commodities tumble as gloom spreads
Last Updated : GMT 06:49:16
Arab Today, arab today
Arab Today, arab today
Last Updated : GMT 06:49:16
Arab Today, arab today

Dollar strength and China’s slowdown

Commodities tumble as gloom spreads

Arab Today, arab today

Arab Today, arab today Commodities tumble as gloom spreads

Traders work on the floor of the New York Stock Exchange
London - Arab Today

Commodity markets took a tumble this week on the strong dollar and Chinese demand fears, with major lows for copper, gold, crude oil and zinc.
The prices of many raw materials were hit by concerns over flagging demand arising from weak economic growth in key consumer China.

"What we have seen lately is that market concerns about US monetary tightening, dollar strength and China’s slowdown trump concerns about tightening supply-side fundamentals," said UniCredit analysts in a note to clients.

"That leaves the metals looking vulnerable on the downside in the short term.

"But that may lead to some metals getting oversold, thereby providing opportunities for prospective buyers."

The dollar raced higher on mounting expectations that the US Federal Reserve would raise interest rates from current near-zero levels in December.

- Metals collapse -

Copper collapsed on Friday to a six-year low at $4,787 per tonne, last witnessed in July 2009, as industrial metal prices were dented also by signs of slowing Chinese demand.

Zinc had slumped to a similar trough at $1,553 per tonne on Wednesday.

Precious metal gold forged a five-year nadir at $1,074 per ounce on Thursday.

The runaway dollar makes commodities priced in the US unit more expensive for holders of rival currencies, which tends to weigh on demand.

The euro had dived to $1.0675 on Tuesday, the lowest level since April.

"The inflated expectations that the Fed may raise US interest rates in December has punished gold and led to the precious metal plummeting to five-year lows," added FXTM analyst Lukman Otunuga.

"Dollar appreciation is also contributing to the gravitational pressures on the gold, leaving it depressed and open to further losses."

Global gold demand rose in the third quarter, led by a surge in US buying, as investors took advantage of a slump in prices, the World Gold Council said Thursday.
Total gold demand stood at 1,121 tonnes in the July-September period, an increase of 8.0 percent compared with the third quarter of 2014, the London-based WGC said in its quarterly update.

Meanwhile on Friday, oil prices sank to two-month lows, after the International Energy Agency said commercial crude stockpiles in developed nations had hit a record high 3.0 billion barrels.

The news, contained in an IEA report, stoked concerns over a global supply glut that had sparked the recent oil price collapse.

London Brent crude struck $43.57 per barrel on Friday and New York oil touched $40.36, levels last seen in late August.

- Oil supply glut -

Crude futures had already plunged Thursday as the weekly US stockpiles report showed soaring oil inventories, fuelling a global supply glut.

"US crude futures extended their losses ... pulled down on the supply side by a relentless climb in oil stockpiles," said ETX Capital analyst Dominic Stewart.

The US Department of Energy reported Thursday that commercial crude inventories in the world's top oil consumer grew by 4.2 million barrels last week.

That was far higher than analyst expectations of an increase of 1.3 million barrels, reinforcing projections that a supply glut will persist well into next year. The report also showed US crude oil production continued to climb.

Global oil demand growth has not been fast enough to soak up the excess in supplies and analysts say a rebalancing of the supply-demand situation is needed for a sustained uptick in prices.

Meanwhile on Friday, the IEA predicted world oil demand growth would slow to 1.2 million barrels per day in 2016, after a five-year high of 1.8 mbd this year.

Danske Bank analysts cautioned that commodity investors would remain focused on the US rate outlook.

"In the coming months (the) main focus ... will be on whether the Federal Reserve will hike its policy rate and the impact this will have on emerging markets and in particular China," they said, adding that "uncertainty is likely to continue to plague commodity markets in the near term".
Source: AFP

 

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

commodities tumble as gloom spreads commodities tumble as gloom spreads

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

commodities tumble as gloom spreads commodities tumble as gloom spreads

 



GMT 12:48 2016 Sunday ,27 November

Cilic, Dodig push Croatia to brink of Davis Cup

GMT 05:24 2017 Thursday ,28 December

Erdogan says 'terrorist' Assad cannot be part of Syria

GMT 12:59 2016 Saturday ,05 November

WB welcomes economic reforms in Egypt

GMT 18:40 2016 Saturday ,05 November

Egyptian GDRs in London down

GMT 10:57 2017 Wednesday ,06 December

Peru striker Guerrero has doping ban extended

GMT 17:51 2017 Tuesday ,07 March

Trump Signs New Travel Ban on Six Muslim Countries

GMT 10:30 2017 Wednesday ,06 September

Saudi Information Ministry praises media role during Hajj

GMT 15:29 2017 Tuesday ,24 January

Mind games really do help your brain

GMT 06:55 2015 Thursday ,01 October

Boston Red Sox beat Yankees

GMT 08:17 2017 Monday ,28 August

Bahrain celebrates World Humanitarian Day 2017

GMT 02:07 2017 Tuesday ,28 February

Opposition seeks Russian support at Syria talks
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

Maintained and developed by Arabs Today Group SAL.
All rights reserved to Arab Today Media Group 2021 ©

arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday