What’s next? – GOLD, OIL 14.02.18

GOLD

Gold futures were higher in early trading hours on Wednesday, with investors awaiting key economic reports later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.49 percent at $1.336.90 a troy ounce as of 05:10 GMT.

The yellow metal traded slightly above breakeven in late hours on Tuesday, supported by a weaker dollar as market players looked ahead of inflation data in the United States.

Inflation is a key gauge for Federal Reserve policymakers. The Consumer Price Index is due for release as of 13:30 GMT on Wednesday, with a 0.3 percent build seen.

At the same time, retail sales figures for January will be presented, with analysts’ forecasting a 0.5 percent month-over-month growth.

Also, business inventories for December are expected to be released at 15:00 GMT.

Higher inflation would boost speculation on further monetary adjustments. That would also support the greenback and therefore, weight on the precious metal.

The US dollar index, which measures the greenback against six major currencies, was trading 0.23 percent lower at 89.39 by the time of this writing.

The dollar-denominated metal is sensitive to changes in the US currency. A weaker greenback makes the metal more attractive for investors holding foreign currencies.

No relevant data was presented in the previous session. However, market participants paid attention to news concerning the appointment of a vice chair for the Federal Reserve.

Sources related to the matter said the White House is thinking of Cleveland Fed President Loretta Mester as a potential candidate for the job. San Francisco Fed President John Williams seems to be also in the list of possible recruits.

OIL

Crude oil prices were higher in early Asian hours on Wednesday, with investors digesting industry estimates while looking ahead to official figures later in the day.

The US West Texas Intermediate crude contracts were down 0.05 percent to $59.16 per barrel as of 05:10 GMT. Meanwhile, Brent futures added 0.11 percent to $62.79 a barrel.

Overnight, the American Petroleum Institute said its crude supplies increased by 3.947 million barrels, above a 2.825 million barrels build seen.

Gasoline stockpiles were up 4.634 million barrels, against an estimated rise of 1.229 million barrels. Distillates added 1.095 million barrels, while analysts forecasted a 1.130 mb decline.

The US Energy Information Administration will release its weekly crude and refined products stockpiles report as of 15:30 GMT. The API and EIA reports often diverge.

Ahead in the week, investors will turn to the oil rig count, which is due on Friday at 18:00 GMT.

Last week, Baker Hughes said the total count added 26 to 791. The move boosted bets on that US shale producers will ramp up their output to take advantage of higher prices.

The previous report by the EIA showed US production rising above 10 million barrels per day, which puts the country among top world producers such as Russia or Saudi Arabia.

Commodity prices were supported by an ongoing dollar weakening, which has been gaining momentum across the board in the past two sessions.

The dollar-denominated crude is sensitive to changes in the US currency. A weaker greenback makes the contract more attractive for investors holding foreign currencies.

The US dollar index, which measures the greenback against six major currencies, was trading 0.23 percent lower at 89.39 by the time of this writing.

FortFS