Commodities markets summary

Reported by AAP
Wednesday, September 2, 2015
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A summary of trading in key commodities markets overseas:

ENERGY

World oil prices have tumbled as poor manufacturing data in China, the world's largest energy consumer, hammered the outlook for demand and shook market confidence.

China's economic woes once again were hitting markets worldwide. Official data released earlier in the day suggested the country's key manufacturing sector stalled in August. The purchasing managers index (PMI) slumped to a three-year low of 49.7 in August from 50.0 in July. A reading below 50 indicates contraction.

US financial giant Citigroup said that China was driving prices of commodities, including oil, lower "as never before".

PRECIOUS METALS

Gold gained per cent as the US dollar and global equities dropped on fresh signs of economic weakness in China and uncertainty over the timing of the Federal Reserve's first interest rate rise in nearly a decade.

"The price of gold is vulnerable to one last dip if, as we anticipate, the Fed presses ahead with a first hike in US interest rates soon," said Capital Economics in a note.

"As long as the Chinese growth anxieties are there, the Fed will have to find some other remedy for their itching to raise the interest rate," said Naeem Aslam, chief market analyst at AvaTrade.

BASE METALS

Copper prices have fallen as expectations of weak demand from top consumer China are fuelled by data showing its manufacturing sector contracting at its fastest pace in three years.

"Looking at fundamentals, China and demand, it's not looking terribly healthy," said Sergey Raevskiy, metals research analyst at SP Angel.

"Commodity prices have been buffeted by volatile swings in Chinese equity and FX markets, as well concerns regarding underlying growth and (the) policy response," Citi said in a note.

04/09/2015 03:08Sydney, Australia. 4 September,2015
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