Bullions:
Gold edged up on bargain hunting today morning, but still hovered near its weakest in a month as talks between the White House and Congress to avoid year-end tax hikes and spending cuts showed little progress and kept most investors at bay. Gold investors are now focusing on the outlook for U.S. non-farm payrolls data on Friday, due to the link between job creation and monetary policy. Another round of aggressive Fed asset buyback and possible economic stimulus from the Bank of Japan could lift gold prices.
Base Metals:
Copper futures settled slightly lower Tuesday as bullish investment sentiment yielded to concerns about U.S. deficit talks and pressure from weaker equity markets, though a stronger euro kept steeper losses at bay. Copper traders continued to keep watch on Washington, where lawmakers are negotiating ways to avoid an automatic spending-cut and tax-increase package scheduled for 2013. Copper prices gave up earlier gains as uncertainty dimmed investor confidence. Copper traders worry that a sudden economic slowdown would cut demand for goods like cars, refrigerators and cell phones, which all contain copper. Earlier yesterday, copper prices had marched higher as foreign buyers were lured to the market by a weaker dollar.
Energy:
Crude prices fell slightly Tuesday amid uncertainty surrounding US budget talks and caution ahead of the weekly release of US oil supply data. On Wednesday, the US Department of Energy is due to issue its regular weekly report on US oil supplies, with analysts polled by Dow Jones Newswires predicting it would reflect a decrease of 400,000 barrels. Investors fear that if Republicans and Democrats fail to reach a compromise on longer-term budget-deficit reduction to avoid the cliff, demand for crude will drop.
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