Gold Prices Gain In Asia With China Trade Data Showing Surge In Imports – Gold prices gained in Asia on Thursday as investors noted January trade data on China showed a narrower than expected surplus even as imports soared. Overnight, gold prices fell to five-week lows as the dollar continued to advance amid a sharp uptick in Treasury yields. The United States 10-Year rose to four-year highs sparking a move higher in the dollar, pressuring gold to five-week lows following news that the Senate agreed on a budget deal. Senate leaders reached a major budget agreement that would increase spending caps, Majority Leader Mitch McConnell said Wednesday. Dollar-denominated assets such as gold are sensitive to moves in the dollar – A rise in the dollar makes gold more expensive for holders of foreign currency and thus, reduces demand. Also weighing on the yellow metal was a tick lower in safe-haven demand amid easing geopolitical uncertainty following reports that German Chancellor Angela Merkel’s Christian Alliance and the Social Democrats (SPD) agreed on a coalition deal, paving the way for a new government.
Copper eased despite a recovery in stock markets after their recent steep slide – Copper on MCX settled down -2.78% at 440.25 despite a recovery in stock markets after their recent steep slide. China’s foreign exchange reserves rose for a 12th straight month in January as further gains in the yuan currency and tighter regulations continued to discourage capital outflows. A pick-up in China’s economic growth and some progress in the government’s campaign to rein in financial risks have also helped bolster confidence in its currency, while new channels for foreign investors to invest money onshore have helped increase inflows. Reserves rose $21.5 billion in January to $3.161 trillion, compared with an increase of $20.2 billion in December, central bank data showed. It was the first time that China’s reserves have climbed for 12 months in a row since June 2014, and brought its stockpile — the world’s largest — to the highest since September 2016. Restrictions on industrial output this winter have affected some of China’s biggest copper smelters.
Crude Oil Stays Weaker In Asia Despite Record Imports By China In January – Crude oil shrugged off record imports by top buyer China in January reported on Thursday and stayed with a negative trend overnight in the US where fresh levels of shale output continue to come to the market as a counterweight to OPEC-led curbs.China’s China’s crude oil imports in January jumped 20% to a record 40.64 million metric tons, equivalent to 9.57 million barrels per day (bpd), up from around 7.94 million bpd in December and the previous high of 9.17 million bpd in March of 2017. Overnight, crude oil prices settled sharply lower after data showed US domestic oil supplies rose for the second straight week while domestic production rose further above 10 million barrels per day. The sharp build in product inventories such as gasoline and distillate comes amid a slowdown in refinery activity as refiners enter a period of maintenance. Subdued refinery activity lessened demand for crude oil, contributing to the recent build in inventories.
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