On Thursday, crude prices kept going down during early Asia trade, being weighed down by the ongoing growth in American oil stocks as well as the record-peak output by Saudi Arabia.
The combination of the two factors indicate that, notwithstanding the multiple supply disruptions as well as the steady dip observed in American production for recent months, the world’s still oversupplied.
In New York, September delivery light, sweet crude futures were worth $41.50 per barrel, down 0.5%. Meanwhile, October delivery Brent crude futures sagged 0.5%, trading at $43.83 per barrel.
Crude prices descended overnight after the Energy Information Administration data disclosed a 1.06 million-barrel growth in American crude inventories by August 5, thus pushing total stocks to 523.6 million barrels and also 37.7% above the five-year average for the same time of 2015.
The build actually reflects the soaring glut of refined products in the American market, that has led to lower margin and also reduced demand for oil.
Gold goes down in Asia
Gold tumbled during Asia trade as market participants booked profits and kept an eye open on the greenback’s weakness.
In New York, December delivery gold futures eased 0.06%, trading at $1,351.05 per troy ounce. September delivery silver futures ascended 0.15%, hitting $20.200 per troy ounce, while September delivery copper futures soared 0.23%, trading at $2.178 a pound.
Overnight, gold grew on Wednesday, as the greenback sagged steeply against a basket of its key counterparts, thus helping to provide a slight support to the most popular yellow metal in quiet, range-bound trade.
Market participants keep closely monitoring American employment data for a gauge on the strength of the labor market, following last Friday's upbeat jobs data for July. Additionally, on Wednesday, the US Department of Labor informed that in June, job openings soared by about 2% to 5.624 million from a relatively soft revised annualized rate of 5.514 million last month. Financial experts expected to see moderate surges on the month to 5.588 million.
On Tuesday, crude oil prices dared to rebound further during Asia trade from overnight dips as market participants took advantage of steep drops on global oversupply.
In New York, September delivery crude futures soared 0.35%, being worth $40.20 per barrel. Market participants are looking ahead to estimates of American crude as well as refined product stockpiles close to the end of the previous week from the American Petroleum Institute late on Tuesday. These figures are followed by more Wednesday’s closey-watched data from the American Department of Energy.
In London, on the ICE Futures Exchange, October delivery Brent crude futures earned 0.57%, trading at $42.38 a barrel.
Overnight, crude prices rebounded towards April minimums during Monday’s North American trade, thus reapproaching bear market territory as signals of surging production in America and soaring output among members of the OPEC countries weighed.
Gold stays at 3-week peak
Gold prices were still at their three-week peaks during European trade as market participants waited for new indications regarding the timing of a probable US interest rate hike this year.
December delivery gold futures sagged 0.03%, trading at $1,359.20 per troy ounce, just below a three-week high of $1,362.00 achieved last Friday. Yesterday, gold gained about 0.15%.
Market participants looked ahead to major US data later Tuesday in order estimate the overlal health of the world's greatest economy and whether it’s sturdy enough to warrant a rate lift later this year.
The Commerce Department is going to issue its June’s core personal consumption expenditure index along with personal income and spending for this month too.
The U.S. dollar index, gauging the greenback’s power against a trade-weighted basket of six key counterparts, slumped 0.2% being worth 95.56.
The greenback has been under great pressure during recent trading sessions amid waning hopes that the Fed will increase interest rates soon.
On Monday, during European trade gold prices slumped as market participants considered buying into surging equity markets rather than buying safe-haven assets, though prices kept to three-week peaks amid waning hopes that the Fed will lift interest rates a bit later soon.
In New York, December delivery gold futures slumped 0.18%, being worth $1,355.05 per troy ounce.
On Friday, gold prices leapt to a daily high of $1,362.00, the greatest value since July 11, after data demonstrated that the American economy surged much slower than expected during the second quarter, thus bringing the greenback to five-week minimums and helping market players to roll back hopes for a rate lift from the Federal Reserve.
The second quarter GDP boasted a 1.2% annualized growth rate, which is below hopes for a 2.6% surge, as the Commerce Department reported on Friday. as for the first quarter GDP, it got revised lower from 1.1% to 0.8%.
The disappointing data lessened the overall threat of an early interest rate hike from the Federal Reserve.
U.S. crude breaks below $40 as oil ends down 4 percent on glut
Reuters - U.S. crude tumbled below $40 per barrel on Monday for the first time since April, as oil prices settled down nearly 4 percent on heightened worries of a crude glut despite peak summer fuel demand.
A near 15-percent slump in U.S. crude prices in July, the worst monthly loss in a year, also triggered liquidation as trading began for August.
U.S. West Texas intermediate (WTI) crude plumbed $39.86, its lowest since April 20, before settling at $40.06, down $1.54, or 3.7 percent.
Brent crude closed down $1.39, or 3.2 percent, at $42.14 a barrel, after a session low of $41.87.
Not all oil statistics are bearish. A Reuters poll on Monday showed U.S. crude stockpiles may have fallen last week for the first time in 10 weeks.
Other data from last week showed the United States added 44 oil drilling rigs in July, the most for a month in two years, intensifying concerns that global production could again get to unmanageable levels like in 2014-2015.
Crude prices remain nearly 55 percent above 12-year lows of $26 to $27 hit in the first quarter.
But WTI and Brent have also slipped into bear market territory since last week after losing more than 20 percent from the 2016 highs above $50 that were hit in June.
On Friday, crude prices remained around April minimums as slowing economic growth threatened to drastically worsen ongoing oversupply of oil as well as refined products.
International Brent crude oil futures were worth $42.78, showing a 8 cent surge from their previous close. Meanwhile, US West Texas Intermediate crude futures traded at $41.16, rising 2 cents.
Brent achieved its lowest value since April during last trading session, hitting $42.56, while WTI boasted another minimum of $40.95 per barrel on Friday. Currently, both crude benchmarks are down approximately 20% since their last high in June.
Due to ongoing oversupply, American bank Goldman Sachs told this week that it didn’t expect a huge recovery in prices any time soon.
Financial experts are still expecting that crude prices will stay within a $45 per barrel to $50 per barrel trading range in mid-2017.
Besides this, some experts told that recent price drops in oil had been heavily overdone, especially as demand is still strong notwithstanding worries over future economic growth.
Gold soars as BOJ notes downside risks to economy
Gold grew during Asia trade as Japan’s number one financial institution moved cautiously in its recent policy review, but indicated that it might act in the future if required.
In New York, December delivery gold futures edged up 0.45%, being worth $1,347.25 per troy ounce. As for September delivery silver futures, they gained 0.57%, trading at $20.307 per troy ounce. At the same time, September delivery copper futures sagged 0.45%, being worth $2.206 per pound.
Market participants were on the lookout for moderate easing measures. While Japan’s prime minister Shinzo Abe disclosed a broad ¥28 trillion stimulus measure on Wednesday, Reuters posted that the Japanese government might only offer as much as ¥7 trillion in direct fiscal stimulus.
Still if Abe appears to be unable to deliver on his promises of jump starting the national economy with a broad stimulus initiative, then the BOJ could feel extra pressure to lower interest rates more into negative territory.
NYMEX and Brent dip slightly in Asia
On Wednesday, oil prices eased during Asia trade as industry data on American stockpiles appeared to be bearish.
According to estimates from the American Petroleum Institute, there was a sink of about 800,000 barrels the previous week, short of an expected descent of more than 2 million barrels, while the figures unveiled supplies at the oil-storage hub at Cushing, Okla surged by approximately 1.4 million barrels.
Additionally, Wednesday's government report could disclose that oil stockpiles sagged by about 2.3 million barrels for the week, with the 10th consecutive weekly sag in inventory levels nationwide. However, the current stockpile still remains above the five-year average by about 100 million barrels in spite of the recent drawdown.
In New York, September delivery WTI crude futures dipped 0.09%, hitting $42.88. Additionally, Brent crude sagged 0.15%, trading at $45.16 a barrel.
Overnight, American crude futures edged down to new 3-month minimums.
Gold prices edge down in Asia
Gold prices slumped during Asia trade with market participants glued for the latest policy review by the major American bank to be announced later today.
In New York, December delivery gold futures sank 0.24%, hitting $1,325.15 per troy ounce.
September delivery silver futures dipped 0.22%, trading at $19.640 per troy ounce, while September delivery copper futures surged 0.45%, trading at $2.233 per pound.
Overnight, the number one precious metal soared, remaining close to one-month minimums, as policymakers from the Federal Reserve obtained a final opportunity to digest a mixed pack of economic data ahead of a closely-watched interest rate verdict in the middle of the week.
The Federal Open Market Committee also dubbed FOMC is supposed to leave its benchmark interest rate at a targeted range 0.25%-0.50% for their fifth straight gathering. On Tuesday, the CME Group's Fed Watch tool placed the likelihood of a July rate lift at about 2.4%.
Aussie descends following mixed CPI data
The Australian dollar sagged during Asia trade after consumer price data kicked in a tad weaker than expected.
The currency pair AUD/USD was worth 0.7497, showing a 0.08% slump, while USD/JPY traded at 105.18, with a 0.52% rise.
In Australia, CPI data for the second quarter demonstrated a 0.4% soar quarter-on-quarter as expected. Meanwhile, the year-on-year figure was 1%, just a bit below the 1.1% pace observed.
As for year-on-year inflation - the most crucial number for the market as well as the Reserve Bank, it was somewhat higher than expected, hitting 1.5%.
Accordingly, the overall outcome is quite mixed, though still keeps alive the probability of a rate drop at the RBA's August board gathering. A lot will depend on how the RBA considers inflation pressures going ahead and that extent still-soft housing-related inflation. Obviously, soft non-tradable inflation might push Australia’s major financial institution over the line for a cut.
Brent and NYMEX earn in Asia as traders look ahead to API estimates
On Tuesday, crude oil prices held their revenues with traders cautious after bearish supply forecasts unsettled the energy market overnight and also ahead of industry estimates on American stockpiles.
The American Petroleum Institute is expected to publish its estimates of American crude and refined stockpiles late on Tuesday, with the US Department of Energy to issue its own more closely-watched data on Wednesday.
In New York, September delivery WTI crude futures soared 0.23%, hitting $43.23 per barrel, while October delivery Brent crude futures soared 0.33% at $45.28 per barrel.
Overnight, oil futures edged down abruptly, going down to a new three-month minimum, as continuing concerns regarding global oversupply as well as a resurgent American dollar remained in focus.
During Monday's trading session, crude sagged to its lowest value since late-April as market participants reacted to further indications of a supply glut on global energy markets.
Gold dips towards 1-month minimum ahead of Fed gathering
On Tuesday, gold kept extending its losses from the previous session during European trade, going down towards a one-month minimum, as market participants readjusted their trading positions ahead of the Fed’s two-day monetary policy gathering due to start later this day.
As a matter of fact, the Fed isn’t supposed to take action on interest rates at the conclusion of its gathering on Wednesday, though market participants are on the verge of scrutinizing its policy statement for new hints as for the timing of interest rate lifts within the next several months.
In New York, December delivery gold futures sank 0.18%, being worth $1,324.80 per troy ounce. Yesterday, the given commodity dipped to a session minimum of $1,311.10 per troy ounce, just higher a one-month minimum of $1,310.70, as renewed hopes for a Federal Reserve rate lift later this year drove the greenback.
A recent string of better than expected American data revived rumors that the Fed is going to lift interest rates before the end of 2016. Currently, interest rate futures are pricing in a 52% chance of a rate lift by December, compared to less than 20% the previous week and up from 9% at the beginning of this month.
Wall Street braces for a storm of news next week
Next week, the US stock market is going to be bombarded with news, thus giving market participants plenty to trade on, because earning kick into high gear as well as more than a dozen major banks are expected to hold their monetary policy gatherings.
The S&P 500 index surged 9.86 points to a new record close of 2,175.03. Then, for the week, the large-cap index edged up 0.6%. The Dow Jones Industrial Average earned up to 53.62 points to conclude at 18,570.85, adding approximately 0.3% for the week. Additionally, the Nasdaq Composite Index rose 26.26 points, closing at 5,100.16, thus finishing the week 1.4% higher.
The S&P 500 closed higher 2,135, a value where there had been a lot of resistance before, suggesting that the market has the breadth to push to 2,400, as chief technical strategist of BTIG, Katie Stockton, states.
As for the market’s upside momentum, it has been partly driven by better-than-anticipated earnings.
Gold struggles close to 3-week minimum with Fed in focus
On Monday, gold prices extended its losses from the previous trading session in Europe, holding close to a three-week minimum as the American dollar hovered at a more than four-month peak amid renewed hopes for a Fed rate lift later in 2016.
In New York, August delivery gold futures dipped to a session minimum of $1,313.10 per troy ounce, just above a three-week minimum of $1,310.70.
On Friday, prices dipped 0.57%, as renewed hopes for a Fed rate lift later this year backed the greenback and traders looked to buy into soaring equity markets rather than buying safe-haven assets.
The previous week the number one precious metal dropped 0.26%, the second weekly sink in a row.
A recent string of better than expected American data reignited rumors that the Fed is about to lift interest rates before the end of 2016. Currently, interest rate futures are pricing in a 45% chance of a rate lift by December, compared with less than 20% last week and up from 9% at the beginning of this month.
On Tuesday, gold prices struggled in softened European trade as market participants wait for comments from a barrage of Fed officials after the session in order to judge the overall balance of opinion for planning policy on prospect of further interest rate lift.
James Bullard, St. Louis Fed President is scheduled to speak a bit later today onGateway Chapter of National Association for Business Economics.
Also after today Daniel Tarullo, Fed Governor is expected to provide a series of remarks which were awaited on shadow bank. At the same time, Neel Kashkari Minneapolis Fed President is supposed to make comments on US economy as well as the role of the Fed.
In New York, August delivery gold futures fell 0.05%, trading at $1,356.00 per troy ounce.
Yesterday, gold futures prices fell 0.13%. That is because turnover is quite in global stock markets reduced demand for the number one precious metal.
Thong Le (Investing)