Wednesday, 13 September 2017

What’s next? – GOLD, OIL 13.09.17

Posted by Valentine at 11:38 Labels:

GOLD

Gold futures were higher in early trading hours on Wednesday, with market participants looking ahead to key inflation data and economic reports in the United States.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.15 percent or $2.00 up at $1,334.70 a troy ounce as of 06:55 GMT.

The precious metal settled in red territory on Tuesday, extending previous session loses as market sentiment continued to improve in the light of a weaker-than-expected impact of hurricane Irma and as tensions in the Korean peninsula took a backseat.

Also weighing on gold was July’s JOLTs job openings, which came in at 6.170 million, above an originally estimated 5.960 million and a previous 6.116 million.

A rising number of job openings is seen as positive for the economy, showing the labor market is calling more people to work to comply with higher demand and expansion.

This report is relevant because the Federal Open Market Committee justifies monetary policy changes on stronger labor market conditions and sustainable inflation growth.

According to Fed funds tracked by CME Group’s FedWatch program, investors are currently pricing in a 41 percent probability of a 25 basis points rate hike by December.

A strengthening greenback also contributed to push gold prices down. The metal is a dollar-denominated commodity and a powerful currency makes it less attractive.

Ahead in the session, traders will be focusing on the release of the producer price index (PPI) for August as of 12:30 GMT, with a 0.3 percent build eyed. Last month’s Federal Budget Balance is due to be published at 18:00 GMT, with a $119.5 billion deficit seen.

OIL

Oil futures were slightly down in early trading on Wednesday as market players digested inventories data from the American Petroleum Institute and awaited official figures.

The US West Texas Intermediate crude futures were trading 0.06 percent lower at $48.20 per barrel as of 06:55 GMT, while the London-based Brent contracts were down 0.18 percent to trade at $54.17 per barrel on the ICE Futures Exchange.

Crude benchmarks settled in green territory on Tuesday as the latest OPEC report said production in August decreased by 79,000 barrels per day to 32.76 million barrels per day.

The move comes as key producers of the oil cartel reduced output levels, including Saudi Arabia, UAE, Iraq and Venezuela. Also, OPEC revised its global oil demand growth forecast to 98.12 million barrels per day, up by 1.35 million bpd.

“It is clear the rebalancing process is underway,” said OPEC’s Secretary General Mohammad Barkindo, expressing optimism over demand growth in the second part of 2017.

The document also showed that OPEC members were not concerned with the effects of hurricane Harvey along the Golf Coast, the heart of America’s energy refining industry.

Overnight, the American Petroleum Institute said crude reserves rose by 6.18 million barrels per day in the week ended September 8, above the 2.5 million expected.

Official data from the US Energy Information Administration will be out as of 14:30 GMT.

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