Thursday saw Pacific region tensions increase with the latest rhetoric from North Korea stating that the US should be “beaten to death like a rabid dog” and that the US mainland should be reduced to “ashes and darkness.” Several verbal threats were also shot across the bow of Japan.
Given gold’s recent reactions to threats from Pyongyang, the price action on Thursday was somewhat more calm as investors weighed up the seriousness of this latest round or verbal from the state.
The safe haven spot contract was little changed on the day, up only 0.13% to $1,325/Oz. with the December contract 0.08% higher to $1,329/Oz.
“Any uptick in U.S. inflation would be driven by a tightening labour market and a solid economic backdrop, and should be accompanied by rising interest rates by the Fed,” said Carsten Menke at Julius Baer, adding “This shouldn’t have a positive impact on gold.”
Other precious metals saw silver trade 0.44% lower to $17.70/Oz., platinum down 0.15% to $980/Oz. and palladium 2.39% lower to $919/Oz.
Copper continued it’s fall on Thursday after data showed that Chinese industrial production year on year was down to 6%. Fixed asset investment was also down to 7.8% as well as a drop in retail sales figures to 10.1%.
By 1745 BST, the base metal was trading 0.89% lower on the day to $6,502/ tonne.
“Softness in Chinese data has been a bit of an issue and I would chalk today’s fall in copper down to that,” said ETF Securities commodity strategist Nitesh Shah.
“From a fundamental perspective, the price of copper should be high, but the pace at which the rally has taken place is surprising,” he said.
Liberum analyst Ben Davis said, “We had expected momentum to carry the Chinese economy for at least a month longer, given the strong PMIs and recent price action in commodities (implying at least speculation of growing demand).”
Energy markets saw oil prices rally on the day, after the Energy Information Administration (EIA) said in its annual International Energy Outlook report that global oil demand will rise to 104 million barrels a day in 2030 from 95 million barrels a day in 2015.
On Wednesday, the Paris based organisation said that oil demand in 2017 will expand by the most in two years.
“The IEA revising up its 2017 global oil demand growth forecast, together with persistent weakness in the U.S. dollar index, has prompted bullish sentiment in the oil market. Anticipation is growing that this could quicken the pace of oil market rebalancing,” said Abhishek Kumar at Interfax Energy’s Global Gas Analytics in London.
WTI (West Texas Intermediate) for December delivery was up 1.24% to $50.75/barrel by 1800 BST, while the November benchmark brent crude contract was 0.8% higher to $55.60/ barrel.
In an interview with Reuters, BP Chief Executive Bob Dudley said, “We’re all trying to make our way in this world of between $50 and $60 and I would expect that to continue.”
Soybean futures were helped higher on Thursday, supported by strong export demand mainly to China, the latest US Department of Agriculture (USDA) report showed.
The November delivery contract for soybeans was up 1.49% to $9.77/bushel as December corn climbed 0.51% to $3.50/ bushel.