What’s next? – GOLD, OIL 08.02.18

GOLD

Gold prices were up in Asian trading hours on Thursday, with investors keeping an eye on speeches by Federal Open Market Committee members scheduled later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were down 0.14 percent at $1.312.70 a troy ounce as of 07:00 GMT.

The yellow metal settled lower on Wednesday, as the dollar was able to recover some positions while sentiment remained weak following Tuesday plunge in global stock markets.

Market sentiment came under pressure last week following the release of better-than-expected US employment data, which boosted speculation over future Federal Reserve rate hikes.

The Dow Jones industrial average was one of the most notable victims of the draw, as it recorded its worst daily fall in history on Monday.

Wall Street top three indexes have erased their 2018 gains in the last three sessions, adding to concerns that the Trump rally is officially over and market cycle is about to change.

The US dollar index, which measures the greenback against six major currencies, was trading 0.13 percent higher at 90.24 by the time of this writing.

The dollar-denominated metal is sensitive to changes in the dollar. A stronger base currency makes the precious metal more expensive for investors and therefore, reduces its demand.

No relevant economic data was released on Wednesday. Today, focus will be at the release of initial jobless claims as of 13:30 GMT, with a 6,000 applications build seen.

Attention will also be directed to a batch of speeches by FOMC members Kaplan (09:50 GMT), Harker (13:00 GMT) and Kashkari (14:00 GMT).

OIL

Oil prices were down in Asian hours on Thursday, with market players digesting official inventory data and looking ahead to the weekly oil rig count.

The US West Texas Intermediate crude contracts were down 0.34 percent to $61.54 per barrel as of 07:00 GMT. Meanwhile, Brent futures drop 0.15 percent to $65.41 a barrel.

Benchmarks settled lower on Wednesday following data that showed US production rising above 10 million barrels per day in the week ended February 2.

The US Energy Information Administration said US crude output was up 3.3 percent last week to a record-high 10.25 million bpd, which puts it really close to major global producers.

Regarding inventories, the report said crude supplies increased by 1.9 million barrels, against a 3.1 million barrels build seen. The American Petroleum Institute had previous estimated a 1.1 million-barrel drop.

Gasoline stockpiles also rose last week, adding 3.4 million barrels, while analysts had forecasted a 0.4 million barrels build. Distillate products were up 3.9 million barrels.

Oil prices pointed lower for a third straight session on Wednesday as market sentiment remained weak following a massive stock sell-off in the prior session and as the greenback continued to rise, dampening demand for dollar-denominated commodities.

The US dollar index, which measures the greenback against six major currencies, was trading 0.13 percent higher at 90.24 by the time of this writing.

Ahead in the week, attention will be at Baker Hughes’ oil rig count on Friday at 18:00 GMT.

Fort Financial Services