BULLION – Bullion counter may trade on sideways path. Gold prices eased on Monday, following a sharp fall in the previous session, as a strong U.S. jobs report tempered expectations of an aggressive interest rate cut by the Federal Reserve later this month. Nonfarm payrolls increased by 224,000 jobs last month, the most in five months, the U.S. Labor Department reported on Friday. Expectations for a Fed rate cut narrowed with the market now pricing a 27 basis points easing this month, from 33 basis points prior to payrolls. Domestic gold prices in India jumped to a record on Friday following an unexpected increase in import duty in the country’s budget, hitting demand and forcing dealers to offer the highest discount in nearly three years. China’s gold reserves rose to $87.27 billion at the end of June from $79.83 billion at the end of May.
ENERGY– Crude oil may trade on stronger path as crude prices rose on Monday, adding to gains in the previous session on better than-expected U.S. jobs data, although gains were tempered by worries over the prolonged Sino-U.S. trade war. Both oil benchmarks fell last week as concerns about a slowing global economy outweighed risks to supply. Brent fell more than 3% and WTI shed more than 1.5%.U.S. job growth rebounded strongly in June, with government payrolls surging, the Labor Department closely watched employment report showed on Friday, suggesting May sharp slowdown in hiring was probably a one-off. Employers added 224,000 jobs last month, the most in five months, the report showed. The lack of concrete progress in resolving the acrimonious trade war between the United States and China, however, means the bar could be very high for the U.S. Federal Reserve not to lower borrowing costs at its July 30-31 policy meeting. Oil received some support from simmering tensions over Iran and after an extension last week to output cuts by OPEC and its allies. U.S. natural gas futures jumped to an over one-month high on Friday as weather forecasts turned hotter, overshadowing a surge in gas production.
BASE METAL – Base metals may trade with sideways to upside path. Copper prices dropped on Monday on inventory pile-up amid a steady dollar after strong U.S. jobs data led to tempered expectations of an aggressive rate cut by the Federal Reserve. Copper inventories in warehouses approved by the London Metal Exchange (LME) touched a near 13-month high at 302,975 tonnes on Thursday, data released last week showed. The differences between cash zinc and three-month contract flipped to a discount of $3 a tonne on Friday after holding in premiums zone in nearly five months, suggesting greater availability of nearby supply. ShFE zinc hit a six-month low of 19,265 yuan a tonne, tracking falls on the LME in the previous session on rising supply concerns. LME zinc, however, rebounded 0.3% after hitting its lowest since Jan. 3 on Friday.
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