Gold prices-Gold struggled to recover from overnight losses on Tuesday on expectations of a Federal Reserve rate hike next week and a robust dollar. Friday's strong U.S. nonfarm payrolls data supported widely held market views that the Fed would hike interest rates for the first time in nearly a decade later this month. Higher rates tend to drag on non-interest-paying gold by increasing the opportunity cost of holding it, while boosting the dollar.
MCX Copper Tips-LME copper will stay weak at USD 4,540-4,580/mt during Asian trading hours Tuesday given falling crude oil prices and China’s disappointing data. Market will eye the euro zone’s revised Q3 GDP, US IBD Economic Optimism Index for December due for release on Tuesday. China will release November foreign trade data later this week. Euro zone’s Q3 GDP, released in November, and missed forecasts, strengthening hopes for more stimulus from the ECB. Should revised euro zone Q3 GDP disappoints again, the ECB is likely to take further action. ECB President said last Friday that the ECB could adjust its monetary policy anytime as appropriate to fulfill goal for economic growth.
Crude oil prices-Crude prices remained near 7-year lows in early Asian trading on Tuesday as OPEC continues to pump near record oil to defend market share, compounding a glut that is seeing hundreds of thousands of barrels produced every day in excess of demand. The decision by OPEC-members to keep oil production output at record high levels suggested that the organization was effectively abandoning its long-term strategy of limiting production and acting as a cartel, leading to more downward pressures on oil prices in the short term, said Sanjeev Shah, Chief Investment Officer of Sun Global Investments.
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