Tuesday, 15 August 2017

What’s next? – GOLD, OIL 15.08.17

Posted by Valentine at 11:09 Labels:

GOLD

Gold futures turned downwards in Asian hours on Tuesday as tensions in the Korean peninsula eased and the US dollar was able to recover ground across main competitors.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.83 percent or $10.70 lower at $1,279.70 a troy ounce as of 07:15 GMT.

Top US military officials met with South Korea President Moon Jae-in and his defense minister to discuss the current threats from North Korea. Marine Corps General Joe Dunford said the Trump administration is looking forward for a peaceful, diplomatic resolution to this conflict.

However, Dunford also pointed out that the military alternative to take the lead in this situation would be considered if economic sanctions against Pyongyang are simply not enough.

The US dollar index, which tracks the greenback against a basket of six major rivals, was trading at 93.71 by the time of this writing, adding 0.43 percent.

Gold prices were on high demand last week after President Donald Trump said any threat from the Korean regime will be met with “fire and fury”. The yellow metal usually benefits from periods of uncertainty and market stress.

While bullion prices gave a step back, losses were limited by downbeat economic data from the United States, which suggests further monetary policy adjustments would have to wait longer.

Last week, the US Labor Department said consumer prices were up by only 0.1 percent in July, falling short from an initially expected 0.2 percent build.

Ahead in the session, traders will be looking at July’s retail sales, export/import price indexes and August’s NY Empire State manufacturing index as of 12:30 GMT. Business inventories for June are due at 14:00 GMT. Tic Net long term transaction are scheduled at 20:00 GMT.

OIL

Oil prices were higher in early trading hours on Tuesday as market participants prepared for fresh inventory data expected to show a decline of crude stockpiles.

The American Petroleum Institute (API) will present its weekly inventories report on crude and refined products late on Tuesday, in anticipation of Wednesday’s official data from the US Energy Information Administration.

Market analysts are forecasting a 3.176 million reduction in crude reserves for the week ended July 11. As for gasoline stockpiles, there is a 1.527 million drop seen.

The US West Texas Intermediate crude futures traded 0.08 percent higher at $47.63 per barrel as of 07:15 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were up 0.16 percent to $50.81 a barrel.

Crude benchmarks settled in red territory on Monday after China reported a 50,000 barrels per day cut of its monthly oil demand in July, while concerns over OPEC’s ability to counteract an ongoing output glut weighed on market sentiment.

The programmed production cuts of the Organization for the Petroleum Exporting Countries continues to be a hot topic for investors. According to a reported issued by OPEC itself, their production rose to 33 million barrels per day in July, far from moving down.

The Paris-based International Energy Agency said compliance with the output cuts was about 75 percent in July, which traders believe it is a very weak level.

Contributing to pressure, oilfield services provider Baker Hughes said US producers added three oil rigs last week, leaving the total count at 768 units.

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