Friday, 8 September 2017

What’s next? – GOLD, OIL 08.09.17

Posted by Valentine at 12:41 Labels:

GOLD

Gold futures remained close to one-year highs on Friday, as the US dollar deepened loses on the back of downbeat labor market data and geopolitical concerns weighed on sentiment.

North Korea will celebrate on September 9 its founding anniversary, which is seen as an opportunity for the communistic government to make a new power show off.

Last weekend, Pyongyang conducted its sixth nuclear test by launching an hydrogen type bomb. This action was heavily criticized by the international community and elevated tension with the United States and other members of the UN Security Council.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.62 percent or $8.40 up at $1,358.70 a troy ounce as of 08:40 GMT.

The American currency fell under pressure on Thursday after the US Labor Department said initial jobless claims increased more than expected to 298,000 in the week ended September 1.

The US dollar index, which gauges the greenback against a basket of six major rivals, was down 0.45% at 91.23 by the time of this writing, near its lowest mark since 2015.

Market sentiment was also affected by tropical storms. Hurricane Irma, a category 5 storm, is now threatening to hit few areas of Florida. Experts believe Miami will be hit over the weekend.

Ahead in the day, traders will be paying attention to the speech of FOMC member Harker as of 12:45 GMT and the Baker Hughes’ weekly oil rig count at 17:00 GMT.

OIL

Oil markets were mixed in early trading hours on Friday, with the US benchmark falling under pressure following inventories and the Brent supported by Saudi’s decision to cut its supplies.

The US West Texas Intermediate crude futures were trading 0.31 percent lower at $48.94 per barrel as of 08:50 GMT, while the London-based Brent contracts were up 0.35 percent to trade at $54.68 per barrel on the ICE Futures Exchange.

West Texas Intermediate

Attention has now shifted to the development of three other hurricanes in the Caribbean and the Gulf of Mexico. Hurricanes Irma, Jose and Katia are threatening key production areas while the refinery sector is slowly recovering from the recent tropical storm Harvey.

On Thursday, traders were able to assess the impact of Harvey in stockpiles. The US Energy Information Administration said crude inventories dropped by nearly 8 percent last week.

Hurricane Irma - a Category 5 storm - has passed by Dominican Republic and Haiti and it is now heading for Cuba and the Bahamas. Experts believe Miami will be hit over the weekend.

International Brent

Elsewhere, the Brent crude futures were supported by the news that Saudi Arabia - the world’s largest oil producer - is cutting oil allocations to its international clients in October by 350,000 barrels per day. This action is meant to prompt up crude oil prices.

Ahead in the session, Baker Hughes will release its weekly oil rig count as of 17:00 GMT.

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