Friday, 18 August 2017

What’s next? – GOLD, OIL 18.08.17

Posted by Anonymous at 11:14 Labels:

GOLD

Gold prices rose in Asian trade on Friday, moving to two-month highs, as a terrorist attack in Spain increased demand for safe-haven assets.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.62 percent or $6.70 up at $1,299.10 a troy ounce as of 07:20 GMT.

A van was driven into pedestrians in one of Barcelona’s most popular areas in the summer season. The attack left 13 people dead and more than 100 injured.

While the so-called terrorist organization Islamic State claimed responsibility for this particular attack, Spanish authorities haven’t confirmed it yet.

A weaker US dollar was also supporting the yellow metal. Eight CEOs left the government’s business advisory councils on Wednesday in response to Trump’s remarks over the violence in Charlottesville, Virginia. Trump had said not only white supremacist were to blame.

Also, rumors that White House top economic adviser Gary Cohn was also leaving his job weighed on market sentiment. A WH official later denied such intentions from Cohn. Traders believe tensions between the administration and business leaders can affect further reforms.

The US dollar index, which gauges the greenback against a basket of six major currencies, was down 0.18 percent at 93.37.

Gold is sensitive to interest rates moves, which increase the opportunity cost of holding non-yielding assets such as the metal.

OIL

Oil futures rose in early trading hours on Friday, with market participants awaiting rig count data from the United States as the cheering effect of inventory data continued.

The US West Texas Intermediate crude futures traded 0.70 percent higher at $47.42 per barrel as of 07:40 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were up 0.27 percent to $51.17 a barrel.

On Thursday, benchmarks settled in green territory following a report from the US Energy Information Administration that shows crude reserves falling the most in eleven months.

The Energy Information Administration reported a 8.9 million barrels drop in the week ended August 11, beating expectations for a 3 million barrels drop.

However, gasoline reserves added 22,000 barrels, compared to a forecasted decline of 1.1 million barrels. Distillate products stockpiles rose by 702,000 barrels.

The agency also said weekly oil production moved to a two-year peak of 9.502 million barrels per day, adding 79,000 bpd last week, boosting oversupply worries among investors.

Traders are concerned about OPEC’s inability to counteract the ongoing supply overhang. The oil cartel extended its output cuts agreement until March 2018, with a volume of reduction standing at 1.8 million barrels per day.

A recent report from the Paris-based International Energy Agency said OPEC’s rate of compliance with the deal fell to 75 percent in July.

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