Commodity Capsule: Brent crude oil inches higher; gold climbs; copper rises| Watch video

Commodity Capsule: Oil prices edged higher on Monday, supported by expectations that major producers will tighten supplies.

Both the crude benchmarks are hovering at their highest levels in seven months, having weakened in the last two weeks.

Russian Deputy PM Novak said Russia had agreed with partners in OPEC on parameters for continued export cuts. 

Russia has already said it will cut exports by 300,000 barrels/day in September, following a 500,000 bpd cut in August.

Saudi Arabia is expected to roll over a voluntary one million bpd cut into October.

US labor market conditions were cooling and cementing hopes that the Federal Reserve will not raise interest rates this month.

In China, manufacturing activity unexpectedly expanded in August, data from Caixin's manufacturing PMI survey indicated

Gold prices rise as rate hike fears ease

Gold prices rose slightly on Monday, extending gains from the prior session as mixed US labor data cemented expectations that the Federal Reserve will keep interest rates on hold.

Notion weighed on the dollar and Treasury yields, aiding the rise in the yellow metal.

Focus is now on more economic indicators from China this week, as well as any more cues on the U.S. economy and future rate hikes. But trading in metal markets is expected to remain somewhat limited on Monday, on account of a U.S. market holiday.

The central bank is now almost unanimously expected to keep rates steady in September and may announce an end to its current rate hike cycle.

But while US interest rates are unlikely to rise further, they are also expected to remain at over 20-year highs for longer, given that US inflation remains sticky.

Such a scenario still presents limited upside for gold, given that high-interest rates push up the opportunity cost of holding bullion.

Markets are now awaiting a string of Fed speakers this week for more cues on monetary policy, as well as some more indicators on the world’s largest economy.

China's optimism boosts copper

Copper prices rose nearing a one-month high amid growing optimism over an economic recovery in China.

Markets are awaiting more stimulus measures from Beijing, particularly measures aimed at China’s property market, as the government moves to shore up a slowing economic recovery. Chinese banks were seen cutting yuan deposit rates, while the People’s Bank also loosened some mortgage requirements.

Sentiment towards the property market aided by beleaguered developer Country Garden Holdings reaching a deal with debtholders to postpone some payments.

The focus this week is on Chinese trade and inflation data.

The soft dollar helped spur gains in copper, with increased optimism over more stimulus measures in China.

Shanghai nickel rallied to its highest level in nearly four months

Rising ore prices and tightened supply from Indonesia amid strong seasonal demand support LME nickel as well.

Global Sugar prices headed higher as London White Sugar surges near 12-year high past $700/ton.

ICE raw sugar prices are hovering 10-week high near 26 cents a pound.

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