What’s next? – GOLD, OIL 04.05.18

GOLD

Gold futures were up in early trading hours on Friday, with market players switching to fresh labor market data scheduled later in the day.

On the Comex division of the New York Mercantile Exchange, gold futures were up 0.09 percent at $1.313.90 a troy ounce as of 6:50 GMT.

The yellow metal settled moderately higher on Thursday, putting an end to a two-day losing streak as the dollar paused its decline on the back of higher geopolitical tensions.

The US dollar index, which measures the greenback’s strength against a basket of six major competitors, was unchanged at 92.26 by the time of this writing.

Dollar-denominated gold is sensitive to moves in the dollar. A stronger base currency makes gold more expensive for holders of foreign currency, damping interest for the safe-haven asset.

On the data front, initial jobless came in at 211,000 against an estimated 225,000 and a previous 209,000. Trade balance for March showed a deficit of $49 billion, a bit less than the $50 billion seen and the prior $57.70 billion.

In other news, services PMI for April established at 54.6 points, above an estimated reading of 54.4 points. Durable goods orders came in line with expectations at 2.6 percent. Factory orders rose 1.6 percent in March. The ISM manufacturing PMI fell short on its forecast at 56.8 points.

Sentiment on gold improved following less-hawkish-than-expected Federal Reserve remarks on Wednesday. Despite the US regulator acknowledged inflation is moving closer to its target.

Ahead in today’s session, investors will be looking at average hourly earnings, nonfarm payrolls and the unemployment rate as of 12:30 GMT.

OIL

Oil futures were higher in European hours on Friday, with market participants awaiting for a fresh look at the weekly oil rig count in the US later in the day.

The US West Texas Intermediate crude contracts rose 0.04 percent to $68.46 per barrel as of 11:30 GMT. Meanwhile, Brent futures were 0.05 percent higher at $73.66 a barrel.

Crude benchmarks settled in green territory on Thursday after Iran said it would not renegotiate terms of the nuclear deal signed in 2015.

Tehran is accusing Washington of “bullying,” and using potential sanctions against its nation to add pressure on their own interests.

The Trump administration has until May 12 to decide whether to pull out of the nuclear agreement. Lately, reports showed Iran could have been developing nuclear weapons secretly despite the deal in the last few years.

Sanction against Iran would contribute to a positive sentiment on crude prices as their crude production would probably be limited due to commercial restrictions.

Earlier this week, the US Energy Information Administration said crude production rose to 10.6 million barrels per day last week. Crude inventories added 6.218 million barrels.

Ahead in today’s session, Baker Hughes will release its weekly oil rig count at 18:00 GMT.

FortFS