Friday, 7 April 2017
What’s next? – GOLD, OIL 07.04.17
Gold reached a 5-month high in early trading on Friday as the United States fired dozens of missiles against a Syrian air base in response for the chemical attack in Idlib.
The international community has condemned the use of chemical weapons in Syria. Earlier this week, Mr. Trump had said the chemical attack crossed “many, many lines”.
While Russia claims that Bashar Assad’s regime is legit and it’s not involve with this attack, US and European leaders continued to blame the lethal act on the Syrian government.
On the Comex division of the New York Mercantile Exchange, gold for April delivery added 0.89 percent to trade at $1264.50 a troy ounce as of 07:00 GMT.
Bullion settled in green territory on Thursday, despite upbeat initial jobless claims increased odds for a Federal Reserve interest rate hike next June.
According to the Department of Labor, initial jobless claims for the week ended on April 1 declined by 25,000 to 234,000 from the previous week reading of 259,000. Economists had estimated a reduction of 8,000 applications to 250,000.
Expectations for a June rate hike were also supported by the latest FOMC minutes released on Wednesday. The document expressed the intention to reduce the regulator’s $4.5 trillion balance sheet this year, while continuing to normalize monetary policy with gradual rate hikes.
Traders are currently weighing in a 58 percent chance of a rate increase at the Fed’s June monetary meeting, as seen in CME Group’s FedWatch tool.
US President Trump and China’s President Xi Jinping are concluding a two-day summit later in the day, with market participants following carefully comments on jobs and trade relations.
Oil prices rebounded in early trading hours on Friday after the US military launched dozens of missiles targeting a Syrian air base in response to a chem attack.
US West Texas Intermediate oil futures traded at $52.45 a barrel on the New York Mercantile Exchange, up 1.45 percent from its previous settlement. The international Brent crude oil futures soared by 1.31 percent to trade at $55.61 a barrel as of 06:50 GMT.
Market players are now turning their focus into Baker Hughes weekly oil rig count, which is set to be released today as of 17:00 GMT.
Oil benchmarks were higher on Thursday amid expectations that OPEC-led output cuts would be extended for another six months on June.
The oil cartel and other independent producers agreed to shred 1.8 million barrels per day in the first semester of 2017 in order to rebalance crude supply levels and prompt up prices.
However, growing US shale production is threatening the effects of such agreement. Earlier this week, the US Energy Information Administration reported an unexpected increase in crude reserves, although API data had shown a stockpiles decline.
Investors also understand that the summer driving season is about to begin, and that translates into larger consumption, which would be positive for oil prices.
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