GOLD UP ON RISING US-NORTH KOREA TENSIONS | COMMODITY MARKET OUTLOOK 9 AUG 2017.

COMMODITY MARKET TREND NEWS

Precious Metals

Precious metals are likely to open higher as geopolitical factors came back into focus after comments from North Korea and Donald Trump. Geopolitical tension has ramped up following the United Nations decision to impose sanctions against North Korea this week. The escalation in war-like rhetoric is likely to keep broader risk appetite lower and help safe haven assets rally. On the upside, better US labor market data will limit gains. US job openings increased by 461k to 6.2 million, the highest level on record. Earlier, 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.

Base Metals

Base metals continue to rally with minor metals having the most action along with nickel, which is well supported by rallying Chinese steel prices. A rally in Chinese steel and iron ore prices brightened the outlook for growth and industrial demand in China. Shanghai aluminium and copper roared to the highest in around 5 ears as investors flooded into metals on expectations of capacity cuts in coal and aluminium in China.

Energy

Crude oil prices are likely to open flat and remain choppy on conflicting drivers. Further cuts in exports by Saudi in September coupled with hope of better compliance from Iraq has kept prices supported on the downside. Data earlier today also showed that US oil inventories declined by 7.8 million barrels last week. On the upside, prices faced resistance as EIA forecasts US crude oil production to average 9.9 million bpd in 2018, which would be the highest annual average production on record.