Monday, 18 September 2017

What’s next? – GOLD, OIL 18.09.17

Posted by Valentine at 10:33 Labels:

GOLD

Gold futures were lower early on Monday as investors’ sentiment slowly recovered from the latest North Korean missile launch and as the weekend did not come with further surprises.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.30 percent or $4.00 down at $1,321.20 a troy ounce as of 05:15 GMT.

Gold prices settled higher on Friday, with renewed geopolitical concerns from the Korean peninsula weighing on market sentiment while promoting the safe-haven demand.

North Korea launched a new middle-range ballistic missile that flew over Japan’s northern island of Hokkaido on Friday’s early hours. According to Kim Jong Un, the missile was a response to the latest pack of sanctions approved by the United Nations Security Council.

The UNSC held an emergency meeting to condemn the latest provocation from Pyongyang, asking all nations for a quick implementation of UNSC sanctions against the communist regime.

Over the weekend, US President Donald Trump and his South Korean counterpart, Moon Jae In agreed on that more severe sanctions should be applied against North Korea to increase its diplomatic and commercial blockage.

Also, Secretary of State Rex Tillerson said on Sunday that the military option is up if economic sanctions would not make meaningful effects to counteract Pyongyang’s aggressions.

On the data front, retail sales for August showed a 0.2 percent decline against a 0.1 percent build eyed. The industrial production index fell by 0.9 percent compared to a 0.1 percent increase initially estimated. Michigan’s consumer sentiment rose to 95.3, up from a forecasted 95.1.

Ahead this week, traders will be mainly focus on the September monetary policy meeting of the Federal Open Market Committee and remarks from Chairwoman Janet Yellen.

Today, attention will be directed to the release of August consumer inflation data in the Eurozone as of 09:00 GMT, and a speech of Bank of England Governor Mark Carney at 15:00 GMT.

OIL

Oil benchmarks edged up in early trading hours on Monday, with market participants digesting the latest US rig count and as they turn their heads to fresh inventory data due later this week.

The US West Texas Intermediate crude futures were trading 1.14 percent higher at $50.46 per barrel as of 05:15 GMT, while the London-based Brent contracts were up 0.16 percent to trade at $55.71 per barrel on the ICE Futures Exchange.

Crude prices settled in green territory on Friday, with expectations for higher demand and a lower global production cheering market participants and promoting long positions.

Oilfield services Baker Hughes said the US oil rig total count notched down to 749 units by Friday from a previous week reading of 756 platforms.

This was the third weekly consecutive decline. Oil rigs reductions suggest US producers will be scaling down its output in the next few weeks or months, which is seen as good for prices.

Commodities were also supported by recent reports from the Paris-based International Energy Agency and the Organization of Petroleum Exporting Countries.

The IEA upgraded its demand estimations for 2017 and it’s now forecasting a 1.6 million barrels a day demand, up from a prior 1.5 million barrels in July.

Meanwhile, OPEC said its output fell by 79,000 barrels a day to 32.76 million in August. The decline was a result of a draw in crude production in Libya, Iraq and Venezuela.

Last week, the US Energy Department reported a build in crude stockpiles of 5.9 million barrels for the week ended September 8, compared to an initially 3.2-million-barrel increase seen.

Ahead this week, traders will be pending on fresh inventories reports from the American Petroleum Institute on Tuesday and the Energy Information Administration on Wednesday.

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