Tuesday, 24 October 2017

What’s next? – GOLD, OIL 24.10.17

Posted by Valentine at 11:13 Labels:

GOLD

Gold futures were higher in early trading hours on Tuesday, as market focus shifted to fresh activity indexes from Europe and the United States set for release later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.27 percent to $1.284.40 a troy ounce as of 05:25 GMT.

Markit Economics will release Germany’s manufacturing and services PMI indexes for October as of 07:30 GMT, with readings of 60.2 and 55.6 points seen respectively.

In the Eurozone, manufacturing and composite PMI indexes will be available at 08:00 GMT. Analysts are currently pointing at 57.8 and 56.5 for October. The services PMI is due one hour later, with a 55.6 reading eyed. No relevant economic reports were presented on Monday.

Manufacturing, composite and services PMI for October in the United States will be out at 13:45 GMT. Consensus is predicting advances in both spheres.

On Monday, the yellow metal ended with little changes as the dollar continued to strengthen across the board on the back of optimism related to Trump’s tax reform.

The first session of the week did not bring relevant economic data to the play, which served well for those keeping bearish positions in search for downward extension.

Main attention this week is directed to Friday’s inflation report in the United States, as data could have a strong impact on expectations for further Federal Reserve interest rate hikes.

According to Fed funds tracked by CME Group’s FedWatch tool, investors are currently pricing in more than a 90 percent chance of a rate hike by December.

Gold, dollar-denominated metal, is extremely sensitive to interest rate changes. A raising interest rate environment makes the metal more expensive for investors holding foreign currencies.

OIL

Oil futures traded higher on Tuesday, with market players looking ahead to fresh inventory data from the American Petroleum Institute due for release as of 20:35 GMT.

The US West Texas Intermediate crude contracts were up 0.09 cents, or 0.17 percent, to $51.99 per barrel as of 05:25 GMT. Brent futures added 0.09 cents, or 0.16 percent, to $57.46 a barrel.

On Monday, crude benchmarks settled in green territory as investors’ sentiment was supported by an ongoing conflict between Iraqi and Kurdish forces.

According to local sources, oil exports from Northern Iraq continued to drop due to disruptions, boosting prices as supply levels are likely to go down faster.

Over the weekend, shipping sources told Reuters crude flowing through Kurdistan’s via was around 200,000 barrels per day, down from regular levels.

Optimism among crude traders was also supported by the latest US oil rig count by Baker Hughes.

The oilfield services provider said Friday the number of oil platforms operating in the country declined by seven for a third consecutive week.

Meanwhile, traders also keep an eye on the Organization of the Petroleum Exporting Countries, which is set to define the future of its controversial output cuts agreement on November 30.

Ahead in the week, traders will be paying attention to official crude and refined products inventories from the Energy Information Administration on Wednesday and Baker Hughes’ oil rig count on Friday.

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