Gold, Copper, Silver and More

By FX Empire Analyst - Barry Norman
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Gold prices are treading water, recuperating from the weakness witnessed during last week. Looking forward, the market focus remains tuned to the upcoming Federal Reserve's policy meeting this week, and their assessment of the current economic scenario and likely throw light on future growth prospects. Investors remained cautious before Federal Reserve’s statement on Wednesday. Technical buying at the level also boosted the buying in Gold.

However Fed is not expected to take much further action in this meet after recent stimulus announcement. Traders will be paying more attention to their statement on the economic situation.

Gold demand in India rose significantly on Monday as a rebound in rupee slashed prices 1 percent ahead of the peak festival season.

International gold futures closed higher on Monday, for the first time in 3-sessions, recovering a small fraction of the heavy losses sustained at the end of previous week.

Gold holdings  of SPDR gold trust, the largest ETF backed by the precious metal, increased to 1,336.9 tons, as on Oct. 22. Silver holdings of ishares silver trust, the largest ETF backed by the metal, increased to 9,888.55 tons, as on Oct, 18.

Silver is also following suit.

Precious metals continue to trade range bound with no eco or event data on the calendar.

Selling is evident in the non‐ferrous complex, as poor flow of macroeconomic numbers in China and slowing metal imports has raised questions regarding the demand prospects in the world’s largest metals consuming nation.  

Copper declined to a six-week low on COMEX, after a report signaled declining economic growth in Japan and Caterpillar Inc's forecast of sales growth at the slowest in 4-years, fanning concern that a global slump may reduce demand for the metal. Copper futures for Dec. delivery closed down by 0.4% at $3.622 on the COMEX.  Data on Monday showed Chinese copper production in September matched its second-highest level this year as tight scrap supplies and favorable export policies encouraged smelters to keep output high.

Brazilian mining company Vale said, that it will shutter the Frood nickel mine in Canada by the end of 2012 as the sluggish global economy has reduced demand and prices have been continuously declining.

LME aluminum stocks rose by to 5.06mn tons, close to the record of 5.13mn touched in February.

Markets are expected to remain quiet throughout the day. Political risk is could be a market mover, but with US elections around the corner and the last debate behind, candidates are expected to be traveling and speechifying to garner votes. Spain's Prime Minister won election in his district without having much market consequences. Nothing is expected from Merkel or Hollande today.

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