Gold held near a two-month low on Wednesday, under pressure from an advancing dollar ahead of a vote on the U.S. tax reform plan, but a potential government shutdown lent support to prices.
BULLION : – Gold held near a two-month low on Wednesday, under pressure from an advancing dollar ahead of a vote on the U.S. tax reform plan, but a potential government shutdown lent support to prices. Spot gold had inched 0.1 percent lower to $1,264.260 an ounce after it hit its weakest since Oct. 6 in the previous session. The dollar index firmed on uncertainty around a possible U.S. government shutdown if lawmakers fail to reach a budget accord before a Friday deadline. In November, gold traded in its narrowest range in 12 years. Meanwhile, the Republican-controlled U.S. House of Representatives voted on Monday to go to conference on tax legislation with the Senate, moving Congress another step closer to a final bill. Adding pressure on gold was market expectation that the U.S. Federal Reserve is almost certain to raise interest rates next week at its final monetary policy meeting for the year. Gold is highly sensitive to rising U.S. rates, as these lift the opportunity cost of holding non-yielding bullion while boosting the dollar, in which it is priced. Meanwhile, holdings in the world’s largest gold-backed exchange-traded fund, SPDR Gold Trust, fell on Tuesday. But a November reading of global holdings of gold-backed ETFs showed they rose by 9.1 tonnes to 2,357 tonnes, with net inflows coming entirely from Europe as the dollar fell, the World Gold Council said. Among other precious metals, silver fell 0.4 percent to $16 an ounce,after hitting its lowest since mid-July in the previous session.
ENERGY :- Oil fell more than2 percent on Wednesday after a sharp rise in U.S. inventories of refined fuel suggested demand may be flagging, while U.S. crude production hit another weekly record. Government data showed that U.S. crude stocks fell 5.6 million barrels, more than expected, though that was partially the result of the closure of the Keystone pipeline after a leak in South Dakota in mid-November, which cut flows to Cushing, Oklahoma. That line reopened Tuesday. However, gasoline stocks rose by 6.8 million barrels and distillate inventories were up 1.7 million barrels, both exceeding expectations. That hit prices of both crude and products in a market which is already heavily tilted bullish and thus potentially vulnerable to a selloff. Gasoline stocks tend to build in December, but at 221 million barrels of inventory, stocks are slightly above the five-year average for this time of year. U.S. crude production rose to 9.7 million barrels per day, another weekly record, though short of all-time records reached in the 1970s. That increase may undermine efforts by global producers to cut supply.
BASE METAL : – Copper steadied on Wednesday after sharp falls in the previous session, while other metals fell on concerns that China could see a weaker first half of 2018 and as investors looked to reduce their long exposure before the end of this year. Three-month copper on the London Metal Exchange ended up 0.1 percent at $6,550 a tonne, having plummeted 4.2 percent on Tuesday, its steepest daily drop since July 2015. Zinc, used to galvanise steel, hit its lowest since mid-October at $3,068 a tonne; nickel, used mainly in stainless steelmaking, hit its weakest since early October at $10,755, while aluminium hit its weakest since early August at $2,015.50. A raft of Chinese data in coming weeks is expected to show that the world’s second-largest economy came under growing pressure in November as the government intensified crackdowns on polluting industries and financial risks. Chinese steel futures dropped more than 3 percent on Wednesday after recent sharp gains that lifted prices to their strongest level in three months, although firm demand and tight supply kept investor sentiment upbeat. In other news, The Tanzania-Zambia Railway Authority (TAZARA) has suspended all train services, including the transportation of copper, following a strike by workers in Africa’s No. 2 producer of the metal.
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