Wednesday, 27 September 2017

What’s next? – GOLD, OIL 27.09.17

Posted by Anonymous at 10:25 Labels:

GOLD

Gold futures were lower in early trading hours on Wednesday as market sentiment continued to improve despite further developments regarding the Korean conflict.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.32 percent lower at $1,297.50 a troy ounce as of 05:10 GMT.

Gold futures settled in red territory on Tuesday as market players opted to take profits following strong gains in the light of rising tensions between the United States and North Korea.

The Treasury Department's Office of Foreign Assets Control (OFAC) announced a series of sanctions targeting eight North Korean banking institutions and 26 individuals for offering financial support to the development of Kim Jong Un’s nuclear program.

Treasury Sec. Steven Mnuchin said these measures are part of a strategy "to fully isolate DPRK in order to achieve our broader objectives of a peaceful and denuclearized Korean peninsula."

The yellow metal was also under pressure after Federal Reserve Janet Yellen insisted that the US regulator has to move forward with its monetary normalization process to avoid overheating.

“It would be imprudent to keep monetary policy on hold until inflation is back to 2 percent,” said Fed’s chief in prepared remarks at the National Association for Business Economics’ annual meeting in Cleveland.

According to Fed funds tracked by CME Group’s FedWatch tool, traders are currently pricing in a 74.6 percent probability of a 25 basis points rate hike by December.

A rising interest rates environment boosts risk assets demand, strengthening the US dollar across the board. Therefore, investors feel less attractive by gold.

On the data front, new home sales declined 3.4 percent in August to a seasonally adjusted 560,000 units. The Conference Board Consumer Confidence for September came in at 119.8.

OIL

Oil futures were higher in early trading hours on Wednesday as industry estimates showed a reduction in US crude stockpiles and as traders awaited official data later in the day.

The US West Texas Intermediate crude futures were trading 0.52 percent higher at $52.15 per barrel as of 05:05 GMT, while the London-based Brent contracts were up 0.36 percent to trade at $58.65 per barrel on the ICE Futures Exchange.

The American Petroleum Institute said crude inventories dropped by 761,000 barrels in the week ended September 22. Analysts had forecasted a 3.4 million barrels increase.

Gasoline stockpiles added 1.5 million barrels against expectations for a 962,000 barrels reduction. Distillates notched down by 4.5 million barrels, outperforming an expected draw of 2.4 million barrels. Supplies at the Oklahoma hub were up by 1.1 million barrels.

Market participants are now looking ahead to the release of official figures from the US Energy Information Administration as of 14:30 GMT, with a 3.4 million barrels build seen.

Crude benchmarks came under pressure in the previous session as Turkey issued serious threats to cut crude exports from Iraq’s Kurdistan region.

Turkish President Tayyip Erdogan threatened to suspend the pipeline that carries nearly half a million crude barrels per day from northern Iraq to the port of Ceyhan. This action is oriented to add pressure on the Kurdish autonomous region due to its independence referendum.

On Tuesday, investors continued to speculate over the extension of OPEC production cuts agreement beyond its March 2018 deadline.

The Organization of the Petroleum Exporting Countries and its allies have decided to postpone talks over this issue until their next meeting in November.

Back in May, the oil cartel and independent producers agreed to extend output cuts for a nine-month period, but opted not to modify the 1.8 million barrels per day reduction volume.

No comments :

Post a Comment

Subscribe to: Post Comments ( Atom )