Friday, 15 September 2017

What’s next? – GOLD, OIL 15.09.17

Posted by Anonymous at 11:08 Labels:

GOLD

Gold futures were higher in early trading hours on Friday, as safe-havens were in demand following a new missile test from North Korea.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.39 percent or $5.20 up at $1,334.50 a troy ounce as of 07:05 GMT.

Kim Jong Un’s government fired a missile late on Thursday that flew over Japan before landing in the sea, two thousand kilometers from Hokkaido, according to media outlets.

The United Nations Security Council (UNSC) will gather on Friday as of 19:00 GMT to again discuss actions against the communist national. The meeting was called by the US and Japan.

The yellow metal settled higher on Thursday as the greenback eased in the session despite upbeat inflation data rising expectations for new monetary policy changes later this year.

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

The US Commerce Department said consumer prices increased by 0.4 percent in August, outperforming expectations for a 0.3 percent build. The index also showed a 1.7 percent growth rate year over year, compared to an initially estimated 1.6 percent.

The core consumer price index, which excludes volatile components such as food, energy and transport, met analysts’ forecast of a 0.2 percent build.

In a separate report, the US Labor Department said with initial jobless claims fell by 14,000 to a seasonally adjusted 284,000. Economists had predicted a build to 300,000 applications.

Analysts are still resilient to the idea of further steps being taken in the monetary policy normalization process this year as inflation and labor market conditions are not meeting the regulator’s targets. Such dynamics tend to favor safe-haven assets such as gold.

A rising rates environment, on the contrary, is seen as negative for the precious metal, considering it is a dollar-denominated commodity.

OIL

Oil prices edged down in early trading hours on Friday, with market participants paying attention to the upcoming weekly rig count set for released later in the day.

The US West Texas Intermediate crude futures were trading 0.36 percent lower at $49.71 per barrel as of 07:05 GMT, while the London-based Brent contracts were down 0.40 percent to trade at $55.25 per barrel on the ICE Futures Exchange.

Baker Hughes will present its weekly oil rig count as of 18:00 GMT on Friday. Last week, the oilfield services provider reported a drop by 3 active drilling units, leaving the count at 756 units. However, the total rig count in the US, which includes oil and natural gas rigs, increased by 1.

Crude benchmarks settled in green territory on Thursday, extending previous gains as reports released earlier this week showed global oil demand is expected to grow in the near future.

The Information Energy Administration revised its demand growth forecast for 2017 by 100,000 barrels per day to 1.6 million bpd. Also, the Organization of the Petroleum Exporting Countries said production dropped by 76,000 barrels in August to 32.76 million.

Earlier this week, the US Energy Department reported a build in crude stockpiles of 5.9 million barrels for the week ended September 8, above the originally estimated 3.2 million b increase.

As for gasoline stocks, the number of barrels went down by 8.4 million, surpassing expectations for a 2 million barrels decline, while distillate products fell by 3.2 million barrels.

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