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Commodities: Gold retreats from two-month highs as tensions calm

By Digital Look

Date: Tuesday 15 Aug 2017

Commodities: Gold retreats from two-month highs as tensions calm

(ShareCast News) - Monday saw gold selling off from recent highs as tensions between the US and North Korea seemed to simmer down over the weekend.
Investors saw this as a good opportunity to take some profits after pushing the precious metal to near two-month highs seen on Friday.

By 1600 BST, spot gold was trading 0.37% lower on the day at $1,284/oz. as gold futures for December delivery fell 0.5% to $1,287. The US dollar was also seen broadly strengthening, which gave investors slightly more incentive to take advantage of the timing.

David Madden of CMC Markets said, "Gold has turned lower today as investors adopt a more risk-on attitude. The metal was given a major boost last week because of the sell-off in global stocks, and now we are seeing funds flow the other way."

In other precious metals, spot silver was down 0.05% to $17.10, platinum was down 1.24% to $971/oz. and palladium was up 0.41% to $897.6/oz.

Energy markets saw a significant drop in spot WTI crude on Monday of 1.19% to $48.35 a barrel and a similar drop of 1.14% in Brent crude to trade at $51.29.

Oil futures have recently been given a helping hand to trade above $50 thanks to efforts by OPEC (Organisation of Petroleum Exporting Countries) and other oil producers to limit output. Monday, however, saw oil prices reverse course on news that refinery runs in China dropped in July and that reduced demand is expected, as well as gains across global markets recovering from fears of a US/North Korean nuclear standoff.

Regarding recent Libyan oil production, analysts at Panmure Gordan wrote, "The recovery in Libyan production has been the single largest factor driving global supply growth in the last few months." Bob Yawger at Mizuho in New York had this to say on Libya,"It is back to the Libyan situation being the most important thing here," adding "You have Libyan barrels off the market, so supply is not what it was at this time last week."

In base metals, spot copper was marginally down 0.29% to $6,412/metric tonne on Chinese news that year on year industrial production was down 6.4%, below forecasts of 7.1%. Copper prices hit their highest level in more than two years on 9 August and are up almost 8% this quarter.

On the agricultural front, according to a Reuters poll of 10 analysts, the US Department of Agriculture's (USDA) weekly crop report should forecast that crops for soybean and corn would be rated 60% good to excellent. This should help bolster both crops which saw heavy drops on the 10 August. Monday's price action was fairly subdued with soybeans for November delivery down 1.26% to $9.34/ bushel and corn for September delivery also down 0.8% to $3.58.

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