Commodities Daily - January 10, 2020

> Gold consolidates around $1,550/oz. Today, the market will be focused on the US nonfarm payroll report, which we expect to exert pressure on gold. We expect gold to ease to $1,510-1,520/oz over the next few days given the de-escalation between the US and Iran, the imminent inking of the "phase one" trade deal and positive US macro data.> Base metals off to a good start this year. The solid overall performance of base metal prices so far this year has owed to expectations over the signing of the phase one trade agreement between the US and China, which was recently scheduled for January 15 in Washington. This morning, 3m forward contracts are trading at $6,200/tonne for copper, $2,370/tonne for zinc, $1,810/tonne for aluminum and $14,150/tonne for nickel. GOLD CONSOLIDATES AROUND $1,550/OZSeveral events contributed to increased demand for risky assets yesterday.First, the US Congress passed a measure limiting Donald Trump's right to use force against Iran. Although the document is nonbinding, the measure includes a clause that the US president is not to launch military action against Iran without congressional approval. Next week, the House may vote on a bill to block funding for military action against Iran.Second, investors welcomed a statement by US Federal Reserve Vice Chairman Richard Clarida that inflation is showing no sign of accelerating despite the healthy state of the US economy. The statement followed fairly strong initial jobless claims data (they declined to 214k during the week to December 28, below the consensus forecast of 220k).Third, the market still expects China and the US to sign their initial trade agreement in Washington on January 15.Despite these positive factors, demand for gold remains quite stable, and the price is holding at around $1,550/oz. We expect it to start declining to $1,510-1,520/oz over the next few days. Today, at 16:30 Moscow time, US nonfarm payroll data for December will be published. The consensus forecast stands at 160k, versus 266k for November. Should the data exceed the forecast, the dollar could well strengthen and put pressure on SE METALS OFF TO A GOOD START THIS YEARMany investors had been expecting the official signing of the phase one trade agreement between the US and China to take place in the first week of January. However, right near the end of last year it was announced that there would be a slight delay. Yesterday, it was reported that the Chinese trade delegation led by Vice Premier Liu He will arrive in Washington on January 13 to take part in a signing ceremony on January 15 at 11:30 local time. Nonetheless, the details of the agreement have yet to be disclosed, and US President Donald Trump indicated yesterday that he might wait until after the 2020 election to get started on phase two. The news flow for the base metals sector has been relatively quiet, and trading volumes have been fairly modest so far this year. Yesterday, Chile's national copper commission Cochilco published data on the country's copper industry in the month of November. The most significant decline in production was at the Escondida mine (output fell to 103k tonnes from 108.1k tonnes in October 2019 (m-o-m), a 4.7% drop), while the Codelco group registered an 11% y-o-y drop in output. In addition to the nationwide protests in October-November last year, the results were affected by a high y-o-y comparison base.This morning, 3m forward contracts are trading at $6,200/tonne for copper, $2,370/tonne for zinc, $1,810/tonne for aluminum and $14,150/tonne for nickel. We expect to see a positive backdrop for base metals next week when Chinese data on industrial output (Tuesday) and trade (Friday) are due, while the phase one trade deal is slated to be signed on Wednesday. This comes as risks of a new escalation between the US and Iran have substantially