What’s next? – GOLD, OIL 24.11.17

GOLD

Gold futures were slightly lower in Asian hours on Friday as market participants prepared for a fresh batch of economic data, although Wall Street is set for an early close.

On the Comex division of the New York Mercantile Exchange, gold futures were lower 0.05 percent to $1.291.60 a troy ounce as of 05:45 GMT.

The yellow metal showed little changes on Thursday as US markets were closed for Thanksgiving day. Bullion was also under pressure following the release of Federal Reserve November 1 meeting minutes, which boosted demand for the dollar.

The latest minutes from the Federal Open Market Committee exposed an unified front on economic growth prospects, but continued to outline different opinions over future monetary policy changes as inflation levels remain below the 2 percent target.

According to Fed funds tracked by CME Group’s FedWatch tool, market participants are currently pricing in nearly a 100% probability of a rate hike by December.

The US regulator also insisted that the timing of future rate hikes will be determined by incoming data, which opens the door to a slower normalization in 2018.

The US dollar index, which measures the greenback against a basket of six major rivals, was trading at 93.09, 0.05 percent to the downside by the time of this writing.

Dollar-backed gold is very sensitive to changes in US interest rates. Higher rates boost demand for risky assets, dampening interest for safe-havens such as the metal.

Ahead in the day, traders will keep an eye in Europe and the United States alike. Germany’s business expectations, current assessment and lfo business climate for November are due for release at 09:00 GMT. In the US, manufacturing and services PMIs for Nov are up at 14:45 GMT.

OIL

Oil futures were mixed in early trading on Friday, with market players awaiting the weekly oil rig count while keeping a close look at OPEC’s effort to rebalance the supply overhang.

The US West Texas Intermediate crude contracts were up 0.69 percent to $58.42 per barrel as of 05:45 GMT. Meanwhile, Brent futures eased 0.24 percent, to $63.40 a barrel.

Crude benchmarks settled in green territory on Thursday, recovering from early losses as speculation grew over a potential extension of the OPEC-led output cuts agreement.

Trading on Thursday was quiet and thin as most market players remained out due to the Thanksgiving holiday. On Friday, Wall Street closes earlier than the usual time.

Earlier this week, the US Energy Information Administration said crude reserves fell 1.9 million barrels in the week ended Nov 18, more than an originally estimated 1.6 million-barrel drop.

As for gasoline supplies, EIA data exposed a 44,000 barrels increase which fell short from a forecasted 737,000 barrels build. Distillate products were up by 269,000 barrels against a predicted draw of 1.2 million barrels.

The American Petroleum Institute had previously reported a 6.356 million barrels decline in crude stockpiles, compared to a forecasted draw of 1.545 million barrels.

The Organization of Petroleum Exporting Countries (OPEC) and its allies led by Russia will meet next week in Vienna to decide whether products cuts should be extended beyond March.

Baker Hughes will release its weekly rig count as of 18:00 GMT.

Fort Financial Services