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| CapitalStars Investment Adviser |
Gold Prices Edge Lower After Fed Comments - Gold Prices were slightly lower on Wednesday and hovered near a one-year low as the dollar strengthened following Federal Reserve Chairman Jerome Powell’s comments on Tuesday that reinforced views the central bank is on track to gradually raise interest rates. A U.S. central banker said on Tuesday that the Fed should ease away from money policy accommodation and raise interest rate to avoid inflation as data showed the U.S. economy has improved in recent months. "At a time of full employment with price stability, policy should be a neutral influence on economic activity," Kansas City Federal Reserve Bank President Esther George said in remarks prepared for delivery to an agricultural symposium. "Gradual further increases in our policy rate will be necessary to return policy to a neutral stance, although there is considerable uncertainty about exactly how far or fast we need to go."
Copper prices edged lower pushed down by a stronger dollar and fears that demand will be damaged by a global trade war and weaker economic growth in China - Copper on MCX settled down -0.85% at 417.85 on fresh selling tracking weakness from LME copper prices which was depressed by a stronger US dollar to a low of around $6,150/mt. However, we expect copper prices to see limited downward room in the short term as the union at Escondida rejected BHP’s offer and a threat of strike remains. While Concerns over the US-China trade disputes and weak Chinese economic data weighed on market sentiment and copper prices.
Zinc recovered on short covering after prices remained under pressure amid worries over Washington-Beijing trade war curbing demand - Zinc on MCX settled up 1.29% at 173 gained on short covering as support seen after LME zinc prices halted its downward trend while sentiments still remain weak with pressure from a rising US dollar. Zinc prices are likely to gain some support from shrinking social inventories across Shanghai, Guangdong and Tianjin. We expect the contract to strengthen today given LME zinc’s strong performance. Last night the US dollar index gained 0.48% to close at 94.96 on Federal Reserve Board chairman Jerome Powell's remarks that back more rate increases as the economy is growing "considerably stronger".
Oil prices drop amid surprise jump in U.S. stockpiles - Oil prices dropped on Wednesday after an industry group reported that U.S. crude inventories rose last week, defying analyst expectations for a significant reduction.U.S. West Texas Intermediate crude was down 36 cents, or 0.5 percent, at $67.72. It settled up 2 cents at $68.08 a barrel the session before, coming off a nearly one-month low. The benchmarks had steadied after big declines on Monday and last week as supply disruptions in Venezuela came to the fore and as analysts had been forecasting a decline of 3.6 million barrels in U.S. inventories for the week through July 13. But the specter of oversupply quickly returned, with a rise of more than 600,000 barrels in U.S. crude stockpiles, reported by the American Petroleum Institute late on Tuesday.
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