Commodities: Stronger USD weighs on gold
(ShareCast News) - The USD found some much needed strength on Tuesday with the release of the JOLTS job opening figures which came in above market expectations and showed that 6.16m job openings were created in August.
This helped the dollar index higher by 0.37% to 93.774 as of 1700 BST. As a result, gold found sellers, catching offers down to the day-low of $1,251/oz. by 1600 BST. The day's high in the precious metal was hit at noon, at $1,265.
In a research note out earlier on Tuesday, David Madden from CMC Markets said, "Traders are still divided over whether the Federal Reserve will raise interest rates in December or not, but at the moment gold is feeling the pinch."
Investors look to gold as a safe haven investment and tend to buy when the dollar is weak as it makes it cheaper for holders of other currencies. In addition to this, it is used as a hedge against inflation and is also purchased in low interest rate environments.
In other precious metals news, spot silver was up 0.84%, trading at $16.41/oz. with platinum and palladium both up 0.55% and 0.95%, respectively.
Over in the oil patch, Abu Dhabi hosted a two-day meeting between OPEC and non-OPEC members, concluding on Tuesday, with the need to increase compliance with the recently agreed deal to cut 1.8m barrels per day (bpd) of production high on the agenda.
WTI (West Texas Intermediate) crude saw a daily high on Tuesday morning of $49.48 before falling a touch over 48 cents to hit a day low of $48.99 by 1500 BST.
By the closing bell, the benchmark was down 0.48% at $49.25. Brent crude saw similar moves posting a day high of $52.75 by 0900 BST, only to hit a low some hours later of $51.86.
In the base metals markets, spot copper was up by 0.02% on the day at $6,488 per metric tonne. Data published overnight revealed that Chinese copper imports were higher by eight percent in July year-on-year as credit conditions improved; however, concerns about manufacturing activity linger.
On the agricultural front, soybean futures gained 0.47% to $9.78 a bushel, corn was down 0.48% and cotton was up 0.71% to $0.71 per lb.