Commodities: Gold lower as dollar firms ahead of Jackson Hole
Gold futures traded slightly lower on Thursday as the US dollar gained some ground, with the December contract down 0.28% to $1,291/Oz. as investors adopted a "wait and see" approach ahead of the Jackson Hole symposium, eager for any clues from US Fed chair Janet Yellen who was due to speak on Friday.
Fund manager Richard Xu at HuaAn Gold in China said, "The market is pricing in the Federal Reserve's actions at the Jackson Hole meeting and people are expecting some kind of tightening going on in that space."
Gold is highly sensitive to rising U.S. interest rates, as these increase the opportunity cost of holding non-yielding bullion, while boosting the dollar, in which it is priced.
Other precious metals saw spot silver trade 0.77% lower to $16.97/oz. with platinum up 0.44% to $982/oz. and palladium up to $938.
In base metals, spot copper climbed 1.9% to $6,698/tonne by 1730 BST. Capital Economics said in a note, "Whilst fundamentals have played a role in the most recent rallies in industrial metals, we think that speculative activity has exacerbated the move up in prices," adding "in some cases-notably copper-futures positioning looks particularly stretched and we would not be surprised to see some profit taking."
Thursday's rise in copper was also down to stronger demand in top consumer China, with Nitesh Sah at ETF Securities saying, "There is clear indication that Chinese demand for metals is still pretty strong and copper is no exception."
Energy markets saw both grades of crude trade lower with WTI for December delivery down 1.63% to $48.08/barrel and October benchmark brent down 1.39% to $51.91, helped by a firmer dollar.
Speaking about the day's moves, Hans van Cleef at ABN AMRO said, "Comments by Yellen and Draghi may provide volatility for the dollar, and thus dollar-denominated commodities," adding, "That's encouraging some profit-taking after yesterday's rally in crude."
This comes despite possible disruptions from tropical storm Harvey, said to be moving up towards Port Mansfield Texas, prompting some operators in the area to close down platforms and evacuate workers. According to Sukrit Vijayakar at energy consultant Trifecta, "Harvey is expected to strengthen into a Category I hurricane by Friday."
November soybeans climbed 0.65% on the day to $9.45/bushel, on pace for their biggest daily advance in a week, lifted by strong export demand, gains in soyoil prices and smaller pod count findings on an annual U.S. crop tour. In a client note, INTL FCStone said, "This, coupled with continued good Chinese demand, has the soybean market finding support."
Corn futures for September delivery, however, were down on Thursday to $3.42/bushel. "The supply and demand situation in the corn market looks to be another range bound, grind-it-out affair with plenty of supply abroad to meet any short-term supply short falls," said Halo Commodities analyst Tregg Cronin in a note.