Asian Markets Start Off With A Bang Along With Industrial Metals

Asian Markets Start Off With A Bang Along With Industrial Metals
Asian Markets Start Off With A Bang Along With Industrial Metals
Global equities started September with a bang after upbeat economic reports in Europe and China buoyed investor confidence on Monday. A slew of manufacturing data spread positive sentiment across Europe and added to recent signs that the eurozone is building a sustained recovery from its longest ever recession. Asian indices are trading higher as Hang Seng was up by 1.01% while Nikkei 225 was up by 2.54% and a Chinese market is down by 0.81%. Asian stocks climbed the most in a month, led by Japan, and the yen weakened on evidence of a pickup in global manufacturing. Gold continued to ease by $3.20 this morning to trade at 1392.90. Silver diverged from gold as precious metals eased by industrial metals climbed. Silver added 62 cents this morning to trade at 24.13. Platinum and palladium also gained this morning. Platinum added 40 cents to tip at 1521.30 while palladium gained $1.80 to trade at 717.70.

As geopolitical tensions eased over the weekend after President Obama decided to request congressional approval before taking action in Syria, pressures tumbled. The US congress is in recess until September 9th. The safe-haven precious metal had surged to a peak of $1,433.83 last Wednesday as investors sought shelter from Syria worries. That was the highest level since May 14. With the US market closed on Monday for the Labor Day holiday, gold traded little changed after dropping for three days to a one-week low as investors assessed prospects for reduced stimulus in the U.S. as the world’s largest economy recovers. Gold prices settled marginally lower on Monday amid speculation of an early reduction in the Fed’s asset purchase programme. However, a positive manufacturing data print from China aided the outlook on metal demand. Meanwhile, holdings in the SPDR Gold Trust remained steady at 921.03 tonnes, which also gave some support to the metal and limited the downside.

Copper pared its gains from Monday, made on the back of the upbeat Chinese manufacturing data. The futures slipped 2 cents to $3.30 a pound, but were still 1.1% higher than their settlement price Friday. Industrial metals prices rose yesterday as strong manufacturing data from top metals consumer China boosted optimism about demand prospects for metals.

The metals market remains sensitive to on going global stimulus as traders look closely at the US FOMC meeting later this month, as the majority think that the Fed will begin tapering its monthly purchases this month. Traders are hoping the Bank of Japan which begins its monthly meeting tomorrow will add to its monthly purchases. There is also a possibility that the Bank of England might increase its program at its meeting on Thursday.

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