What’s next? – GOLD, OIL 21.11.17

GOLD

Gold futures were up in early trading hours on Tuesday as market participants looked ahead to fresh economic reports from United Kingdom and the United States later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were higher 0.33 percent to $1.279.50 a troy ounce as of 05:50 GMT.

The yellow metal settled slightly lower on Monday, with no relevant economic data in the calendar and as uncertainty over President Trump’s tax reform continued to weigh on sentiment.

Investors have been speculating over a massive tax reform that would reduce taxes for individuals and corporations, pushing inflation levels higher and boosting economic growth.

By the end of last week, the House of Representatives gave green light to a bill that would lower taxes for individuals and corporations in 2018, which moves in the direction of Trump’s reform.

However, the project could face a tougher resistance in the Senate, even within its own Republican leadership. The Senate is expected to vote on the bill after Thanksgiving day.

No economic reports were released in the US on Monday. In Germany, the producer price index for October was in line with analysts’ expectations of a 0.3 percent m/m growth rate.

The US dollar index, which measures the greenback against a basket of six major rivals, was trading at 93.95, 0.06 percent to the downside by the time of this writing.

The precious metal is sensitive to fluctuations in the American currency. A stronger base-currency makes gold more expensive for investors holding foreign money.

Ahead in the day, traders will keep an eye on the UK’s inflation report hearings as of 10:00 GMT and CBI industrial trends orders for November at 11:00 GMT.

In the US, attention will be directed to existing home sales for October, with an estimated monthly growth of 0.7 percent to an annualized rate of 5.42 million units.

Federal Reserve Chair Janet Yellen is due to speak as of 23:00 GMT at the NY University.

OIL

Oil futures were higher in Asian hours on Tuesday as market players awaited industry estimates on crude and refined products stockpiles from the United States later in the day.

The US West Texas Intermediate crude contracts were up 0.11 percent to $56.48 per barrel as of 05:50 GMT. Brent futures were up 0.16 percent, to $62.32 a barrel.

Crude benchmarks held into negative territory on Monday, amid increasing US shale oil production and concerns that OPEC-led efforts will not be able to stop the supply overhang.

According to local data, US crude production has risen by more than 15 percent in the last few months from a mid-2016 low that had opened the way for benchmarks’ prices to recover.

All eyes are now pointing at the next OPEC + non-OPEC meeting in Vienna on November 30. Producers are expected to discuss a potential extension of the current output cuts deal.

The agreement, which counts on a reduction target of 1.8 million barrels per day, will meet its deadline in March 2018 after being renewed for nine extra months back in May.

Reports on Monday said Russia is not entirely supportive of the deal, despite Vladimir Putin seemed confident on the extension last month when he met Saudi Arabia’s king in Moscow.

The American Petroleum Institute will release its weekly report as of 21:35 GMT, in anticipation of official data from the US Energy Information Administration due on Wednesday.

Fort Financial Services