Friday, 14 July 2017
What’s next? – GOLD, OIL 14.07.17
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what’s next
GOLD
Gold lost shine in early trading hours on Friday, on the back of stronger US dollar following second-day remarks from Fed Chair Janet Yellen.
Speaking at the House Financial Services Committee, Yellen recognized the improvements of the US economy and said that plan to raise interest rates was still active.
In a rising rate environment, market participants feel less attracted by safe-haven assets such as the yellow metal. Plus, gold is a dollar-denominated commodity.
On the Comex division of the New York Mercantile Exchange, gold futures were down by 0.03 percent to trade at $1,216.90 a troy ounce as of 07:10 GMT.
On Wednesday, China’s trade figures contributed to repair pro-risk sentiment. Initial jobless claims came in at 247,000, two thousand more than the forecast. The producer price index grew 0.1 percent in June month-to-month.
Today, all attention will be directed to the release of June’s consumer price index, retail sales and industrial production in the United States.
Investors will closely monitor these reports as they assess probabilities for a rate hike later in the year. According to Fed funds gauged by CME Group’s FedWatch tool, players are pricing in a 47.2 percent probability for a rate adjustment by December.
In a separate report, the University of Michigan will present preliminary readings on its consumer expectation and consumer sentiment indexes, with 84.0 and 95.0 eyed.
OIL
Crude benchmarks slowed their growth in early trading hours on Friday, with market participants looking ahead of Baker Hughes oil rig count later in the day.
Oilfield services provider Baker Hughes is scheduled to release its weekly count on rigs operating in US soil as of 17:00 GMT. Last week, the company said US drillers added platforms, leaving the total count at 763 units.
The US West Texas Intermediate oil futures traded at $46.09 a barrel, up 0.02 percent from its prior close. Meanwhile, the London-based Brent crude oil futures eased 0.02 percent to trade at $48.41 a barrel as of 07:10 GMT.
Despite a little easing in Asian hours today, crude oil benchmarks had one of their best week in recent times in the light of larger-than-expected stockpiles decline in the United States.
The US Energy Information Administration said crude inventories decreased by 7.6 million barrels in the week ended July 7, compared to an initially forecasted drop of 2.850 m barrels.
On Thursday, Nigeria announced it would limit its crude output after stabilizing at 1.8 million barrels per day. In May, the country reported a production level of 1.733 million bpd.
Meanwhile, traders are looking ahead of an OPEC meeting on July 20 to define the course of the cut agreement and its effectiveness to push prices upward.
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