Monday, 26 June 2017

What’s next? – GOLD, OIL 26.06.17

Posted by Anonymous at 11:08 Labels:

GOLD

Gold prices were slightly lower in Asian hours on Monday, with investors’ attention shifting to fresh economic data and further comments from central bank leaders scheduled later this week.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were trading down by 0.13 percent at $1,254.80 a troy ounce as of 06:20 GMT.

Ahead in the week, market players will be paying close attention to comments from Fed Chairwoman Janet Yellen on Tuesday in search for fresh hints on the timing of new rate hikes and details on the plan to reduce Fed’s massive balance sheet.

Also, investors will keep an eye on Friday’s euro zone inflation report and remarks by central bank leaders on the sidelines of ECB’s forum in Portugal.

On Friday, gold futures ended in one-week highs on the back of a weaker dollar. Bullion for August delivery was up 0.71 percent to trade at $1,258.31 on the Comex division of the NYME.

The US dollar index, which tracks the greenback against a basket of six major rivals, edged lower 0.37 percent to 96.98, marking the largest intraday decline in three weeks.

Last week, investors were focused on a batch of FOMC speakers. In the last session, St. Louis Fed President James Bullard stated that the US regulator should wait before moving forward with further rate increases this year.

"The Fed can wait and see how the economy develops before making any further adjustments."

Other Fed representatives, such as NY Fed President William Dudley, warned that slowing down the policy normalization process could have serious consequences for the US economy.

OIL

Crude oil futures jumped by more than one percent in early trading hours on Monday, although traders continued to worry about increasing levels of drilling in the United States.

The US benchmark West Texas Intermediate oil futures traded at $43.47 a barrel, up 1.07 percent from its prior close. Meanwhile, the London-based Brent crude oil futures rose 1.05 percent to trade at $46.02 a barrel as of 06:20 GMT.

Oil prices settled in green territory on Friday, but remained under pressure as investors’ concerns over the ongoing crude supply overhang continued to weigh on market sentiment.

Oilfield services provider Baker Hughes said on Friday that rigs operating in the United States rose for a 23rd consecutive week, anticipating an even larger crude output for the near future.

According to data, US drillers added 11 platforms last week, leaving the total count at a multiyear record of 758 units. Figures reawakened fears that crude inventories will soon build up again.

The American-based WTI contracts were down $1.73 or 3.9 percent on weekly basis, while the London-based Brent lost $1.67 or 3.8 percent.

Crude benchmarks have fallen nearly 20 percent since this year’s peak level, returning most gains registered during the first few months of 2017. Prices have turned to the downside despite OPEC’s recent extension of their production cuts until March 2018.

The output reduction agreement had little impact on global inventories. The target level continues steady at 1.8 million barrels per day, including independent producers like Russia.

Ahead these days, traders will be closely monitoring fresh inventory data from the American Petroleum Institute and the US Energy Information Administration on Tuesday and Wednesday respectively. Baker Hughes comes in on Friday.

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