Friday, 6 October 2017

What’s next? – GOLD, OIL 06.10.17

Posted by Valentine at 11:45 Labels:

GOLD

Gold futures edged down in Asian trade on Friday as market participants prepared for the latest US nonfarm payrolls, although data is widely expected to show asymmetrical results following the recent hurricanes in Texas and Florida.

On the Comex division of the New York Mercantile Exchange, gold futures were trading 0.19 percent higher at $1,270.80 a troy ounce as of 08:20 GMT.

The yellow metal showed little changes on Thursday, as upbeat economic data in the United States offered further support for the dollar and increased expectations for policy adjustments.

The US dollar index, which gauges the greenback against a basket of six major rivals, was trading at 93.94 by the time of this writing, up 0.15 percent.

Gold is a dollar-denominated commodity. A stronger greenback makes the metal more expensive for investors holding foreign currencies.

On Thursday, the US Labor Department said initial jobless claims dropped 12,000 to a seasonally adjusted 60,000 in the week ended Sept 30. Analysts had estimated a 7,000 draw.

In other news, the trade deficit fell to $42.4 billion in August, narrowing by $1.2 billion from July. Exports in the August moved to $195.3 billion, while imports were $237.7 billion.

The September nonfarm payrolls, unemployment rate and average hourly earnings are due for release as of 12:30 GMT. Economists are expecting a 90,000 jobs build for the last month.

Also, market players will be paying close attention to remarks from FOMC members Bostic at 13:15 GMT, Rosengren at 15:45 GMT, Dudley at 16:15 GMT, Kaplan at 16:45 GMT and Bullard at 17:00 GMT. Investors will analyze the rhetoric regarding further interest rate hikes.

According to Fed funds tracked by CME Group’s FedWatch program, investors are pricing in a 81.7 percent chance of a 25 basis points interest rate hike by December.

OIL

Crude futures dropped in early trading hours on Friday as investors awaited the weekly oil rigs count later in the day, but losses were capped by reports saying tropical storm Nate is heading to the Gulf of Mexico, the heart of America’s energy production.

The US West Texas Intermediate crude contracts were 0.08 percent down at $50.75 a barrel by 08:20 GMT. Elsewhere, Brent crude futures were up 0.32 percent at $57.18 a barrel.

Oil benchmarks settled in green territory on Thursday as market participants saw higher chances of an extension to the OPEC and non-OPEC output cuts deal.

Saudi King Salman visited Moscow this week, fueling expectations that both countries will talk about the production agreement and its potential renewal beyond its March 2018 deadline.

OPEC and non-OPEC producers agreed in May to extend the deal for nine months after its first deadline in June 2017. However, cuts volumes remained steady at 1.8 million barrels per day.

Earlier this week, Russian President Vladimir Putin said in an energy forum in Moscow that the output agreement could be extended “at least until the end of 2018”.

Market players are currently weighing the possibility of an OPEC deal extension against concerns about rising crude production in the United States and Libya.

On Wednesday, the US Energy Information Administration reported a 6.023 million barrels reduction in crude stockpiles for the week ended September 29, compared to an initially forecasted decline of 756,000 barrels.

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