Daily Metal and Energy Outlook 16 April 2019
BULLION – Gold slipped for a fourth straight session on Tuesday as optimism over the U.S.-China trade talks helped investors retain risk appetite despite dismal quarterly results from Wall Street. Spot gold was down 0.1 percent at $1,286.38 per ounce, as of 0120 GMT. In the previous session, the bullion dropped to $1,281.96, its weakest since April 4. U.S. gold futures shed about 0.2 percent at $1,289.20 an ounce. The U.S.-China trade dispute, signs of slowing global corporate earnings and business investment have all put pressure on riskier assets in the past year, so investors have been quick to lap-up positive news. SPDR Gold Trust, the world largest gold-backed exchange-traded fund, said its holdings fell 0.50 percent to 754.03 tonnes on Monday from 757.85 tonnes on Friday. Yesterday, Gold prices fell back on upbeat comments from Chicago Fed President Evans who said the U.S. economic data has “strengthened a little bit in recent weeks” and fundamentals “continue to be quite good.” The hawkish comments from Evans bolster the outlook for additional Fed rate hikes and were negative for metals prices. May silver recovered from a 3-1/2 month low Monday and settled higher on stronger-than-expected U.S. economic data that is positive for industrial metals demand after the Apr Empire manufacturing survey of general business conditions index rose +6.4 to 10.1, stronger than expectations of +4.3 to 8.0. On MCX.
ENERGY- Oil prices edged down on Tuesday after a Russian minister said the nation and OPEC may boost crude output to fight for market share, checking a recent sharp rally driven by tighter global production. Brent crude oil futures were at $71.08 a barrel at 0111 GMT, down 10 cents, or 0.1 percent, from their last close. Brent ended down 0.5 percent on Monday. U.S. West Texas Intermediate (WTI) crude futures were at $63.39 per barrel, down 2 cents, or 0.1 percent, from their previous settlement. WTI fell 0.8 percent on Monday. Russian Finance Minister Anton Siluanov said over the weekend that Russia and OPEC may decide to boost production to fight for market share with the United States, but this would push oil as low as $40 per barrel. U.S. natural gas futures fell to a two-month low on Monday on forecasts for warmer weather and lower than previously expected heating demand next week. That decline came despite an increase in liquefied natural gas exports with the return of two liquefaction trains at Cheniere Energy Inc’s LNG.A Sabine Pass LNG export terminal in Louisiana late last week. The natural gas market has become much less volatile over the past couple of months just like last year as the weather moderates for the spring amid a widely held expectation that record and growing production will meet any increase in demand.
BASE METAL – Base metals prices may trade with sideways bias. On the international market, most industrial metals on Tuesday were trading in a tight range, as investors exercised caution, waiting for growth data from China to be released later this week. China is scheduled to release a bundle of economic data on Wednesday, including the first-quarter economic growth figure. China first-quarter economy growth likely cooled to the weakest pace in at least 27 years, a Reuters poll showed, but a flurry of measures to boost domestic demand may have put a floor under slowing activity in March. Secondly, Reuters expect China to report gross domestic product (GDP) grew 6.3 percent in the January-March quarter from a year earlier, the slowest pace since the first quarter of 1992, the earliest quarterly data on record. March data will provide more details on the health of China domestic demand, covering industrial output, retail sales, property sales and investment, and fixed asset investment. Three-month copper on the London Metal Exchange eased 0.1 percent to $6,475 a tonne by 0153 GMT, while aluminium edged down 0.1 percent and nickel was almost unchanged. London zinc dipped 0.4 percent, on track for a second straight fall, while the most-active zinc contract in Shanghai Futures Exchange (ShFE) dropped 1.1 percent. Zinc inventories in LME-approved warehouse as of Friday shot up 7.5 percent from a day earlier to near a three-week high of 56,125 tonnes, latest data showed. On-warrant zinc stocks in warehouses tracked by ShFE also marked a 7-percent daily increase on Monday to 51,976 tonnes.
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