Gold prices edged higher in European morning trade on Thursday, moving away from their lowest level in around five weeks
GOLD – Gold prices edged higher in European morning trade on Thursday, moving away from their lowest level in around five weeks as recent selling pressure tied to bets on another U.S. interest rate hike this year lost steam. Investors continued to evaluate the possibility of another rate hike from the Federal Reserve later this year in the wake of mixed messages from policymakers in recent days. Last week, the U.S. central bank raised interest rates for the second time this year and maintained plans to go ahead with another rate hike by year-end. Despite the Fed’s relatively hawkish message, market players remained doubtful over the central bank’s ability to raise rates as much as it would like in the coming months due to a recent run of disappointing U.S. economic data and indications of weak inflation. Futures traders are pricing in less than a 15% chance of a hike at the Fed’s September meeting, according to Investing.com’s Fed Rate Monitor Tool. Odds of a December increase was seen at about 35%. The precious metal is sensitive to moves in U.S. rates, which lift the opportunity cost of holding non-yielding assets such as bullion.
CRUDE OIL – Oil prices recovered slightly in North American trade on Thursday morning, after falling to their lowest level in around ten months in the prior session amid lingering concerns over strong shale output growth in the U.S. Oil prices lost around 2% on Wednesday, plunging deeper into bear market territory, after U.S. government data revealed a rise in domestic crude production, which more than offset a drop in oil and gasoline stockpiles. The U.S. Energy Information Administration’s weekly supply report published Wednesday showed that domestic output climbed by 20,000 barrels to 9.35 million barrels a day, almost 8% higher than the same period last year. Oil prices have been under pressure in recent weeks as concern over rising U.S. shale output offset production cuts by OPEC and non-OPEC members. So far, the production-cut agreement has had little impact on global inventory levels due to rising supply from producers that are exempt from the deal, such as Libya and Nigeria and a relentless increase in U.S. shale output.
ALUMINIUM – Kobe Steel is optimistic over automotive aluminum demand, citing stricter environmental protection regulations. Since cars made of aluminum could reduce weight and improve fuel efficiency, increasingly stricter environmental protection requirement will boost aluminum use in cars, Kobe Steel said.
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