BULLION – Gold prices rose in the previous session as President Donald Trump admitted to being the current obstacle to a trade deal with China as he mentioned in an interview thats me right now thas holding up the deal he mentioned to the reporters at the White House that, he needed Beijing to agree to four or five major points, without specifying what they were, these remarks dampened risk appetite, pushing global equities lower and benefiting the safe-haven precious metal. Expectations that the two leaders will be able to reach a deal at the G20 summit on June 28-29 have been waning by the day. On the data front, weekly jobless claims rose to 222K jobs as against the previous number of 219K. Today, market participants will be focusing on the retail sale number and better-than-expected number could keep gains capped for precious metals. Ahead of the important FOMC policy statement investors will be a little cautious.
ENERGY-Oil prices rallied by 2% in yesterdays session after attacks on two oil tankers in the Gulf of Oman stoked concerns of reduced crude trade flows through one of the worlds key shipping routes. The attacks near Iran and the Strait of Hormuz reignited worries about an impact to flows from the Middle East if insurance companies begin to reduce coverage for voyages through the region. OPEC monthly report showed that OPEC brought its oil production down to 29.876 Mbpd in May, a five-year low for the oil cartel as it struggles to control member production to keep oil prices out of the doldrums. OPEC cut its forecast for growth in global oil demand due to trade disputes and pointed to risk of a further reduction, building a case for prolonged supply restraint in the rest of 2019. Natural gas prices tumbled despite a smaller than expected. Stronger future production forecast by EIA in their Short-term Energy outlook put downward pressure on prices. The weather is expected to be normal over next 2-weeks which will likely have a limited effect on price of natural gas. At the beginning of Hurricane season there are current no active storms in Atlantic.
BASE METAL – Copper prices rose and headed for their first weekly gain in nine weeks, on concerns that supply would tighten further as unionized workers at a Codelco mine decided to strike after a labor deal fell through. Latest data showed, copper inventories at warehouses tracked by the LME jumped to 248,550 tonnes as of Wednesday, the highest since September 2018. Other industrial metals except copper came under pressure in the latter half of the session amid a lack of progress in resolving the U.S.-China trade dispute. Data from China released earlier this week showed the worlds largest vehicle market in May had its worst-ever monthly automobile sales drop and factory inflation slowed during the same period as faltering manufacturing hit demand.
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