- Gold fell on Monday in line with a retreat in oil prices, giving up some of last week’s gains, but moves were range bound in thin liquidity in a holiday-shortened week.
* Gold rose nearly 1 percent during Christmas week, but remains on track to fall for a sixth successive quarter, its longest run of quarterly losses since the mid-1970s. It is down nearly 10 percent this year. Prices hit their lowest since early 2010 this month in anticipation of the first U.S. interest rate rise in nearly a decade. Though gold recovered lost ground in the wake of the announcement as dealers holding short positions covered, it remains under pressure, awaiting more clues on monetary policy.
* Oil prices fell 3 percent after the long Christmas weekend, pressuring global equities lower. Gold is positively correlated to oil as the metal is seen as a hedge against petroleum-led inflation. Interest in gold was muted in the major bullion-buying centers in Asia overnight, dealers said, though data showed China’s net gold imports from Hong Kong rose month/month in November as prices fell to multiyear lows. .
We expect gold prices to trade negative on the back of US interest rate outlook.
Silver posted the biggest declines of the main precious metals, down 3.3 percent at $13.87 an ounce.
We expect silver prices to trade negative on the back of US interest rate outlook.
* Oil fell more than 3 percent on Monday, with global benchmark Brent back near 11-year lows as last week’s short-covering dried up and players worried that crude prices had more room to swoon in the new year.
* Crude futures slumped in Asian trading as Japanese data showed a 46- year low in oil sales in the world’s fourth largest crude buyer. They slid more in the New York session, as some traders reckoned the two-day pre-Christmas rebound, where crude rose about $2 a barrel, had been overdone.
* Figures from the Organization of the Petroleum Exporting Countries imply an oil glut of more than 2 million barrels per day, equal to more than 2 percent of world demand. Crude prices have plunged nearly 70 percent from highs above $100 a barrel in June 2014 after OPEC, led by top exporter Saudi Arabia, dropped its longstanding policy of cutting output to support prices in favour of defending market share. While the collapse has partly achieved OPEC’s goals by curbing growth of competing supplies, it has also put the finances of oil producers under strain.
* Riyadh plans spending cuts and non-oil revenue raising methods to manage a record state budget deficit while state-owned oil firm Saudi Aramco pumps away.
We expect crude oil prices to trade negative on the back of renewed concerns on global supply glut.
* U.S. natural gas prices settled up 10 percent on Monday, posting their largest one-day gain in two months as forecasts for colder temperatures led to bets that long-delayed winter weather was finally arriving.
* Gas futures on New York Mercantile Exchange rallied for a third straight day, breaking forcefully from 16-year lows hit 10 days ago on fears of oversupply in the fuel, used for both heating and power generation, amid mild temperatures.
We expect Natural gas prices to trade positive on the back of expectations of colder than expected winter forecast.
LME was closed on account of Boxing day.
We expect base metal prices to trade mostly negative on the back of china slowdown concerns.
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