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PRECIOUS-Gold holds near five-month low before Fed rate decision

Gold prices on Wednesday held near their lowest in nearly five months as investors looked ahead to an expected U.S. interest rate increase and clues from the U.S. Federal Reserve on its plans for further rises next year. The Fed's policy statement and latest economic projections are due at 1900 GMT. Fed Chair Janet Yellen will give a news conference half an hour later, her last before her four-year term ends early next year. The Fed has increased rates twice this year and is expected to raise them three more times in 2018. Gold is sensitive to rising rates because they push up bond yields, reducing the appeal of non-yielding gold. They also tend to boost the dollar, making gold more expensive for holders of other currencies. Spot gold was down 0.2 percent at $1,241.13 an ounce at 1256 GMT. On Tuesday it touched $1,235.92, the lowest since July 20. U.S. gold futures were up 0.1 percent at $1,243.10 an ounce. Gold prices have tended to fall before recent U.S. rate hikes but recover shortly afterwards, said Saxo Bank analyst Ole Hansen. Yellen's successor, Fed Governor Jerome Powell, has hinted that he has a cautious approach to rate increases. Much will depend on the projections, said Think Markets analyst Naeem Aslam. "If the Fed comes out of the gate with more hawkish views on the economy and sees inflation improving, it could impact the dollar index. Any further strength in the dollar index would push the gold price lower," Aslam said. The dollar weakened on Wednesday after a Democrat won a U.S. Senate seat in Alabama, reducing the Republican majority and likely making it harder for them to enact tax cuts that would stimulate the economy. Global shares were close to record highs, continuing a rally that has attracted investment away from gold. On the technical side, fibonacci support was at around $1,240 and a close below that level could trigger further falls, said Saxo Bank's Hansen. Analysts at ScotiaMocatta said momentum indicators showed gold could reach its July low of $1,204.90. Demand for gold as insurance against geopolitical risk could also fall after U.S. Secretary of State Rex Tillerson offered direct talks with North Korea without pre-conditions, INTL FCStone analyst Edward Meir said. In other precious metals, silver was down 0.5 percent at $15.65 an ounce after hitting a five-month low of $15.60. Platinum was 0.3 percent lower at $873.90 an ounce, after touching its lowest since February 2016 at $868.80 on Tuesday. Palladium was down 0.3 percent at $1,009.47 an ounce. (Additional reporting by Apeksha Nair in Bengaluru; Editing by Edmund Blair)

PRECIOUS-Gold holds near 5-month low ahead of Fed meeting outcome

Gold steadied near its weakest level in almost five months on Wednesday amid expectations the Federal Reserve would raise interest rates again at the conclusion of its last policy meeting this year. The Fed has increased rates twice in 2017 and is still expected to push through three more hikes next year. Spot gold was down 0.1 percent at $1,242.18 an ounce at 0755 GMT. That was not far above Tuesday's trough of $1,235.92, which was gold's lowest level since July 20. U.S. gold futures were up 0.2 percent at $1,243.90 an ounce. U.S. stock futures, Treasury yields and the dollar fell as Democrat Doug Jones beat Republican Roy Moore in a bitter U.S. Senate race in Alabama, dealing a political blow to Trump in a race marked by accusations of sexual misconduct against Moore. The win by Jones could be bullish for gold and bearish for the dollar, a Hong Kong-based trader said, adding that the recent dollar strength could lead to some profit-taking on the greenback, in turn helping gold. Strong U.S. producer price data had helped lift the dollar to a four-week high on Tuesday, suggesting improving inflation ahead of the outcome of the Fed meeting on Wednesday. "It's just consolidating here at the moment until the Federal Open Market Committee statement is out. We're expecting a rate hike," the trader said, on gold's behavior in Asian trading. Investors will also be focused on the U.S. central bank's statement for clues on further rate increases in 2018. Higher U.S. rates tend to boost the dollar, making greenback-denominated gold more expensive for holders of other currencies. "If the Fed comes out of the gate with more hawkish views on the economy and see inflation improving, it could impact the dollar index. Any further strength in the dollar index would push the gold price lower," said Naeem Aslam, London-based chief market analyst at Think Markets. Reuters technicals analyst Wang Tao said spot gold may bounce towards $1,250 before falling again, as it has stabilised around the support level of $1,239. In other precious metals, silver fell 0.3 percent at $15.67 an ounce, trading close to a five-month low of $15.61 hit overnight. Platinum was unchanged at $876.30 an ounce, after touching its lowest since February 2016 at $868.80 on Tuesday. Palladium was little changed at $1,012. (Reporting by Apeksha Nair in BENGALURU; Editing by Tom Hogue and Manolo Serapio Jr.)

METALS-Copper edges higher ahead of expected U.S. rate hike

London copper edged higher on Wednesday as the dollar eased after hitting one-month highs earlier on expectations that the U.S. Federal Reserve will raise interest rates for a fifth time since 2015. The dollar slipped against a basket of currencies after a Democrat won a bitter fight for a U.S. Senate seat in deeply conservative Alabama, reducing Republicans' already narrow Senate majority further. "Price action is likely to remain subdued as traders look ahead to key events later this week," ANZ said in a report, on the outlook for commodities. FUNDAMENTALS * LME: London Metal Exchange copper was up 0.4 percent at $6,688.50 a tonne as of 0731 GMT. The metal has found a base around $6,500, but had run into resistance at the 100-day moving average around $6,690, technical charts suggest. * SHFE: Shanghai Futures Exchange copper rose 0.9 percent to close at 52,350 yuan ($7,910) a tonne. * GLENCORE: Miner and trader Glencore said its battery minerals, especially cobalt, should spur profit in 2017 and beyond in an update for investors that also promised to grow the business, especially through partnerships. * ZINC: Glencore said next year's zinc production would be roughly steady at just over one million tonnes, although it will start to ramp up some capacity. * JAPAN ECONOMY: Japanese machinery orders rose more than expected in October, the Cabinet Office said, rebounding after a big fall in the prior month in a sign capital spending will remain resilient. * BAUXITE: Paris-based miner AMR began production at its Guinean bauxite mine on Tuesday, aiming to produce between 6 million and 10 million tonnes a year of the aluminium ore. * LEAD: Seasonally strong demand from battery makers, tight supplies caused by mine shutdowns and dwindling inventories in London Metal Exchange warehouses are expected to sustain lead prices, which recently hit six-year highs. * SHFE: Lead and zinc climbed 2.1 percent and 1.2 percent respectively, buoyed by a crackdown on polluters in China's Henan and Hunan provinces. Shanghai tin fell 2.1 percent. * MARKETS: U.S. stock futures, Treasury yields and the dollar fell as Democrat Doug Jones beat Republican Roy Moore in a bitter U.S. Senate race in Alabama, while Asian shares rose. * For the top stories in metals and other news, click or PRICES BASE METALS PRICES 0702 Three month LME 6689.5 copper Most active ShFE 52350 copper Three month LME 2017.5 aluminium Most active ShFE 14250 aluminium Three month LME 3153.5 zinc Most active ShFE 25190 zinc Three month LME 2512 lead Most active ShFE 19265 lead Three month LME 11170 nickel Most active ShFE 89810 nickel Three 19050 month LME tin Most active ShFE 134040 tin BASE METALS ARBITRAGE LME/SHFE COPPER LMESHFCUc3 675.73 LME/SHFE ALUMINIUM LMESHFALc3 -1270.61 LME/SHFE ZINC LMESHFZNc3 460.12 LME/SHFE LEAD LMESHFPBc3 -992.68 LME/SHFE NICKEL LMESHFNIc3 2030.97 ($1 = 6.6180 Chinese yuan) (Reporting by Melanie Burton; Editing by Sherry Jacob-Phillips and Manolo Serapio Jr.)