What’s next? – GOLD, OIL 16.01.18

GOLD

Gold futures were higher in Asian trading hours on Tuesday, with attention shifting to fresh data scheduled later in the day.

Germany and Great Britain will be releasing their latest readings on consumer price indexes as of 07:00 GMT and 09:30 GMT respectively.

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.52 percent at $1.341.80 a troy ounce as of 05:40 GMT.

The yellow metal settled near four-month highs on Monday, the American currency continued to lose ground against major competitors.

The US dollar index, which measures the greenback against six major currencies, was trading 0.52 percent lower at 90.26 by the time of this writing.

Gold is a dollar denominated commodity. A weaker greenback makes it cheaper and more attractive for investors holding foreign currencies.

No relevant economic reports were published in the session. US financial markets were closed in observance of Martin Luther King’s Day holiday.

Trading volume remained thin as all electronic transactions on the Comex on Monday were to be executed on Tuesday for settlement.

The American currency is nowadays a main conductor for the precious metal. On the dollar currently weighs two strong factors: fears over a fiscal deficit expansion and a soft economic agenda.

OIL

Crude futures were mixed in Asian trading hours on Tuesday, with traders awaiting fresh inventory reports on crude and refined products later in the week.

The US West Texas Intermediate crude contracts were up 0.31 percent to $64.50 per barrel as of 05:40 GMT. Meanwhile, Brent futures eased 0.69 percent to $69.99 a barrel.

Oil prices were mixed on this week’s first session, remaining close to multi-year highs as bullish positioning continued to dominate among market participants.

Trading volumes remained low on Monday as Nymex was closed due to Martin Luther King Day holiday in the United States. Transactions on Monday are to be executed on Tuesday’s session.

Traders are paying close attention to potential talks over a progressive exit from the OPEC-led output cuts. However, so far there is not a common agreement on the matter.

While Russia insists on determining how and when the process should begin, other nations consider it too early as the deal has been recently extended for another nine months.

Analysts believe crude prices have still room for gains in the next few months, especially as the production cuts continue to do its job in rebalancing supply / demand.

Since December 2017, quotes have risen more than 13 percent as the Organization of the Petroleum Exporting Countries and Russia announced the extension of their output cuts deal.

The American Petroleum Institute will release crude estimates at 21:30 GMT on Tuesday.

Fort Financial Services