Friday, 24 March 2017
What’s next? – GOLD, OIL 24.03.17
Gold prices edged lower in Asian trading on Friday as sentiment continues to be determined by the healthcare bill vote, which has been moved for today after a late-night meeting yesterday.
Office of Management and Budget Director Mick Mulvaney said President Donald Trump is “done negotiating” and intends to move forward with the vote whatever the result.
Analysts believe that if Trumpcare doesn’t get enough support from House Republicans, the President will shift its focus to other campaign priorities, such as the tax reform or deregulation.
On the Comex division of the New York Mercantile Exchange, gold for April delivery was down 0.39 percent to trade at $1242.30 a troy ounce as of 06:40 GMT.
Bullion settled in red territory on Thursday as the US dollar extended losses in the light of mixed economic reports and ahead of a key vote for the new government.
According to the latest report from the Commerce Department, new home sales rose by 6.1 percent to a seasonally adjusted y/y 592,000 units in February, against 0.7 percent seen.
In other news, initial jobless claims came in at 258,000 for the week ended March 17, up by 15,000 from previous week’s 243,000. Analysts had forecasted a 1,000 build to 240,000.
Oil benchmarks moved to the upside in Asian hours on Friday with eyes placed at a meeting between OPEC and non-OPEC products this weekend regarding output cuts and as traders looked ahead of the weekly oil rig report.
US West Texas Intermediate oil futures traded at $47.85 a barrel on the New York Mercantile Exchange, up 0.31 percent from its previous settlement. The international Brent crude oil futures rose 0.18 percent to trade at $50.65 a barrel as of 07:05 GMT.
Oilfield service provider Baker Hughes will release its weekly oil rig count as of 18:00 GMT. Last week, the company reported a new build that left the total count at 631 units.
On Thursday, crude prices remained under pressure over concerns that increasing US shale production will derail OPEC-led efforts to rebalance oil supply levels.
A day earlier, the US Energy Information Administration reported a build in crude stockpiles by almost 5 million barrels for the week ended March 17, sending the total reserves to a peak of 533.1 million barrels.
Investors are currently searching for hints of whether the oil cartel and other independent producers will extend output cuts for another six months.
While compliance levels remain high over OPEC’s 1.8-million-bpd cut agreement, reports have showed that the oil group’s de facto leader Saudi Arabia has been reducing more than expected in order to keep up the rhythm of other countries.
Fort Financial Services