Tuesday, 8 August 2017

What’s next? – GOLD, OIL 08.08.17

Posted by Anonymous at 10:21 Labels:

GOLD
Gold futures were higher in Asian hours on Tuesday as weaker dollar promoted demand for the metal in India and China, the world’s top importers.
On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.09 percent or $1.10 higher at $1,265.80 a troy ounce as of 06:20 GMT.
Economic data from China also supported the upward movement, with the trade surplus establishing at $46.74 billion in July, above an initially forecasted $46.08 billion.
Exports rose 7.2 percent and imports 11.0 percent last month. Both figures fell short from expected values. Analysts had predicted a 10.9 percent and 16.6 percent increase respectively.
The yellow metal remained near breakeven on Monday, although it was able to end slightly into green territory as remarks from FOMC speakers weighed on the American currency.
The US dollar index, which gauges the greenback against a basket of six major currencies, traded at 93.22, easing 0.10 percent by the time of this writing.
St. Louis Fed President James Bullard said current level of short-term interest rates is fine, suggesting no further rate adjustment are to be expected in the months to come.
“The current level of the policy rate is likely to remain appropriate over the near term,” Bullard stated at America’s Cotton Marketing Cooperatives 2017 conference in Nashville.
Gold is very sensitive to interest rate moves in the US, as they lift the opportunity cost of holding non-yielding assets such as the precious metal.
Attention this week will be mostly directed to Friday’s inflation data in the US, which is expected to provide gold with a fresh direction as traders assess chances for a third rate hike in 2017.
According to Fed funds tracked by CME Group’s FedWatch tool, market players are currently pricing in a 42.5 percent probability of a third rate hike by December.

OIL
Oil futures extended to the downside in Asian trade on Tuesday following downbeat trade data from China, the world's second biggest crude buyer and as traders eyed an industry report.
The US West Texas Intermediate crude futures traded 0.22 percent lower at $49.28 per barrel as of 06:50 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were down 0.27 percent to $52.23 a barrel.
Earlier in the session, China said trade surplus moved to $46.74 billion in July, above from an initially forecasted $46.08 billion and a prior $42.77 billion.
Exports rose 7.2 percent and imports 11.0 percent last month. Both figures fell short from expected values. Analysts had predicted a 10.9 percent and 16.6 percent increase respectively.
China’s authorities reported a 12 percent jump on yearly basis to 8.16 million barrels per day, although these results left imports at a seven-month low in July.
Ahead today, market participants are waiting for crude stockpiles from the American Petroleum Institute in anticipation to official inventories from US Energy Information Administration.
Crude benchmarks settled in red territory on Monday as renewed concerns over OPEC’s ability to counteract the ongoing supply overhang seemed to weighing hard on prices.
Investors are keeping their eyes wide open as leaders of the oil cartel gathered in Abu Dhabi to discuss a possible extension of output cut volumes to power up the agreement.
Last week, US shale oil production rose to 9.43 million barrels per day, marking its largest output level since 2015, adding a surprising 12 percent since June.
According to Reuters, the Organization of the Petroleum Exporting Countries produced 33 million barrels per day in July, its highest level in 2017, up 90,000 bpd from its prior reading.

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