What’s next? – GOLD, OIL 12.04.18

GOLD

Gold futures were down in Asian hours on Thursday, as the greenback recovered moderately on the back of a stable inflation development amid rising geopolitical concerns.

On the Comex division of the New York Mercantile Exchange, gold futures were down 0.54 percent at $1.352.70 a troy ounce as of 06:30 GMT.

The yellow metal touched a two-week peak in late trading hours on Wednesday as rising US-Russia tensions over Syria offset a well-performing inflation in America.

The Trump administration warned Moscow about its position in the Syria conflict, suggesting serious military actions would be taken against Bashar al-Assad’s regime.

President Donald Trump tweeted: “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”

Earlier this week, the Republican leader told a group of reporters that “[the United States] have a lot of options, militarily. And we'll be letting you know pretty soon"

The US dollar index, which gauges the greenback against six major currencies, was trading 0.08 percent higher at 89.33 by the time of this writing.

Dollar-denominated gold is very sensitive to moves in the American currency. A weaker dollar makes the yellow metal more attractive for investors holding foreign currencies.

On the data front, the core consumer price index advanced 2.1 percent year-on-year in March, its best performance since February 2017, against a prior month 1.8 percent.

Ahead in this session, Eurozone’s industrial production for February will be published at 09:00 GMT. Also, the US export/import price index is up at 12:30 GMT.

OIL

Oil prices were higher in early trading hours on Thursday as market participants weighed geopolitical tensions ahead of OPEC’s monthly report.

The US West Texas Intermediate crude contracts were up 0.28 percent to $67.01 per barrel as of 06:45 GMT. Meanwhile, Brent futures rose 0.12 percent to $72.15 a barrel.

Oil benchmarks settled in green territory on Wednesday as a massive build in crude stockpiles was offset by increasing political tensions in the Middle East.

Political instability in the region could result in crude production disruptions, helping output cuts led by the Organization of the Petroleum Exporting Countries.

On Wednesday, Saudi Arabia's air defense forces said at least three ballistic missiles fired by Yemen's Houthis were successfully intercepted.

In this context, the Trump administration warned Moscow about its position in the Syria conflict, suggesting serious military actions would be taken against Bashar al-Assad’s regime.

President Donald Trump tweeted: “Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and “smart!” You shouldn’t be partners with a Gas Killing Animal who kills his people and enjoys it!”

The US Energy Information Administration said crude inventories grew in 3.306 million barrels for the week ended April 6, against expectations for a draw of 600,000 barrels.

Gasoline supplies were up 458,000 barrels, compared to an expected 1.425 million barrels drop seen. Distillate products fell 1.044 million barrels.

Ahead in the day, investors will keep an eye on OPEC’s monthly report.

FortFS