Daily Metal and Energy Outlook 18 April 2019
BULLION – Gold prices on Thursday touched their lowest this year, and were on course for a fourth straight weekly decline, as recent economic data drove investors towards riskier assets, with traders eyeing clues to gauge the health of global economy. Spot gold was down 0.1 percent at $1,272.33 per ounce, as of 0147 GMT, having touched $1,271.71 earlier in the session, its lowest since Dec. 27, 2018. U.S. gold futures dipped 0.2 percent lower to $1,274.50 an ounce. Economic data from China tempered concerns about global growth and took the sheen off safe-haven bullion. China economic growth in the first quarter remained steady at 6.4 percent, topping expectations for a 6.3 percent expansion. The data boosted global appeal for riskier assets Investors’ immediate focus turned to the release of Purchasing Managers Indexes (PMIs) for the manufacturing and service sectors in Europe later in the day to provide more clues on the strength of the euro zone economy. In news, the U.S. Federal Reserve said on Wednesday it found economic activity in the country grew at a slight-to-moderate pace in March and early April. Secondly, the U.S. trade deficit fell to an eight-month low in February as imports from China plunged, temporarily providing a boost to President Donald Trump’s “America First” agenda and economic growth in the first quarter.
ENERGY- Crude Oil prices edged down on Thursday despite a surprise decline in U.S. inventories, with international benchmark Brent retreating from a five-month high touched in the previous session. Brent crude futures were at $71.51 a barrel at 0056 GMT, down 11 cents, or 0.2 percent, from their last close. Brent fell 0.1 percent on Wednesday, after earlier touching its highest since Nov. 8 at $72.27 a barrel. U.S. West Texas Intermediate (WTI) crude futures were at $63.67 per barrel, down 9 cents, or 0.1 percent, from their previous settlement. WTI closed the last session down 0.5 percent. U.S. crude inventories fell by 1.4 million barrels in the week to April 12, compared with analyst expectations for an increase of 1.7 million barrels. Net U.S. crude imports last week dropped by 659,000 barrels per day (bpd). U.S. natural gas futures plunged on Wednesday to their lowest since June 2016, as near-record production and forecasts for lower heating demand in the next two weeks allow utilities to stockpile gas, helping inventories rebound from unusually low levels. Ahead of weekly data on Thursday, market participants said utilities likely added a much bigger than normal 87 billion cubic feet (bcf) of gas to inventories during the week ended April 12. Front-month gas futures for May delivery on the New York Mercantile Exchange fell 5.5 cents, or 2.1 percent, to settle at $2.517 per million British thermal units (mmBtu), the lowest since June 8, 2016.
BASE METAL – Base metal counter are expected to trade sideways with downside getting capped owing to optimistic sentiments prevailing on the international market. China’s economy grew at a steady 6.4 percent pace in the first quarter, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement. Copper prices hit a nine-month high on Wednesday as firmer-than-expected economic growth figures from China boosted expectations for higher demand in the world’s top metals consumer. Benchmark copper touched its highest since July 3 at $6,608.50 per tonne before finishing up 0.9 percent at $6,556. China’s economy grew at a 6.4 percent pace in the first quarter from a year earlier, defying expectations for a further slowdown, as industrial production jumped sharply and consumer demand showed signs of improvement. Shanghai nickel and zinc fell 1.1 percent and 0.8 percent, respectively, mirroring a decline in the Chinese ferrous complex. Lead was also down. China’s aluminium production fell 3.6 percent on a daily basis in March from the previous two months to its lowest rate since October, pressured by winter curbs on industry and low prices. This pushed Shanghai aluminium up as high as 13,995 yuan ($2,092.59) a tonne, its highest intraday level since December.
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