.

 

Outlook

We expect silver prices to trade positive on the back of short covering after drop in prices.

 

Crude Oil

Oil prices rose modestly on Monday, but increased drilling activity in the United States and uncertainty over Libyan and Nigerian production cuts clouded the future supply outlook.

The Organization of the Petroleum Exporting Countries and some non-OPEC members agreed in May to curtail production until March 2018, but the move has failed to eliminate a global glut of crude.

Several key OPEC ministers will meet non-OPEC country Russia on July 24 in St Petersburg, Russia, to discuss oil markets.

Kuwait said on Sunday that Nigeria and Libya had been invited to the meeting and their production could be capped earlier than November, when OPEC is scheduled to hold formal talks, according to Bloomberg.

However, Nigeria's oil minister was unable to attend the OPEC meeting because of a previous commitment, the Kuwait Oil Minister Essam al-Marzouq told reporters on Monday.

Libya said on Monday it was ready for talks but added that its political, economic and humanitarian situation should be taken into account in talks on caps.

Meanwhile on Monday the CEO of Saudi Aramco Amin Nasser told a conference in Istanbul he thought the world was headed for a global supply shortage.

 

Outlook

We expect crude oil prices to trade sideways on the back of short covering after drop in prices.

 

Natural Gas

 

Outlook

We expect Natural gas prices to trade negative on the back of unfavorable weather conditions.

 

Base Metals

Copper slipped to the lowest in two weeks on Monday as rising inventories indicated healthy supplies, outweighing worries about possible strikes at mines in Chile.

Also pressuring the metals market was subdued inflation data in top market China as the economy loses momentum.

China's producer price inflation was unchanged in June amid lingering oversupply issues in the steel sector and as signs of economic weakness weighed on the outlook for prices.

 

Outlook

We expect base metal prices likely to trade volatile on the back of mixed fundamentals.

 

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