On Wednesday, gold prices increase in Asia with investors marking political risk and also observing copper on forecasts of strikes by workers in Chile at the world’s biggest miner.
Delivery of gold futures for April on the Comex division of the NYMEX edged up 0.03% to $1,211.75 a troy ounce. Also on the Comex, delivery of silver futures for March fell 0.15% to $17.517 a troy ounce and copper futures dropped 0.04% to $2.725 even with markets in China, the world’s top importer of the industrial metal, closed through Thursday to mark the Lunar New Year.
While the greenback staged a slight recovery in Asia on Wednesday with China manufacturing noted, however, attention turning the Fed Reserve statement following the current monetary policy review, though Fed Chair Janet Yellen is not set to hold a press conference.
Copper increased suddenly as union workers at Chile’s Minera Escondida, the largest copper mine in the world, are preparing to vote today on approving a strike as early as Friday after negotiations for a collective agreement seem to have fallen apart, according to reports. Escondida is majority possessed by BHP Billiton, with Rio Tinto holding a minority stake.
China’s official manufacturing Purchasing Managers’ Index (PMI) continued in expansion in January, as the mainland economy presented indication of stabilizing, reaching 51.3, slightly down from 51.4 in December, but still better than a Reuters poll predicting 51.2. A reading above 50 indicates expansion, while a reading below signals contraction.
Overnight, on Tuesday, the greenback held weaker with remarks on trade from the Trump administration weighing on sentiment and investors looking forward to the current Fed views on rates on Wednesday.
On Tuesday, gold made strong gains on political risk as U.S. trade policies came into focus again and investors were cautious ahead of the latest Fed views on rates scheduled this week.
On Tuesday, in North America, gold prices were sharply higher in the morning trade, extending overnight increased as the greenback dropped during uncertainty over President Donald Trump’s policies, as the president terminated acting U.S. Attorney General Sally Yates late Monday after she ordered Justice Department lawyers not to implement the travel restrictions.
In the meantime, after Peter Navarro, Trump’s top trade adviser, indicted Germany of currency exploitation, the greenback dropped back toward an eight-week low against a basket of major currencies The U.S. dollar index dropped 0.82% to 99.60. It recovered slightly in Asian trade.
Traders were now looking forward to the Fed Reserve’s two-day meeting on monetary policy starting on Tuesday for additional clues on the timing of the next U.S. interest rate hike. In January, CB consumer confidence declines more than anticipated to 111.8, lower than the expected 113.0.
The Fed Reserve indicated the previous month that at least three rate increases were in the near future for 2017. However, traders remained skeptical. Instead, markets are betting in just two rate hikes during the course of this year, according to the reports.
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