Copper prices dropped for a third day and aluminium fell to the lowest since mid-August as concerns over demand in top consumer China and declining oil prices pushed investors to sell
The price of gold fell on Wednesday, as upbeat U.S. growth data prompted a recovery in the dollar and a bounce in U.S. Treasury yields, though it remained stuck within the narrowest monthly range since 2005. The U.S. data, along with signs of progress with U.S. tax cuts and Europe’s Brexit negotiations, also brought fresh highs for world stocks on Wednesday, while crypto currency bitcoin smashed past the $11,000 level for the first time, only hours after it hit the $10,000 mark. Gold meanwhile fell further from Monday’s six-week high of just below $1,300 an ounce. Spot gold was at $1,284.16 an ounce, down 0.7 percent, while U.S. gold futures for December delivery were down $11.80 at $1,283.10. While another rate increase is expected next month, fears for more aggressive hikes have receded. Fed chair nominee Jerome Powell said in his Senate confirmation hearing on Tuesday that gradual rate increases would be the best way to sustain the U.S. recovery. Geopolitical risks can boost demand for safe-haven assets such as gold, but the metal took little support from news overnight that North Korea had tested a new type of intercontinental ballistic missile.
Oil prices slipped to session lows on Wednesday in a volatile session buffeted by conflicting statements from oil ministers a day ahead of OPEC’s meeting in Vienna, as members debate the path for an extension of the group’s supply-cut agreement. The market was less affected by a larger-than-expected 3.4 million-barrel drawdown in U.S. crude inventories, although gasoline and distillate stocks rising more than anticipated weighed. The oil market has pulled back over the last two days on concerns that the Organization of Petroleum Exporting Countries, and key nonmembers like Russia, might consider only a short-term extension to its current deal cutting supply by 1.8 million barrels per day (bpd) till March. Crude futures hit a session high after Kuwait’s Oil Minister Essam al-Marzouq said a key monitoring committee recommended extending the group’s supply-cut agreement through the end of 2018, but those sentiments were undercut by statements from Russia’s oil minister, who suggested the oil market still has yet to balance. The cartel is still weighing the offsetting factor of rising U.S. production, and considering a clause that would allow the group to review a potential extension at its spring 2018 meeting in May or June.
Copper prices dropped for a third day and aluminium fell to the lowest since mid-August as concerns over demand in top consumer China and declining oil prices pushed investors to sell. Benchmark copper on the London Metal Exchange closed down 0.7 percent at $6,760 a tonne after hitting $6,737, the lowest since Nov. 17. The metal used in power and construction has fallen 3.5 percent from Friday’s close. Headline inventories in LME-registered warehouses fell by 4,950 tonnes to 191,725 tonnes, the lowest since July 2016 and down around 40 percent from a high of 313,850 in September, supporting prices. Copper stocks in Shanghai Futures Exchange warehouses have however risen by around 60,000 tonnes since September, reducing fears of shortages. In other news, Peru, the world’s No. 2 copper producer, will likely churn out 2.5 million tonnes of copper in 2018 and 3 million tonnes in 2021, the vice minister of mining said. No. 1 producer Chile produced 512,730 tonnes of copper in October, up 13.3 percent from the same period a year before. Also, economic growth in China has shown signs of slowing and blue-chip stocks were sold off in the last week. In other metals, Nickel closed 1.5 percent higher at 11,520; zinc ended flat at $3,157; lead finished up 0.3 percent at $2,435; and tin ended 0.1 percent lower at $19,525.
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