Precious metals are likely to open flat and have been finding support at lower levels as the dollar has failed to move higher despite better employment data that came out last week. Data showed that employers added 209k jobs last month and June's employment gain was revised up to 231k. The unemployment rate touched a 16-year low of 4.3% while wage growth was better than expected at 2.5% y/y. Other economic data last week was however disappointing as the ISM services PMI fell to 53, the lowest since August 2016. Two Federal Reserve officials that spoke yesterday acknowledged that low US inflation was a problem. The core PCE price index has been running at 1.5% this year. December rate hike odds are back near 42% after a small increase post the jobs data. The focus will be on US inflation data this week which could give direction to the dollar. In the meanwhile, gold and silver prices could remain confined in a small range before we get more triggers.

Base Metals 

Base metals prices rallied, with some metals rallying to multi year highs. Copper prices hit 2 year peaks on Monday as soaring steel and iron ore prices in China brightened the outlook for growth and industrial demand in the China. Chinese rebar steel futures surged as much as 7% to their highest in more than four years on expectations of reduced supply in the winter due to Beijing-imposed capacity curbs. China had a $25.2 billion trade surplus with the United States in July, down slightly from $25.4 billion in June, which was the highest since October 2015.

Energy 

Crude oil prices are likely to open flat after yet another choppy session and prices rebounded sharply from lows once again yesterday. Markets will await comments from the ongoing OPEC review meeting in Abu Dhabi. Libya's Sharara oil field, which produces 270,000 bpd, was facing a gradual shutdown yesterday but is returning to normal. Prices found support last week as oil rigs in the US fell for the second time in three weeks. Iraq's oil exports fell to 3.23 million bpd in July from 3.27 million bpd in June. On the upside, prices faced resistance as crude oil exports by the OPEC rose to a record high in July, touching 26.11 mbpd due to a jump in Nigerian exports.