Sunday, 26 February 2017
What’s next? – GOLD, OIL 27.02.17
Gold prices moved higher in Asian trade on Monday, with market players putting their eyes on the Fed’s next move and looking ahead of remarks from President Donald Trump on Tuesday.
On the Comex division of the New York Mercantile Exchange, gold for April delivery was down 0.02 percent to trade at $1257.90 an ounce as of 07:10 GMT.
Bullion ended last week on a 3-½ months peak as the US dollar extended losses and economic reports eased expectations regarding a March interest rate.
The Commerce Department reported on Friday a 3.7 percent build in new home sales for January, below forecasts of a 6.3 percent increase. Michigan’s consumer sentiment came in at 96.3 points in February, in line with analysts’ expectations.
While it seems that traders are feeling less confident about a rate hike next month, speeches from Fed officials will remain in focus this week. Investors will continue to weigh economic data in search for hints on whether the US regulator should or not proceed with a raise “fairly soon”.
This week’s key event will certainly be President Donald Trump’s address to the Congress on Tuesday at 21:00 GMT. Market players will pay close attention to his words for further details on economic promises, especially on the upcoming tax reform, deregulation and fiscal spending. Fed Chair Janet Yellen will be speaking on Friday at 18:00 GMT.
Oil prices rose in pre-European session on Monday as investors looked ahead of an update on February crude supply and demand data from the International Energy Agency (IEA).
US West Texas Intermediate oil futures traded at $54.31 a barrel on the New York Mercantile Exchange, up 0.59 percent from its previous settlement. The London-based Brent crude oil futures soared 0.68 percent to trade at $56.37 a barrel as of 07:10 GMT.
Also in focus will be President Donald Trump address to Congress on Tuesday and Fed Chair Janet Yellen speech on Friday. Both events promise to attract large attention as investors look for further details on economic promises such as the tax reform and the regulator’s next move.
But traders will also keep their eyes wide open ahead of US crude stockpiles. As usual, the American Petroleum Institute will release its weekly estimation on Tuesday, followed by official figures from the Energy Information Administration on Wednesday at 15:30 GMT. Crude inventories rose by 564,000 barrels in the week ended February 17, slowing the growth pace.
Crude benchmarks have been trading on a narrow interval around $50 per barrel for already two months as there are no relevant changes in the fundamental background. Baker Hughes reported an addition of 5 oil rigs, moving the total count to 602 platforms.
The oil market is currently balancing two big forces: OPEC-led output cut program and the response of US shale producers. So far, the IEA said OPEC compliance with the 1.8 million bpd cuts stood at 90 percent in January. However, the US production continues to increase.
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