Gold prices firmed on Thursday as the dollar faltered following dovish comments from U.S. Federal Reserve Chair Jerome Powell, calming investor concerns over the pace of rate hikes. “The dovish Fed stance was relatively constructive from pure dollar trade perspective and it could edge off the dollar and continue to do so until the year end, which is quite significant for gold prices,” said Stephen Innes, APAC trading head at OANDA in Singapore. The dollar slipped from a two-week high on Wednesday after Powell said interest rates are just below neutral, raising expectations that the U.S. central bank is closer to the end of its rate hike cycle.
Copper led gains across base metals overnight, as the US dollar dipped from two-week highs after the US Federal Reserve described interest rates as “just below” the neutral rate. LME copper rebounded back above all moving averages, and above the Bollinger middle band. It closed at $6,251.5/mt after surged to a high of $6,269/mt. The SHFE copper dominant contract changed to the 1902 contract overnight, which rallied above the five- and 60-day moving averages on longs’ support. We expect it to trade at 49,200-49,600 yuan/mt with its LME counterpart trading at $6,180-6,230/mt today.
Oil prices ticked higher on Thursday on optimism that trade talks at the G20 meeting could aid the global economy and improve the demand outlook, while an increase in U.S. crude inventories to their highest in a year curbed gains. “We have seen huge increases in supply and the demand picture is in question. However, we might see some movement on global trade issues at the G20 meeting which starts on Friday,” said Michael McCarthy, chief strategist at CMC Markets and Stock broking.
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