Wednesday, 5 April 2017
What’s next? – GOLD, OIL 05.04.17
Gold prices moved higher in Asian trading on Wednesday as political risk increased after North Korea launched a new ballistic missile ahead of a US-China summit this week.
US President Donald Trump and China’s President Xi Jinping will kick off a two-day meeting on Thursday at Florida’s Mar-a-lago golf resort to discuss trade and jobs.
Investors are closely following this event as it might unveil details on how future relations between the US and China will evolve under a conservative administration. Trump has criticized China’s economic approach in many occasions, even blamed it for stealing American jobs.
On the Comex division of the New York Mercantile Exchange, gold for April delivery grew by 0.02 percent to trade at $1258.70 a troy ounce as of 07:10 GMT.
Hawkish remarks from Federal Reserve officials couldn’t push down bullion prices and market players continued to focus on upcoming nonfarm employment data later this week.
Philly Fed President Patrick Harker said on Monday that the US central bank should hike rates at least two times more this year, if labor conditions and inflation backed the decision.
Today, Automatic Data Processing will release its own nonfarm employment change for March as of 12:15 GMT, with expectations standing at 187,000 jobs build. This report comes in two days before official figures from the Labor Department.
Oil benchmarks headed to a monthly peak on Wednesday after an industry report showed a reduction in US crude stockpiles, while production at the Buzzard oil field in the North Sea was momentarily halted, increasing speculation for lower global supplies.
Currently, Buzzard’s capacity goes up to 180,000 barrels per day, making it the largest supplier of the Forties crude stream. Brent crude futures are widely dependant on this kind of news.
US West Texas Intermediate oil futures traded at $51.45 a barrel on the New York Mercantile Exchange, up 0.82 percent from its previous settlement. The international Brent crude oil futures rose 0.79 percent to trade at $54.60 a barrel as of 07:10 GMT.
Overnight, the American Petroleum Institute reported a drop of 1.8 million barrels in US crude inventories for the week ended March 31.
The US Energy Information Administration will release official stockpiles figures for crude and refined products as of 14:30 GMT. Analysts forecasted a 435,000 barrels reduction last week.
Investors also paid attention to a report elaborated by Reuters, showing that OPEC global crude shipments decreased to 813.7 million barrels in March, slipping 17 percent since January.
On Friday, market players will be focusing on Baker Hughes weekly oil rig count, which last week came in at 662 units following an eleventh consecutive increase.
While sentiment is improving, concerns that growing US shale production might derail OPEC-led efforts to rebalance supply levels continues to weigh on oil benchmarks.
Fort Financial Services