Gold prices fell as the dollar rebounded from over three-year lows hit last week – Gold on MCX settled down -0.68% at 30532 as the dollar remained strong on rising Treasury yields, while investors awaited the minutes of the U.S. Federal Reserve’s last policy meeting for cues on the pace of interest rate hikes this year. The dollar continued its rebound from three-year lows as investors shrugged off worries about the U.S. budget deficit and focused on large U.S. government debt auctions this week. The Fed will release the minutes of its Jan. 30-31 policy meeting on Wednesday. The meeting was held during last month’s drop in equity markets and investors are interested in its response to the market gyrations as well as the rate outlook. The U.S. Treasury Department on Tuesday sold record amounts of three-month and six-month bills at the highest interest rates for these maturities at auctions in more than nine years, Treasury data showed.
Copper traded in the range largely prices remain unchanged in extremely light trading volumes as the Shanghai Futures Exchange is closed – Copper on MCX settled down -0.02% at 457.20 traded in the range largely prices remain unchanged in extremely light trading volumes of less than 1000 lots as the Shanghai Futures Exchange is closed for the Lunar New Year. While upside was capped and sentiments remain weak as a firm dollar dictated the direction in a thinly traded market, with holidays in top metals user China. The dollar steadied after pulling ahead from a three-year low against a currency basket the previous day, though it was dogged by growing concerns a ballooning fiscal deficit in the US could disrupt the economy. Copper registered falls from yesterday after reports that Indonesia had let Freeport start shipping copper concentrates from its Grasberg mine for another year. In the week ahead, investors will focus on minutes of the Fed’s latest policy meeting with hopes the central bank will give more hints
on the pace of future rate hikes this year.
Oil dips as U.S. dollar firms, oil production is expected to rise – Oil prices fell on Wednesday, weighed down by the rebound of the U.S. dollar further away from three-year lows hit last week. An expected rise in U.S. oil production also weighed on prices, traders said.Traders said the declines were driven by a recovery in the dollar, which potentially hits fuel demand as it makes greenback-denominated oil imports more expensive for countries using other currencies. The dollar index, which measures the greenback against a basket of six major currencies, rose for a second day on Wednesday, moving further away from the three-year lows reached last week as traders shaved off some bearish bets against the U.S. currency. “The U.S. dollar continues to find a firmer footing,” said Stephen Innes, head of trading for Asia-Pacific at futures brokerage OANDA in Singapore.
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