Thursday, 2 February 2017
What's next? – GOLD, OIL 03.02.17
Posted by Fort Financial Services at 23:54
Gold prices were lower in early morning trade on Friday due to a stronger US dollar, although sentiment was still pressured by political concerns surrounding the Trump administration.
On Thursday, Associated Press said the US leader used offensive language when talking with President Enrique Peña Nieto earlier this week. Although Washington and Mexico denied such reports, journalists with access to the conversation said Trump threatened to send US troops to deal with “bad hombres”, while adding that “Mexicans are nothing without the US support”.
On the Comex division of the New York Mercantile Exchange, gold for February delivery was up 0.38 percent to trade at $1,214.80 an ounce as of 06:45 GMT.
Market participants continued to digest the results of Fed’s first policy meeting in 2017. The US regulator left interest rates steady between 0.50 and 0.75 percent on Wednesday, but said the economy is on the right track for future hikes.
“Measures of consumer and business sentiment have improved of late,” said the Federal Open Market Committee in its January statement. Traders have noticed that the US central bank is using a rhetoric closer to Trump’s intentions in economic terms.
On Friday, investors will pay close attention to a fresh batch of economic data, including nonfarm payrolls, participation rate and unemployment rate at 13:30 GMT. Also, markit will release its composite and services PMI for January. Factory orders, ISM non-manufacturing employment and PMI will be out at 15:00 GMT.
Oil prices were higher in Asian trade on Friday as market participants see evidence that the OPEC output freeze is working, but took a moderate positioning ahead of US rig count data.
Quotes grew substantially on Thursday as Russia reported a drop of 100,000 barrels per day in crude oil production in January, adding arguments that OPEC and non-OPEC’s deal to reduce global output in 1.8 million bpd is actually working.
Meanwhile, investors were also paying attention to increasing tension between the US and Iran, which has recently launched a missile test. The White House put on notice Tehran about the severity of such actions and threaten to wider sanctions.
US West Texas Intermediate oil futures traded at $53.88 a barrel on the New York Mercantile Exchange, up 0.64 percent from its prior settlement. The London-based Brent crude oil futures were up 0.50 percent to $56.84 a barrel as of 06:40 GMT.
The US Energy Information Administration reported a bigger-than-expected build in crude inventories for the week ended January 27. According to data, crude stockpiles increased by 6.5 million barrels against a 2.6 million barrels seen by analysts. Gasoline stocks added 3.87 million barrels and distillate products grew by 1.57 million barrels.
Official figures matched with a previous report from the American Petroleum Institute (API) published on Tuesday that showed a 5.8 million-barrel build in crude inventories.
On Friday, attention will be placed at Baker Hughes’ weekly oil rig count data. Last week, oilfield services firm said the number of platforms working in the US soil rose by 15, leaving the total count at 566, the highest point since November 2015.
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