Tuesday, 1 August 2017

What’s next? – GOLD, OIL 01.08.17

Posted by Anonymous at 10:01 Labels:

GOLD

Gold prices edged up in early trading hours on Tuesday, with investors looking ahead of key economic reports later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were down by 0.23 percent to trade at $1,276.30 a troy ounce as of 05:15 GMT.

The yellow metal settled to the downside on Monday, trading near breakeven most of the day despite a continuous weakening of the US dollar, in which gold is denominated. A weaker currency usually benefits the metal as it becomes cheaper for investors holding foreign currency.

On Monday, gold futures traded in a tight range between $1,268.40 and $1,270.31 a troy ounce, with the US dollar index remaining close to its lowest level in fourteen months.

Investors are closely monitoring the political scene in Washington and the ongoing geopolitical crisis in the Korean peninsula. There are rising concerns about the ability of the current administration to impose its economic agenda in Congress, including the AHCA and tax reform.

In the meantime, President Donald Trump criticized China’s inaction on the North Korean crisis, saying it will be no longer tolerate it and that is a big disappointment for him.

Ahead in the session, traders will be looking at the core PCE price index, personal consumption and ISM manufacturing PMI. Inflation data plays a huge role for the Federal Reserve and expectations for a third rate hike later this year.

According to Fed funds tracked by CME Group’s FedWatch program, traders are currently pricing in a 42.5 percent probability for a rate hike by December.

OIL

Oil prices were higher in Asian hours on Tuesday as market participants awaited fresh inventory data and as a weaker dollar supported demand for commodities.

The US West Texas Intermediate crude futures traded 0.18 percent higher at $50.26 per barrel as of 05:15 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were up by 0.17 percent to $52.81 a barrel.

On Monday, crude benchmarks settled in green territory as the United States government announced a series of sanctions targeting Venezuela’s president Nicolás Maduro following a “sham” vote intended to redraft the country’s constitution.

Also contributing to higher oil prices were reports from several media outlets saying the Organization of the Petroleum Exporting Countries will hold an extraordinary meeting on August 7-9 in Abu Dhabi in order to discuss a possible enlargement of the current cut volumes.

Earlier this year, OPEC and non-OPEC producers decided to extend the so-called output cut agreement for a nine-month period to March 2018, although they limited reductions at 1.8 million barrels per day. So far, the deal hasn’t proven to be effective supporting crude prices.

Major energy ministers gathered last week in Saint Petersburg, Russia, and agreed to boost compliance over the output agreement, with OPEC de facto leader Saudi Arabia saying it would cap its oil exports at 6.6 million barrels per day.

According to the Paris-based International Energy Agency, OPEC’s compliance rate with the output deal was at nearly 78 percent in June.

Later in the session, investors will be paying close attention to fresh crude stockpiles from the American Petroleum Institute in anticipation of Wednesday’s official report from the US Energy Information Administration. Last week, the agency reported a much larger-than-expected decline.

No comments :

Post a Comment

Subscribe to: Post Comments ( Atom )