Tuesday, 4 April 2017
What’s next? – GOLD, OIL 04.04.17
Gold moved higher in Asian trading on Tuesday as investors looked ahead of a meeting between President Donald Trump and China’s President Xi Jinping in Florida.
Leaders will meet on April 6-7 at Trump’s Mar-a-lago golf resort to discuss jobs and trade. This encounter has significant importance in terms of international relations between US and Asia.
Last week, the White House published a statement on the matter, saying that "the two leaders will discuss global, regional, and bilateral issues of mutual concern."
President Trump was a bit more specific and explained on Twitter that "the meeting next week with China will be very a difficult one in that we can no longer have massive trade deficits... and job losses. American companies must be prepared to look at other alternatives,"
Trump’s new economic approach puts American interests first on trade agreements and bilateral relations, emphasising the importance of reviving the “forgotten” national industry.
On the Comex division of the New York Mercantile Exchange, gold for April delivery added 0.35 percent to trade at $1258.40 a troy ounce as of 05:40 GMT.
Bullion prices settled higher on Monday as mixed economic reports pressured the US dollar. ISM manufacturing PMI came in at 57.2 in March, falling from a previous month 57.7 but still above expectations for 57.0. Construction spending rose 0.8 percent in February against an expected growth rate of 1 percent.
Investors are also paying attention to speeches from Fed officials in search for hints on the timing of the next rate hike. At this stage, chances for a June hike stand around 50 percent.
Oil futures edged down in Asian hours on Tuesday, with market participants expecting unofficial US crude inventories later in the day while China and India remained closed for holidays.
US West Texas Intermediate oil futures traded at $50.05 a barrel on the New York Mercantile Exchange, down 0.38 percent from its previous settlement. The international Brent crude oil futures dropped by 0.36 percent to trade at $52.93 a barrel as of 06:30 GMT.
The American Petroleum Institute (API) will present its weekly report on crude and refined products stockpiles this evening, a day before the US Energy Information Administration (EIA) releases official figures.
For the week ended on March 31, economists forecasted a 530,000 barrels drop in crude inventories and a reduction of 1.12 million barrels for distillates and 1.462 million barrels for gasoline supplies.
Crude prices ended in red territory on Monday amid concerns that growing US shale production will derail OPEC-led efforts and as Libya's largest oil field reopened after a one-week stop.
Investors are currently focus on a possible extension of the OPEC + non-OPEC output cuts deal in June. Last week, officials from the oil cartel said the final decision will be taken in May.
Fort Financial Services