What’s next? – GOLD, OIL 19.05.17

GOLD
Gold prices extended gains in early trading on Friday as a new corruption scandal in Brazil weighed on market sentiment, while investors saw less chances of a rate hike next month as the political uncertainty deepened around the Trump administration.
Brazil's President Michel Temer is now under investigation for an alleged payment to a former Senate colleague. Accusation was issued by one the largest newspapers in the country. Temer said in a statement that he "never authorized payments to anyone to stay quiet."
On the Comex division of the New York Mercantile Exchange, gold for June delivery traded at $1250.70 a troy ounce as of 07:20 GMT.
The yellow metal settled to the downside on Thursday evening, with upbeat US manufacturing and initial jobless claims data providing some support to bull players.
Philadelphia Fed manufacturing index came in at a seasonally adjusted 38.8, above a previous month reading of 22.0 and expectations for a reduction to 19.5.
The Labor Department said on Thursday that the number of US citizens filing for unemployment benefits in the week ended May 12 fell by 4,000, leaving the total count at 232,000.
Meanwhile, Washington remained under heavy scrutiny regarding President Donald Trump’s asserted interference in an investigation of former FBI Director James Comey into his then-national security advisor Michael Flynn.
As the Federal Reserve June monetary meeting gets closer, investors are carefully listening to all available remarks from FOMC members. Cleveland Federal Reserve Bank President Loretta Mester said on Tuesday that jobs and inflation are still close to Fed’s goals and that there shouldn’t be any issues not to continue with a gradual rate normalization process.
According to CME Group’s FedWatch tool, chances for a rate move next month increased to 78.5 percent after falling close to ten percent in light of political uncertainty in the US.

OIL
Oil prices moved higher Asian hours on Friday as traders awaited a new weekly rig count in the United States, with WTI trading notably close to the $50 mark amid strong speculation that OPEC will extend its output cuts beyond June.
US West Texas Intermediate oil futures traded at $49.97 a barrel on the New York Mercantile Exchange, up 0.62 percent from its prior close. The international Brent crude oil futures soared 0.55 percent to trade at $52.80 a barrel as of 07:20 GMT.
Oilfield services provider Baker Hughes is set to release the latest US rig count as of 17:00 GMT. Last week, the company showed a seventeenth-straight week build of 9 oil rigs, leaving the total count at 712 units, the highest point since mid-2015.
Oil benchmarks settled in green territory on Thursday, recovering about one percent during the session, as players were increasingly optimistic about OPEC-led output reduction agreement extending to March 2018 at the May 25 meeting in Vienna.
Saudi Arabia, Venezuela, Kuwait, Russian and other producers have expressed support to the idea of extending the deal for a nine-month period.
Earlier this week, the US Energy Information Administration said crude oil stockpiles dropped by 1.75 million barrels in the week ended May 12, compared to expectations for a 2.4 million barrels drawdown. Data was positively interpreted by market players, providing support.
On Wednesday, the International Energy Agency warned that OPEC-led efforts to flight oversupply may fail even renewing the supply-reduction deal.