BULLION – Bullion counter may witness some profit booking at higher levels. Gold prices continued to rise recently as the protracted trade war between the United States and China intensified after Washington designated Beijing a currency manipulator, prompting a flight towards safe-haven assets. The U.S. Treasury Department said on Monday it had determined for the first time since 1994 that China was manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing. The U.S. action comes after China allowed its yuan to weaken past the key 7-per-dollar level on Monday for the first time in more than a decade, following Trump’s decision to impose 10% tariffs on $300 billion of Chinese imports, ending a month-long trade truce. Gold priced in sterling soared to a record high on Monday, spurred by fear of a disorderly British exit from the European Union amidst trade tensions.
ENERGY– Crude oil may trade on firm path as oil prices edged up on Tuesday, but remained under pressure as the escalating U.S.-China trade war stoked concerns over global economic growth and future demand for crude. The international benchmark fell more than 3% on Monday as traders worried the ongoing trade tensions between the world two biggest oil buyers would dent appetite for fuel. A yearlong U.S.-China trade war boiled over as Washington accused Beijing of manipulating its currency after China let the yuan drop to its lowest point in more than a decade. Iran seizure of the Iraqi oil tanker had raised some concerns about potential Middle East supply disruptions in the Gulf. Concerns that the trade conflict has entered a phase of retaliatory action were weighing down on the sentiments in the oil market, which at the moment is taking lesser notice of the Middle East tensions. U.S. natural gas futures fell to a fresh 38-month low on Monday after production rose to record highs over the weekend and the amount of gas flowing to the nation’s liquefied natural gas (LNG) export terminals dropped.
BASE METAL – Base metals may trade on sideways to weaker path. London copper fell for the sixth straight session on Tuesday, hovering around a two-year low, as a year-long U.S.-China trade war escalated and the Chinese offshore yuan fell to an all-time low. Proposed U.S. tariffs against the European Union over aircraft subsidies could concentrate market control over some supplies of copper alloy in the hands of a German-owned firm and hurt American businesses, U.S. industry players said. BHP Group is expanding its nickel business and plans to ramp up sales for the fast-growing electric vehicle sector. Russian aluminium producer Rusal suspended operations at its Achinsk alumina plant on Monday and evacuated all but essential staff after a fire broke out a nearby Russian military base, Rusal said.
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