BULLION – Gold prices consolidated a bit after hitting highest level in 15 months following uncertainty related to ongoing negotiation between US-China and US-Mexico. Yesterday, US President Trump again tried to put further pressure on China saying that, if Chinese President XI does not attend the G20 meeting, increased tariffs will be implied on the remaining $300 billion worth goods as well. Market might give some reaction on this new update, due to this ongoing war we also saw China gold reserve increase for the 6th consecutive month in May. On the Economic calendar US PPI data is expected today, although all eyes are waiting for the interest rate decision by the Fed in their policy meet next week. Speculators raised net long position in COMEX gold in the week ended June 4, data from the U.S. Commodity Futures Trading Commission (CFTC) showed on Friday.
ENERGY- Copper rose for second successive session after US struck a deal to avert a tariff war with Mexico, boosting sentiment on trade and easing concerns about a global slowdown. The US dropped its threat to impose tariffs on Mexico in a deal to combat illegal migration from Central America, helping to calm markets already worried about the China-U.S. trade war. Rare earth exports by China, the world dominant producer, fell 16% in May from a month earlier amid an increased focus on the raw materials due to the Sino-U.S. trade war. According to official customs data, China unwrought copper imports fell 10.9% from the previous month to 361,000 tns in May. Arrivals of unwrought copper, including anode, refined and semi-finished copper products were down from 405,000 tns in April and down 23.2% from 470,000 tns in May 2018. For the day, volatility for base metals could remain low ahead of important inflation number that will be released tomorrow from China.
BASE METAL – Oil prices traded choppy as Saudi Arabia and Russia had yet to agree on extending an output-cutting deal and U.S.-China trade tensions continued to threaten demand for crude. Saudi Energy Minister Khalid al-Falih reported that Russia was only oil exporter still undecided on need to extend the output deal agreed by top producers. Meanwhile, Russia on Monday said it might support an extension of supply cuts that have been in place since January, warning oil prices could fall as low as $30 per barrel if producers supply too much crude. On trade war front, President Donald Trump said on Monday that he stands ready to hit China with more tariffs on at least $300bn worth of goods if he and China’s President Xi Jinping are unable to come to a trade deal later this month at the G20 summit in Japan. China foreign ministry said that China is open for more trade talks with Washington but has nothing to announce about a possible meeting.
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