A Stronger Dollar Pressured Gold on August 30
The market is looking forward to the monthly US jobs report, which is scheduled to be released on Friday, September 2.
The companies in the energy sector were mixed on Tuesday, August 30, due to weaker oil prices.
The decline in China’s copper imports and surge in exports in July raised concerns about the demand for copper in China.
The broad money supply rose by 10.2% year-over-year in July, which is the slowest pace of growth since April 2015.
Morgan Stanley is bearish on the future prospects of iron ore prices. The broker estimates that the iron ore prices will fall to $40 per ton in 2H16 and $35 per ton in 4Q16.
China’s new construction starts rose by 13.7% YoY in the first seven months of 2016 after steadily falling for two years
China’s steel prices One of the most dominant factors driving iron ore’s price rally is rising steel production and the resulting increase in steel prices in China (FXI). Although this has…
China’s passenger car sales rose to 1.6 million in July 2016, a year-over-year (or YoY) increase of 26.5%. This was the highest growth rate in three-and-a-half years.
In July 2016, China’s iron ore imports came in at 88.4 million tons. This was a rise of 2.7% compared to 86.1 million tons in July 2015 and 81.6 million tons in June 2016.
China produced 66.8 million tons of steel products in July 2016. This represented a year-over-year rise of 0.8% on top of June’s 1.7% growth.
Iron ore shipments from major ports in Australia and Brazil (EWZ) are key indicators for investors, as they give the supply-side perspective of the iron ore equation.
Iron ore inventories have risen by 14% since the start of 2016. Inventories for the week ended August 26, 2016, totaled 105.2 million tons.
Commodity (COMT) producers, especially iron ore producers, have experienced nothing short of a miracle in 2016. Despite the majority of market participants believing the contrary, iron ore prices have rallied in 2016.
Miners follow the direction of gold prices about 50% of the time. After the recent Federal Reserve meeting, precious metals and mining stocks were relieved.
Despite the trend in precious metals, it’s crucial for investors to know which miners are overperforming and which are underperforming their peers.
Billionaire bond and fund manager Bill Gross mentioned at the start of August that there seemed to be little choice apart from gold and real estate.
Undoubtedly, silver has outperformed gold this year. While gold has seen a year-to-date rise of 24%, silver has seen a rise of 33.3%.
The demand for gold as a store of value has increased as borrowing costs in the United States and across the globe have remained low.
Even though precious metals miners have seen a remarkable rally in their prices, many fund managers have begun unloading their holdings in gold equities.
Investors have been bullish about the precious metals market since the beginning of 2016. Gold, silver, platinum, and palladium have seen year-to-date rises.