Gold Prices Look to Fed Policy Meeting for Range Break Catalyst:
Gold prices continued to echo swings in the US Dollar, with an inconclusive Monday session for the latter echoed in the former. On balance, lasting direction may not emerge until after Wednesday’s FOMC monetary policy announcement. In shaping the outlook for prevailing yields and the greenback, it will speak directly to the relative appeal of non-interest-bearing and anti-fiat assets epitomized by the yellow metal. Gold prices remain confined to a choppy range below the August 28 high at 1214.30.
The US is on the cusp of implementing tariffs of 10% on $200 billion worth of Chinese goods. While LME copper came off from earlier highs, it still stood above the 60-day moving average overnight. Global visible inventories extended their declines last week with SHFE stocks down 23,500 mt to 111,000 mt. Such low inventories could provide some support to copper prices. The SHFE 1811 contract is likely to pull back in the short term after it broke through the upper Bollinger band on Friday. Spot premiums are seen at 80-130 yuan/mt.
Oil Rises to within 4-Year High:
Crude Oil benchmark Brent rose for a second day on Tuesday, remaining within range of a four-year high reached during the previous session. Looming U.S. sanctions against Iran and the unwillingness or inability of the Organization of the Petroleum Exporting Countries (OPEC) and top oil producer Russia to raise output to offset the loss of Iranian supply have spurred prices higher. The United States from Nov. 4 will target Iran’s oil exports with sanctions, and Washington is putting pressure on governments and companies around the world to fall in line and cut purchases from Tehran.
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