What’s next? – GOLD, OIL 20.02.18

GOLD

Gold futures were lower in early trading hours on Monday, with market players looking ahead to fresh data later this week, while keeping an eye on the dollar’s dynamic.

On the Comex division of the New York Mercantile Exchange, gold futures were down 1.03 percent at $1.342.20 a troy ounce as of 06:25 GMT.

The yellow metal settled in red territory on Monday, as the American currency recovered moderately despite news from the political sphere threatened its position against competitors.

The US dollar index, which measures the greenback against six major currencies, was trading 0.34 percent higher at 89.32 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.

Trading volumes were below average as markets in the United States and China were closed in observance of the President’s Day and the Lunar New Year respectively.

The greenback was supported by last Friday’s homebuilding report, which exposed a build to more than one-year peak in January, while building permits reached its highest since 2007.

These figures were enough to calm down investors, which have been increasingly worried about the estimated US deficit for 2019, nearly $1 trillion.

Market players remained cautious with the dollar as Special Counsel Robert Mueller charged thirteen Russians and three Russian companies for interfering in the 2016 presidential election.

Traders will be focusing mainly in the European session today, as no economic data is scheduled in the United States. Germany’s producer price index for January is up at 07:00 GMT, followed by ZEW current conditions and economic sentiment for February at 10:00 GMT.

Later on, the United Kingdom will be releasing CBI industrial trends orders by 11:00 GMT.

OIL

Crude oil prices were mixed in early Asian hours on Tuesday as traders awaited new crude inventories estimates later this week.

The US West Texas Intermediate crude contracts were up 1.10 percent to $62.23 per barrel as of 06:25 GMT. Meanwhile, Brent futures eased 0.26 percent to $65.50 a barrel.

Crude benchmarks continued to trade near one-week highs on Monday, as tensions in the Middle East and OPEC-led cuts served a solid support for market sentiment.

Israel Prime Minister Benjamin Netanyahu said over the weekend that his nation could take serious steps against Iran due to ongoing border conflicts in Syria.

United Arab Emirates energy minister Suhail al-Mazroui said the world’s top producers, starring Saudi Arabia and Russia, are discussing a potential long-term agreement to keep output down.

The Organization of the Petroleum Exporting Countries (OPEC) together with Russia and other independent producers agreed in December to extend cuts until the end of 2018.

On the data front, Baker Hughes said on Friday the weekly oil rig count has risen by 51 to 798. This massive build in the count anticipates a potential increase in near-term output.

The US dollar index, which measures the greenback against six major currencies, was trading 0.34 percent higher at 89.32 by the time of this writing.

The American Petroleum Institute is expected to release its crude and refined products stockpiles estimates for last week on Wednesday, a day later than the usual as markets remained closed on Monday in observance of the President’s Day holiday.

FortFS