Monday, 10 July 2017

What’s next? – GOLD, OIL 10.07.17

Posted by Anonymous at 10:52 Labels:

GOLD

Gold futures were lower in Asian hours on Monday, extending previous week losses on the back of a weaker sentiment and demand for safe-haven assets.

On the Comex division of the New York Mercantile Exchange, gold futures were down by 0.38 percent to trade at $1,205.10 a troy ounce as of 07:40 GMT.

The yellow metal fell moved to four-month lows on Friday following the release of better-than-expected employment figures in the United States.

According to the US Labor Department, the economy added 222,000 jobs in June, above an initially estimated 179,000 jobs build. The unemployment rate ticked up to 4.4 percent.

Strong unemployment data increased expectations for a third Federal Reserve hike later this year, which also support the greenback across the board, pushing the US dollar 0.21 percent higher to trade at 95.78 in late hours on Friday. Gold ended around $1,211.98 a troy ounce.

Gold is a dollar-denominated commodity and therefore, a stronger currency weighs on the metal, making it more expensive for investors holding foreign currencies.

The CME Group’s FedWatch program currently shows a 50.9 probability for a Fed rate hike by December. The short term rate was last adjusted in June by 25 basis points to 1.00-1.25 percent.

In the days ahead, attention will be directed to remarks from Fed Chairwoman Janet Yellen on Wednesday and the latest inflation report on Friday.

OIL

Crude were higher in Asian hours on Monday, with traders preparing for an OPEC meeting later this month in order to assess the ongoing output reduction plan.

The US West Texas Intermediate oil futures traded at $44.46 a barrel, up 0.07 percent from its prior close. Meanwhile, the London-based Brent crude oil futures added 0.09 percent to trade at $46.75 a barrel as of 07:40 GMT.

Ahead in the week, important releases will be US stockpiles from the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday. Also, attention will be directed to Friday’sBaker Hughes oil rig count.

Crude benchmarks settled in red territory on Friday as concerns that the OPEC-led output cuts won’t be able to counteract the expanding supply overhang. The WTI was down 3.9 percent and the Brent 4.2 percent on weekly basis.

Oilfield services provider Baker Hughes said on Friday that US drillers added seven rigs in the week ended July 7, leaving the total count at 763 units.

Last week, investors were cheered by the report of the US Energy Information Administration, which showed reserves falling 6.3 million barrels, against a forecasted drop of 2.3 million barrels.

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