Thursday, 10 August 2017
What’s next? – GOLD, OIL 10.08.17
Labels:
what’s next
GOLD
Gold futures retained previous gains in Asian hours on Thursday, with market participants closely monitoring the geopolitical crisis in the Korean peninsula while keeping an eye on data.
On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.43 percent or $5.50 higher at $1,284.80 a troy ounce as of 06:35 GMT.
The yellow metal rose to one-week highs in the prior session as safe-havens demand spiked on the back of rising tensions between North Korea and the United States.
Kim Jong-un’s government said it was "carefully examining" a possible attack on Guam, an unincorporated territory of the US in the western Pacific Ocean. President Trump reassured that any threat to his country will be met with “fire and fury”.
But the precious metal could take a downturn if today’s producer price index exceeds analysts expectations, building a stronger case for the Federal Reserve to continue hiking interest rates.
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.
Last month, the US central bank left its short-term rates unchanged but hinted that a third rate hike this year is still possible if labor market conditions and inflation support the case.
A rising rates environment increases the opportunity cost of holding non-yielding assets such as the dollar-denominated metal, at the same time it promotes demand for the American currency.
OIL
Oil benchmarks moved to the upside in early trading hours on Thursday, with inventories data contributing to gains but the geopolitical tension in the Korean peninsula limiting the movement.
The US West Texas Intermediate crude futures traded 0.36 percent higher at $49.74 per barrel as of 07:00 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were up 0.44 percent to $52.93 a barrel.
Oil futures settled in green territory on Wednesday following a sharp decline in US crude reserves in the week ended August 4, although a rise in gasoline supplies capped gains.
The US Energy Information Administration said crude reserves fell by 6.5 million barrels against expectations for a 2.7 million barrels reduction. Gasoline stockpiles, on the contrary, increased by 3.4 million barrels compared to analysts expected decline of 1.5 million barrels. Distillate products decreased by 1.7 million barrels, outperforming an estimated drop of 131,000 barrels.
A day earlier, the American Petroleum Institute reported a crude inventories drop of 7.8 million barrels to a total of 478.4 million barrels.
As the Organization of the Petroleum Exporting Countries ended its two-day meeting in Abu Dhabi, it noted that “countries remain steadfast in their commitment to fulfill” the output cuts agreement until March 2018. Compliance continues to be a big question for investors.
Ahead in the week, oilfield services provider Baker Hughes will present its weekly oil rig count on Friday as of 17:00 GMT.
Subscribe to:
Post Comments
(
Atom
)
No comments :
Post a Comment