Friday, 30 June 2017

What’s next? – GOLD, OIL 30.06.17

Posted by Anonymous at 10:44 Labels:

GOLD

Gold prices soared in early trading hours on Friday, with market players looking ahead of key economic data in Europe and the United States later in the session.

A new reading on the first-quarter UK gross domestic product is expected to catch all attention as of 08:30 GMT. EU’s consumer price index will be published at 09:00 GMT. As for the US, eyes will be placed at the core PCE price index and personal spending for May at 12:30 GMT.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were up by 0.10 percent to trade at $1,247.00 a troy ounce as of 04:45 GMT.

Inflation data in the US is key for investors as they try to figure whether the Federal Reserve will move forward with a third interest rate hike later this year. Inflation growth remains one of the main concerns for policymakers.

According to Fed funds tracked by CME Group’s FedWatch tool, market participants are currently pricing in a 47.5 percent probability of a rate move in December.

On Thursday, the yellow metal traded downwards as a batch of central bankers hinted on a possible reduction of their massive stimulus packages in the near future.

Higher interest rates promote high-yielding assets and put under pressure safe-haven such as gold as the opportunity cost of holding non-yielding assets increases considerably.

Also, rate hikes supports the dollar, in which gold is denominated, turning it into a more expensive investment alternative for traders holding foreign currency.
OIL

Oil futures were higher in Asian hours on Friday, heading for the largest weekly gain since mid-May on the back of an output reduction in the United States and as market players looked ahead of the latest oil rig count later in the day.

Oilfield services provider Baker Hughes is due to release its weekly oil rig count as of 17:00 GMT. Last week, the company said US drillers added 11 platforms, marking the 23th consecutive week, to leave the total count at 758 units.

The US benchmark West Texas Intermediate oil futures traded at $45.20 a barrel, up 0.60 percent from its prior close. Meanwhile, the London-based Brent crude oil futures fell 0.67 percent to trade at $47.74 a barrel as of 04:05 GMT.

This has been a bullish week for oil benchmarks. Wednesday’s data from the US Energy Information Administration created positive momentum and drove prices higher. But not only a decrease in US output supported crude contracts, a weaker dollar also came into play.

The US dollar index, which tracks the greenback against a basket of six major rivals, was 0.09 percent lower by the time of this writing, to trade at 95.28, its weakest level since October 2016.

According to the EIA’s report, US production dropped by 100,000 barrels per day in the week ended June 23 to 9.3 million barrels per day.

While in recent weeks we’ve seen traders unloading long positions, analysts are now pointing out that the pessimism that has pushed benchmarks lower could actually be unjustified.

No comments :

Post a Comment

Subscribe to: Post Comments ( Atom )