What’s next? – GOLD, OIL 06.04.18

GOLD

Gold prices were lower in Asian hours on Friday, with market players awaiting key labor market data in the United States to weigh expectations on further monetary policy changes.

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.21 percent at $1.331.30 a troy ounce as of 06:35 GMT.

The yellow metal traded lower on Thursday as demand for safe haven assets dropped after US government officials said negotiation a trade deal with China continues, boosting the dollar.

White House National Economic Council Director Larry Kudlow said Washington was hoping to reach an agreement with the Beijing.

“Our intention is not to punish anybody. Our intention is to open markets and investments and lower barriers — that’s the deal,” Kudlow said.

This posture is in strict contrast with White House Trade Adviser Peter Navarro, who had previously stated “the expectation is that at the end of 60 days there will be tariffs imposed.”

Ahead in today’s session, the trade dispute will remain in focus, but also attention will turn to a batch of fresh economic reports, including the latest employment figures in the US.

The Labor Department will present its employment report for March, which includes average hourly earnings, nonfarm payrolls, participation rate and the unemployment rate. Currently, economists estimate the following results: 0.2%; 203,000; 195,000 and 4.0% respectively.

The US dollar index, which measures the greenback against six major currencies, was trading 0.02 percent lower at 90.14 by the time of this writing.

OIL

Oil prices were trading lower in early hours on Friday, with investors looking ahead to Baker Hughes’ weekly oil rig count.

The US West Texas Intermediate crude contracts were down 0.82 percent to $63.02 per barrel as of 06:35 GMT. Meanwhile, Brent futures fell 0.73 percent to $67.83 a barrel.

Crude benchmarks settled in green territory on Thursday despite a sharp intraday decline from session highs as concerns over US-China relations eased.

Also contributing to the downturn was a report released by energy provider Genscape showing crude supplies in Oklahoma added to 2.5 million barrels for the week ended April 3.

Earlier this week, the US Energy Information Administration said crude stockpiles fell 4.617 million barrels last week, compared to expectations for a 1.4 million barrels build.

Gasoline stockpiles dropped 1.116 million barrels, below an expected draw of 1.264 million barrels. Distillate went down 537,000 barrels, down from a 1.134 million barrels reduction seen.

“We have raised our estimate for Brent in 2018 to $67.50 a barrel as the geopolitical risk premium has increased since the arrival of Mike Pompeo at the Secretary of State and John Bolton as National Security Advisor, making sanctions against Iran and Venezuela more likely,” Natixis Research said.

Ahead today, investors will be pending on Baker Hughes’ oil rig count at 17:00 GMT.

FortFS