Tuesday, 7 February 2017
What’s next? – GOLD, OIL 07.02.17
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what’s next
GOLD
Gold prices moved up in Asian trade on Tuesday due to ongoing political concerns, while Australia’s regulator said no more monetary easing is to be expected in the near future.
On the Comex division of the New York Mercantile Exchange, gold for April delivery was 0.32 percent higher to trade at $1,236.00 an ounce as of 06:00 GMT.
"There is no longer an expectation of further monetary easing in other major economies," said the Reserve Bank of Australia in a statement on Tuesday.
The regulator ended its monetary policy meeting, keeping interest rates steady at a record low of 1.5 percent, as it was widely expected by market participants.
"The board judged that holding the stance of policy unchanged at this meeting would be consistent with sustainable growth in the economy and achieving the inflation target over time."
In the previous session, gold prices were also higher on the back of a weaker US dollar, pressured by political uncertainty over the next steps of the Trump administration on matters such as domestic security, immigration and international relations.
So far, there are three issues that are being constantly monitored by investors: Trump’s economic agenda, the immigration ban on muslim-majority countries and increasing tensions between the United States and Iran.
In Europe, the political sphere is not any better. For countries such as France, Germany or The Netherlands, 2017 will be an important year of elections. Especially as far-right candidates are stepping harder into the races and getting closer to the establishment.
French Presidential Candidate Marine Le Pen released a manifesto during the weekend saying she intends to take the country out of the euro zone.
Last week, the precious metal added 2.4 percent, showing its best weekly performance in seven months as a weak growth of wages in the US threatened Federal Reserve’s plan to raise benchmark rates as much as three times this year.
OIL
Oil prices rebounded in Asian hours on Tuesday as the greenback dropped across the board, while investors kept an eye on further US crude inventories data later in the day.
US West Texas Intermediate oil futures traded at $53.10 a barrel on the New York Mercantile Exchange, up 0.17 percent from its prior settlement. The London-based Brent crude oil futures were up 0.22 percent to $55.84 a barrel as of 06:20 GMT.
The American Petroleum Institute is set to release a preliminary read on US crude and refined product inventories for the week ended January 3. Data will anticipate Wednesday’s official report from the US Energy Information Administration.
These reports are relevant for market players as they measure the response of US refineries to the coordinate output cut between OPEC and non-OPEC countries, which intend to reduce 1.8 million barrels per day or nearly 2 percent from global production until June.
Washington’s actions continued to weigh on the market on Monday. The Trump administration has recently announced economic sanctions against Iran due to unapproved ballistic missile tests carried by the Arabic nation. Sanctions target 25 Iranian individuals and entities.
Later this week, market participants will monitor a new oil rig count from Baker Hughes. The oilfield services provider reported a build of 17 rigs searching for oil in the United States last week, leaving the total at 583 platforms.
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