Wednesday, 23 August 2017

What’s next? – GOLD, OIL 23.08.17

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What’s next? – GOLD 23.08.17

Gold futures edged lower in Asian hours on Wednesday as market participants awaited a series of speeches from key central bankers at the Jackson Hole symposium in Wyoming.

Traders believe central bank representatives will provide clues on interest rates and plans to unwind their multiple stimulus programs.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.06 percent or $0.80 down at $1,291.80 a troy ounce as of 06:55 GMT.

The yellow metal ended Tuesday’s session in red territory as the US dollar recovered from previous losses ahead of the central banking event and as markets looked forward to Federal Reserve Chair Janet Yellen’s remarks on Friday.

Gold prices were also under pressure as no further developments in the Korean peninsula suggested an imminent armed conflict between Washington and Pyongyang.

European Central Bank President Mario Draghi is due to speak as of 07:00 GMT on Wednesday, with market participants paying close attention to his rhetoric.

Draghi recently suggested that the ECB was considering changes to its current monetary policy configuration as the regional economy continued to improve, despite inflation is still weak.

Analysts believe the metal could move higher as comments from FOMC member Robert Kaplan get closer. Kaplan is due to speak as of 13:05 GMT. Also, traders will count on fresh manufacturing and services activity indexes, as well as new home sales.

What’s next? – OIL 23.08.17

Oil prices dropped in early trading hours on Wednesday as traders digested mixed US inventory data while awaiting for official figures later in the day.

The US Energy Information Administration will present its weekly report on crude stockpiles as of 14:30 GMT, with analysts pointing to a 3.45 million barrels decline.

The US West Texas Intermediate crude futures traded 0.52 percent lower at $47.58 per barrel as of 07:25 GMT, while the London-based Brent contracts on the ICE Futures Exchange in London were down 0.44 percent to $51.64 a barrel.

Overnight, the American Petroleum Institute (API) said US crude reserves decreased by 3.6 million in the week ended August 18. However, the report also showed gasoline supplies adding 1.4 million barrels and distillates rising by 2.0 million barrels.

Analysts had forecasted a 3.375 million barrels decline in crude stockpiles, a 300,000 barrels draw in gasoline reserves and a 38,000 barrels increase in distillates.

Crude benchmarks were able to settle in green territory on Tuesday. Traders are not only looking ahead of fresh inventories but also to Friday’s oil rig count in the United States.

Gains however were limited by growing concerns that OPEC’s 1.8 million bpd output cuts would not be enough to counteract the ongoing supply overhang and support prices.

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