What’s next? – GOLD, OIL 09.03.17

GOLD
Gold futures continued to trade in red territory in Asian hours on Thursday as China’s inflation came in below expectations, although rising tension with North Korea provided some support.
On the Comex division of the New York Mercantile Exchange, gold for April delivery was down 0.45 percent to trade at $1204.00 a troy ounce as of 06:30 GMT.
The Chinese Bureau of Statistics reported a 0.8 percent increase in consumer prices (CPI) year-over-year in February, while the monthly reading was down by 0.2 percent. Analysts expected a 1.7 and 0.6 percent build respectively.
Also in China, the producer price index (PPI) came in a tick above expectations at 7.8 percent, with expectations standing at 7.7 percent and a previous reading of 6.9 percent.
Overnight, the yellow metal fell to a 1-month low following upbeat employment data from ADP, which lifted expectations of a Fed March rate increase.
According to the report, US private sector added 298,000 jobs in February, which left well behind expectations for a 190,000 build. While these are not official figures, they are used as a parameter to anticipate the Friday’s government statistics.
Expectations for a Federal Reserve hike at the March 14-15 meeting currently stand around 90 percent, as shown in CME Group’s FedWatch tool.

OIL
Oil futures rebounded in Asian hours on Thursday after posting strong losses in the wake of a larger-than-expected build in US crude stockpiles last week.
The US Energy Information Administration said crude reserves added 8.21 million barrels in the week ended March 3, leaving the total count at a record high 528.4 million barrels.
Market analysts were forecasting a rise of 2 million barrels. Previously, the American Petroleum Institute had reported a 11.6-million-barrel growth in crude stockpiles.
US West Texas Intermediate oil futures traded at $50.61 a barrel on the New York Mercantile Exchange, up 0.66 percent from its prior close. The international Brent crude oil futures soared 0.81 percent to trade at $53.54 a barrel as of 06:30 GMT.
On the contrary, gasoline and distillate products inventories dropped above expectations by 6.6 million barrels and 2.7 million barrels respectively. Cushing oil added 867,000 barrels.
While oil benchmarks remain under pressure due to increasing US shale production, quotes were able to hold inside the medium-term range and rebound from the lower band.
A recent report showed that China, the second largest buyer of crude oil, acquired 8.286 million barrels per day in February, marking a 3.5 percent advance year-over-year.
In a separate report, the EIA rose its output forecast to 9.21 million barrels per day, adding 330,000 if to compare with the prior year and 100,000 more than initially estimated in January.

Fort Financial Services