Commodities Week Ahead: Gold, Copper Under Pressure; $65 In Sight For Oil
Investing.com | Sep 10, 2018 03:16
Donald Trump’s latest trade ultimatum to China could spark an investor flight across major commodity markets this week, amid weak technicals and potentially bearish reports from OPEC and other global energy agencies that might pressure US crude oil towards $65 per barrel.
With more investors expected to take refuge in the dollar, the currency should gain at the expense of gold, further eroding the safe-haven appeal of bullion. Among industrial commodities, copper and cotton may also be under pressure from the effects of the strong dollar and Trump’s trade warning to China. That could prompt long-only investors in commodities to seek gains from select markets that have rallied lately, such as wheat and cocoa.
On the economic calendar, investors will be on the lookout for rate decisions by the Bank of England and the European Central Bank on Thursday, and US retail sales numbers for August on Friday.
h3 US-China Trade War Intensifying/h3Trump warned last Friday that nearly $500 billion in additional Chinese goods could come under US tariffs soon, narrowing Beijing’s chance of escaping the bilateral trade conflict without significant damage. Washington will act on $200 billion of tariffs “very soon depending on what happens,” Trump told reporters on the Air Force One presidential jet. “I hate to do this, but behind that, there is another $267 billion ready to go on short notice if I want.”
His caution would be chilling particularly to investors in copper, as the technical outlook also has a “Strong Sell” on WTI, with Woodie’s Level 3 support only emerging at $65.92.
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