Tuesday, 19 September 2017

What’s next? – GOLD, OIL 19.09.17

Posted by Valentine at 11:51 Labels:

GOLD

Gold futures turned lower in early trading hours on Tuesday as geopolitical tensions continued to ease and investors looked ahead to the first day of Fed’s monetary policy gathering.

The Federal Open Market Committee begins its two-day September monetary policy meeting on Tuesday, with markets carefully following the event in search for hints on future decisions.

According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 42.5 percent probability of a 25 basis points rate hike by December.

There are no expectations for interest rates hikes this month, although investors are expecting some details on the plan to descale Fed’s massive balance sheet in the near future.

On the Comex division of the New York Mercantile Exchange, gold futures were trading at $1,310.80 a troy ounce, showing a steady dynamic as of 07:30 GMT.

The yellow metal settled in red territory on Monday, as the greenback extended gains across the board in the light a positive market sentiment and risk-on demand renewal.

Market players see the precious metal as an alternative preserve their capital in periods of instability and uncertainty. Gold is nowadays one of the most popular safe-haven assets.

Investors were cheered by remarks from Secretary of State Rex Tillerson, who said the US is working to push North Korea into a “constructive, productive dialogue”.

Today, Donald Trump will make his first appearance in the UN General Assembly, addressing world leaders on subjects such as Iran’s nuclear program and Venezuela’s military government, as well as the ongoing terrorist threats. The speech begins as of 14:30 GMT.

On the data front, building permits and housing starts for August are due at 12:30 GMT, together with export/import price indexes and second-quarter current account.

OIL

Oil futures extended gains in Asian trading on Tuesday as market players prepared for fresh inventory figures by the American Petroleum Institute (API) on crude and refined products.

The US West Texas Intermediate crude futures were trading 0.52 percent higher at $50.61 per barrel as of 08:10 GMT, while the London-based Brent contracts were up 0.27 percent to trade at $55.63 per barrel on the ICE Futures Exchange.

Economists are currently forecasting a 2.925 million barrels increase in crude stockpiles, a 2.025 million barrels draw in gasoline and a 1.175 million barrels drop in distillate inventories for the week ended September 15.

These reports will anticipate official data from the US Energy Information Administration, due for release as of 14:30 GMT on Wednesday. API and EIA data does not always correlate.

Oil benchmarks settled in green territory on Monday, with market players expected to see higher crude inventories following the hits of hurricanes Harvey and Irma.

Several news outlets reported that US refineries are showing much better than expected recovery from the recent tropical storms.

Last week, crude prices increased on the back of recent reports from the International Energy Agency and the Organization of Petroleum Exporting Countries.

The IEA elevated its demand estimations for 2017 to 1.6 million barrels a day, up from a prior 1.5 million barrels in July. Meanwhile, the OPEC reported a drop 79,000 barrels a day of its production to 32.76 million in August.

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