Gold Prices Fall As Dollar Rises Following Release Of Fed Minutes – Gold prices were trading lower on Thursday, weighed down from fresh gains in the dollar as it traded near a one-week high against a basket of major currencies. The dollar extended its recovery and rose to an over one-week peak on Thursday, as the Federal Reserve’s latest comment solidified expectations of interest rate hike ahead after showing a more upbeat take on inflation and increasing confidence that economic growth would pick up steam. Fed policymakers would next meet on 20 March. Both the dollar and U.S. Treasury yields rose after the Fed minutes. In a rising interest rate environment, investor appetite for gold weakens as the opportunity cost of holding the precious metal increases relative to interest-bearing assets such as bonds.
Copper prices recovered on expectations that labor strife at copper mines this year would reduce supplies – Copper on MCX settled up 0.71% at 460.45 rallied on short covering in late session while in morning session prices traded in the range with volumes remain light as Chinese markets were closed on account of Spring Festival holiday. Prices got support after the update that the International Copper Study Group (ICSG) released preliminary data for November 2017. Also, World mine production is estimated to have declined by 2.4% in the first eleven months of 2017, with concentrate production declining by 2% and solvent extraction-electrowinning declining by 3.5%. The decline in world mine production was mainly due to 1.6% decline in production in Chile, the worlds biggest copper mine producing country which was negatively affected by the strike at the Escondida mine and lower output from Codelco mines. Reductions in concentrate production in Argentina, Canada, and Mongolia of 57%, 15.5% and 15% respectively were mainly due to lower grades in planned mining sequencing and Argentinas Alumbrera mine approaching the end of life. While level like 462-464 will act as strong resistance as the dollar hit a one-week high to a buoyant two-year Treasury note yield, which hit a nine-year high as traders awaited the release of the Fed minutes.
Oil Prices Down Again In Asia Morning As U.S. Dollar Continues To Recover – Oil prices are down again Thursday morning in Asia, driven by a stronger dollar which outweighed the effects of a decrease in U.S. crude oil inventories.The dollar rose beyond a one-week peak against other currencies on Wednesday, extending its recovery from three-year lows set last week as traders cut back on some of the bearish bets against the U.S. dollar. The strengthening dollar makes greenback-denominated oil imports more expensive for other countries, thus curbing demand and dragging prices down.The U.S. is still expected to continue increasing its production, as it has done by more than 20% since mid-2016 to more than 10 million barrels per day (bpd). At this rate of production increase, the U.S. is set to overtake Russia in crude oil output by late 2018, making it the largest global supplier.
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