Gold Prices Up In Asia As Dollar Weakens Slightly To Support Physical Market – Gold prices rose in Asia on Wednesday with a slightly weaker dollar aiding sentiment. Overnight, gold prices fell to three-week lows as the dollar moved off lows shrugging off weaker economic data. The dollar moved off session lows, pressuring gold prices despite a pair of bearish reports pointing to weakness in the economy. The trade deficit — which measures the gap between what the United States imports and what it exports — widened to $53.1 billion in December, up $2.7 billion from November. Dovish commentary from St. Louis Federal Reserve president James Bullard, meanwhile, did little to stem losses in the yellow metal. Bullard said that he favors low rates for an extended period, and warned that nominal wages were not a good predictor of inflation. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A fall in the dollar makes gold cheaper for holders of foreign currency and thus, increases demand.
Copper prices dropped as global stock markets plunged for a fourth day, prompting investors to cut exposure to riskier assets and strengthening the dollar – Copper on MCX settled down -0.76% at 452.85 as global stock markets plunged for a fourth day, prompting investors to cut exposure to riskier assets and strengthening the dollar. Expectations of strong demand for metals were supported by data showing that German industrial orders rose more than expected in December. Traders noted that the import window for copper into China is open, potentially supporting prices. One saw limited inflows given traders will not want to risk holding stock over the Lunar New Year holidays which start Feb. 15. China’s refined copper output jumped by 16.7 percent year on year to a record high in December, as smelters looked to churn out as much metal as possible ahead of a fall in treatment charges for copper concentrate. The world’s biggest copper consumer produced 865,000 tonnes of refined copper last month, beating the previous high of 833,000 tonnes set in December 2014, according to data from the National Bureau of Statistics. The December volume was up 10 percent from November, according to the data. Annual refined copper output also hit a record at 8.89 million tonnes.
Oil rises on report of lower U.S. crude inventories, stock market recovery – Oil prices rose on Wednesday amid a share market recovery and supported by a report that U.S. crude inventories fell last week, although analysts warned that soaring U.S. output and a seasonal demand drop could soon weigh on crude.The higher oil futures came after stock markets recovered some of their steep losses of previous days.A group of oil producers around OPEC and Russia has been withholding supplies since last year in order to tighten supplies and prop up prices. The cuts are set to last through 2018. “Evidence points to a global inventory market that has arguably already balanced – with days of forwarding cover in the low single digits or possibly even lower – which should support the spot price going forward,” said Richard Robinson, manager of the Ashburton Global Energy fund.
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