Gold Prices Bounce Back on Softer Dollar Ahead of Fed – Gold prices bounced higher on Wednesday, as the U.S. dollar weakened ahead of the Federal Reserve’s highly-anticipated monthly policy decision due later in the day. Later Wednesday, the U.S. central bank was widely expected to leave interest rates on hold, but it was also likely to announce plans to trim its $4.2 trillion in bond holdings. The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, wasdown 0.13%at 91.62, the lowest since September 11. Gold is sensitive to moves in the dollar. A weaker dollar makes gold less expensive for holders of foreign currency. The precious metal also strengthened amid potentially higher tensions between the U.S. and North Korea following harsh statements from U.S. President Donald Trump. In his first speech before the United Nations General Assembly on Tuesday, Trump said”the United States has great strength and patience, but if it is forced to defend itself and its allies, we will have no choice but to totally destroy North Korea.”
Oil rises after Iraq signals possible OPEC cut extension – Oil prices rose on Wednesday after Iraq’s oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in U.S. inventories. While options being considered by the Organization of the Petroleum Exporting Countries and other producers include an extension of cuts in output by months, it is premature to decide on what to do beyond March, when the agreement expires, Iraqi oil minister Jabar al-Luaibi told an energy conference in the United Arab Emirates on Tuesday. OPEC and producers including Russia have agreed to reduce output by about 1.8 million barrels per day until March 2018 in a bid to reduce global oil inventories and support prices. Some producers think the pact should be extended for three or four months, others want an extension until the end of 2018, while some, including Ecuador and Iraq, think there should be another round of supply cuts, al-Luaibi said. But such moves are unlikely to have a big impact, said Georgi Slavov, head of research at commodities brokerage Marex Spectron. “Demand is not great for crude oil and I don’t see how this will change any time soon. We do not see stronger demand for Q4 2017, which means supply needs to be controlled even more tightly,” Slavov told a briefing in Singapore. “That won’t be easy as the productivity of oil rigs in the U.S. is expected to rise, so they can get more oil out of the same amount of rigs.”
SHFE Aluminum Leads Gains among Base Metals – All base metals on the SHFE ended today with gains, with aluminum performing the best. SHFE aluminum rose nearly 4% to the highest since Sept. 2011 following news that two producers in Henan began winter outs in advance. Two Producers in Henan Begin Winter Alumina and Aluminum Cuts Ahead of Schedule. Ferrous metals, by contrast, performed badly, going down after a low opening.
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