Gold prices started the week on the back foot on Monday, moving away from their strongest level in more than a year
Gold slides from 1-year high as North Korea tensions ebb- Gold prices started the week on the back foot on Monday, moving away from their strongest level in more than a year as investor concern over a standoff between the U.S. and North Korea eased. Appetite for safe-haven assets eased amid relief that North Korea didn’t conduct a weapons test over the weekend to mark the anniversary of the country’s founding. There had been speculation in the lead up to the weekend that North Korea could conduct its next missile test then to celebrate the occasion. Risk sentiment received a further boost after Hurricane Irma struck the U.S. southeast with less force than once feared, scaling back estimates for economic damage. Gold prices notched a third weekly gain in a row last week. The yellow metal has been well-supported recently amid concerns over geopolitical uncertainty on the Korean peninsula and reduced expectations of U.S. monetary policy tightening. Global financial markets will focus on a key batch of U.S. economic data in the week ahead, with Thursday’s inflation report in the spotlight, for further clues on the timing of the next Federal Reserve rate hike. Markets remain skeptical the Fed will raise rates again before the end of this year due to worries over the subdued inflation outlook, but it is widely expected to start the process of reducing its balance sheet sometime this fall.
Oil weakens on fears Irma could dent U.S. demand – Oil prices edged lower on Monday on concerns that Hurricane Irma’s pounding of heavily populated areas of Florida could dent oil demand in the world’s top oil consuming nation. Losses were capped by weekend talks between Saudi Arabia’s oil minister and counterparts over a possible extension to a pact to cut global oil supplies beyond next March. Hurricane Irma knocked out power to nearly four million Florida homes and businesses on Sunday after millions were told to evacuate ahead of the storm. “We believe that Irma will have a negative impact on oil demand but not on oil production or processing,” Goldman Sachs (NYSE:GS) analysts said in a note. Irma is forecast to weaken to a tropical storm over northern Florida or southern Georgia later on Monday. It comes on the heels of Hurricane Harvey, which struck the U.S. oil hub of Texas two weeks ago, knocking out a quarter of the nation’s refineries, many of which are now restarting operations. The two hurricanes are expected to inflict a “bearish shock” on oil balances in September of about 600,000 barrels per day (bpd), Goldman said. The longer-term focus, however, was on discussions over a possible extension to the 15-month production pact between members of the Organization of the Petroleum Exporting Countries (OPEC)and non-OPEC producers including Russia and Kazakhstan. The deal aims to curb an oil supply glut that has weighed on crude prices for more than three years.
China Alumina Output Jumps in August, Despite Ore Shortage, SMM Reports – Despite bauxite shortfall, China’s alumina output rose sharply in August, SMM data showed. Nanshan Aluminum to Invest 5.7 Billion Yuan to Build Alumina Project in Indonesia. The country produced 5.92 million tonnes of alumina in August, up 19.1% from a year ago. The daily average output increased 2.6% month-on-month to 191,100 tonnes. Tight bauxite supply in Shanxi reduced local alumina production. But, the decline was more than offset by higher output at other producers, who ran at full capacity amid higher alumina prices.
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