Monday, 31 July 2017

What’s next? – GOLD, OIL 31.07.17

Posted by Anonymous at 10:10 Labels:

GOLD

Gold futures notched down in Asian hours on Monday as market participants received a weaker than expected Chinese manufacturing and non-manufacturing activity indexes for July.

On the Comex division of the New York Mercantile Exchange, gold futures were down by 0.06 percent to trade at $1,274.50 a troy ounce as of 05:16 GMT.

China’s manufacturing PMI moved to 51.4 in July, expanding below expectations, while the activity index for the services sector came in at 54.5, also falling short of forecasted values. The Caixin manufacturing index is set for release on Tuesday, with an estimated reading of 50.4.

The Asian giant is expecting continuing growth in the services sector, which last year accounted for nearly half of China’s economy. Higher wages give the Chinese people an opportunity to spend more in a wide range of areas, which also serves to boost consumption.

The yellow metal ended last week in green territory, close to a one-and-a-half month peak following downbeat inflation data from the United States. Expectations for a Federal Reserve interest rate hike in December are currently standing at 42.5 percent.

The US dollar index, which gauges the greenback against a basket of six major rivals, ended 0.61 percent to the downside at 93.20 on Friday, its weakest level since June 22, 2016.

Earlier in the session, Japan presented its industrial production index for June, which came in at 1.6 percent, against an estimated 1.7 percent growth.

OIL

Oil prices moved up in early trading hours on Monday as Chinese manufacturing and services PMI indexes boosted expectations for a higher crude demand in the near future.

The US West Texas Intermediate crude contract for September delivery was 0.40 percent higher to $49.91 per barrel as of 06:15 GMT. Meanwhile, Brent futures on the ICE Futures Exchange in London were slightly down by 0.15 percent to $52.44 a barrel.

China’s manufacturing PMI rose to 51.4 in July, expanding below expectations, while the activity index for the services sector came in at 54.5, also falling short of forecasted values. The Caixin manufacturing index is set for release on Tuesday, with an estimated reading of 50.4.

A few hours earlier, Japan said its industrial production index grew 1.6 percent in June, against an estimated growth rate of 1.7 percent.

On Friday, oilfield services provider Baker Hughes said US drillers added two oil rigs to 766 units, showing a smoother growth compared to previous weeks.

Oil benchmarks settled in green territory last week, posting their strongest weekly gain so far this year as market players bet on rising demand in the second part of 2017.

Also, energy authorities from Saudi Arabia and Nigeria continued to promise that crude exports and output will be scaled down further in the future, boosting sentiment among investors.

Last week, the US Energy Information Administration reported a much higher-than-expected decrease in crude stockpiles of 7.208 million barrels against a forecasted decline of 2.6 million.

Later on, attention will be directed to fresh stockpiles data from the American Petroleum Institute on Tuesday and the EIA on Wednesday.

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