Monday Morning Metals

Gold closed higher, trading up for the first in 4 days, after getting some support from a drop in the US dollar and as data showed China’s economy slowed in line with expectations in the second quarter. Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, declined to 1,269.73 tons, as on July 12. Silver holdings of iShares silver trust, the largest ETF backed by the metal, declined to 9,696.71 tons, as on July 13.

Hedge funds and finance managers have cut their net long position in Comex gold futures and options by 19,305 to 88,973 lots in the week to July 10, as per CFTC.

The DX, which compares the US unit to a basket of other currencies, last reached 83.366, declining from 83.666.

The EUR recovered from a two year low against the dollar, after Italy successfully completed an auction of 3-year debt at lower borrowing costs.

Moody’s downgraded Italy’s government bond rating by two notches to Baa2 and warned it could cut it further. Moody’s Investors Service changed its outlook for the global base metal industry to negative from stable, blaming a slowdown in economic growth. However, prices will remain range bound, with a negative bias, although a broader price collapse as seen in 2008 is unlikely.

Copper moved to one-week high, after expected second-quarter growth data from China eased concerns about demand prospects from the world’s biggest consumer of industrial metals. Prices were also supported by a rally in EUR.  A strike has virtually shut down construction at its new nickel processing plant in southern Newfoundland for the second straight day.

Crude oil  closed higher, supported by a rally in the financial markets and concerns over supply after US imposed stronger sanctions on Iran.

Turkey is finding it difficult to import Iranian oil in July because of the embargo on ship insurance, trading and shipping, leaving Tehran battling to sell oil now stuck in storage tanks in Egypt

The number of rigs actively explored for oil and natural gas in the US was down by 12 last week to 1,953. 1,427 rigs were explored for oil and 522 for gas while 4 were listed as miscellaneous, as per Houston-based oil-field services company Baker Hughes Inc

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