BULLION – Bullion counter may continue its last week upside rally as gold prices rose to near six-year highs and the dollar fell to a three month low against a basket of currencies. Central banks have dominated economic news this week, with the Federal Reserve signaling the potential for a U.S. interest rate cut later this year and the European Central Bank hinting at stimulus measures. U.S.-China trade tensions were also in focus ahead of an expected meeting between the countries two leaders next week at a G20 meeting in Osaka, Japan. U.S. Vice President Mike Pence called off a planned China speech that had been initially cast as a sequel to a blistering broadside he delivered in October, a move aimed at averting increasing tensions with Beijing. Trump said he had aborted a military strike on Iran because such a response to Tehrans downing of an unmanned U.S. surveillance drone would have caused a disproportionate loss of life.
ENERGY– Crude oil may witness upside movement as oil prices climbed on Monday as tensions remain high between Iran and the United States, with U.S. Secretary of State Mike Pompeo saying significant sanctions on Tehran would be announced. U.S. President Donald Trump said last week that he called off a military strike to retaliate for Irans downing of an unmanned U.S. drone, and he said on Sunday that he was not seeking war with Iran. Oil prices surged last week after Iran shot down a drone that the United States claimed was in international airspace and Tehran said was over its territory. Amid the escalating tensions Brent racked up a gain of about 5% last week, its first weekly gain in five weeks, and WTI jumped about 10%, its biggest weekly percentage gain since December 2016. Trump said he had aborted a military strike on Iran because such a response to Tehrans downing of the unmanned U.S. surveillance drone would have caused a disproportionate loss of life. Iranian officials told Reuters that Tehran had received a message from Trump through Oman overnight warning that a U.S. attack on Iran was imminent.
BASE METAL – Base metals may trade with upside bias. Copper prices hovered near a one-month high hit last week as mining disruptions in key producer Chile stoked supply concerns, amid escalating U.S.-Iran tensions. Labor unions at Chile’s Chuquicamata copper mine voted on Saturday to reject the latest contract offer of government controlled mining company Codelco, and to continue the week-long strike at the sprawling production site. The Chinese environment ministry has granted 123 companies quotas to import types of scrap metal that will otherwise be off-limits from July 1, including around 240,000 tonnes of copper scrap. Premiums for Japanese aluminium shipments for July to September were set at $108 per tonne, up 3% from the current quarter, as tighter supply in Asia outweighed fears over weakening demand, five sources directly involved in the pricing talks said.
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