Gold prices-Gold clung to small overnight gains on Wednesday, supported by softness in the dollar, but the metal's upside was limited as investors anticipated a Federal Reserve rate hike next week. Bullion traders are not optimistic of a sustained rally in prices as the Fed is widely expected to raise U.S. rates for the first time in nearly a decade at its next policy meet on Dec. 15-16. Investors are boosting bets gold will soon drop to $1,000 an ounce, options data show, ahead of next week's Fed meeting. Weakness in oil could trigger fears of deflation, a bearish factor for gold, which is often used as a hedge against oil-led inflation.
MCX Copper Tips-LME copper will move between USD 4,550-4,600/mt during Asian trading hours Wednesday with eyes on China’s data due for release today. China’s annual CPI rate is expected to pick up pace in November, driven by rising food prices. China’s PPI, however, is on track to deteriorate further in November, judging from weak official and Caixin’s China manufacturing PMI released earlier. Falling global commodity prices have dragged down raw material import prices and finished product sales prices. This, together with severe overcapacity and mounting stocks, left some companies more aggressive in selloffs for cash. This bodes ill for PPI.
Crude oil prices-Crude prices found at least temporary support early on Wednesday after the dollar weakened and China's commodity imports came out surprisingly strong, but oversupply means prices are expected to remain low for some time. Traders said the recovery on Wednesday was largely a result of short covering, a dip in the dollar which makes oil more expensive for importers using other currencies domestically, and strong Chinese oil imports as the government takes advantage of cheap oil to build up its strategic reserves. In oil, a ballooning glut is seen between 0.5-2 million barrels of crude a day in excess of demand, prices are down by almost two-thirds since 2014, and most analysts say they do not see prices rising much until late 2016 at the earliest.
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