What’s next? – GOLD, OIL 17.05.17

GOLD
Gold futures extended gains in Asian hours on Wednesday as an ongoing political turmoil in the United States weighed on expectations for a long-awaited tax reform.
Apparently, there is a memo in which President Trump asked former FBI director James Comey to release an active investigation on his previous national security advisor Michael Flynn.
On the Comex division of the New York Mercantile Exchange, gold for June delivery rose 0.57 percent to trade at $1243.50 a troy ounce as of 07:10 GMT.
The yellow metal settled higher on Tuesday as political instability pressured the US dollar amid downbeat economic reports limiting expectations for economic growth in the second quarter.
Reports saying Trump disclosed highly classified information to Russia concerning the Islamic State also raised fears among investors as many politicians asked for an independent investigation on the matter.
President Trump said he has the right to share such information with his Russian counterparts as a way to ensure flight safety during operations in Syria and other territories.
Gold, a dollar-denominated commodity, benefits from a weaker greenback, making it a more competitive investment for investors holding foreign currencies.
On the data front, housing starts fell by 2.6 percent to its lowest point in five months, below expectations for a 3.7 percent increase. Industrial production in the US increased by 1 percent in April, above a forecasted rise of 0.4 percent.
According to Fed funds tracked by CME Group’s FedWatch tool, market participants are currently pricing in a 69.2% chance of an interest rate hike at the June policy meeting.

OIL
Oil prices moved lower in Asia on Wednesday following an industry report that showed increasing US crude stockpiles despite expectations for a drawdown.
US West Texas Intermediate oil futures traded at $48.33 a barrel on the New York Mercantile Exchange, down 0.68 percent from its prior close. The international Brent crude oil futures eased 0.31 percent to trade at $51.49 a barrel as of 07:10 GMT.
On Tuesday, the American Petroleum Institute said US crude reserves grew by 882,000 barrels in the week ended May 12, against a forecasted reduction of 2.3 million barrels. The previous week, crude inventories had decreased in 5.789 million barrels.
Distillate inventories also came higher in 1.79 million barrels, while gasoline stocks dropped by 1.78 million barrels. Analysts had expected a 1.050 million barrels reduction in distillates products and a 731,000 barrels plunge in gasoline stockpiles.
These figures came in anticipation to the official report of the US Energy Information Administration, which is due on Wednesday at 14:30 GMT. Market analysts are currently pointing at 2.360 million barrels drop.
Crude benchmarks ended lower on Tuesday as market participants looked ahead of official inventories from the United States amid rising expectations for the extension of OPEC-led cuts.
Earlier this week, energy ministers from Saudi Arabia and Russia expressed their desire to extend the output cuts until March 2018 under same conditions that prevailed so far. Kuwait authorities also said the nine-month extension is the right way to go.

Fort Financial Services