Gold Prices May Stall Ahead Of US Jobs Data, Crude Oil Aims Lower

Gold prices attempted to bounce against as a lull in relevant news-flow opened the door for a correction in moves driven by the recent swell in Fed rate hike speculation. The move higher fizzled intraday however as supportive US economic data drove the US Dollar higher alongside front-end Treasury bond yields. Not surprisingly, that tarnished the appeal of non-interest-bearing and anti-fiat assets.

Looking ahead, data on US factory and durable goods orders is due to cross the wires. Barring wild deviations from consensus forecasts however, the yellow metal seems unlikely to find follow-through in whatever outcomes cross the wires, with traders probably unwilling to commit to a firm bias before Friday’s official labor-market data is released. In the meantime, a period of digestion may be ahead.

Crude oil prices plunged after EIA inventory flow data crossed the wires. The report showed a far larger drawdown of raw material stocks than analysts expected, with 6.02 million barrels shed, compared to a mere 466.1k decline expected. That fell on deaf ears however as gasoline storage grew by 1.64 million barrels, topping forecasts calling for a smaller 1.04 million increase (and echoing analogous API data).

From here, a Census Bureau report on US crude oil exports through August may prove too dated to inspire a reaction from the markets. Yesterday’s EIA figures already showed that cross-border sales roared higher to 1.98 million barrels last week, the highest on record. The same report showed that output continued to climb while imports fell to the lowest on record since 1973.

Meanwhile, Saudi Energy Minister Khalid Al-Falih seemed to declare victory at meeting with his Russian counterpart in Moscow, saying the OPEC-led production cut effort “achieved its goal” and dismissing US shale growth as likely to be offset by firming demand in 2018. That seems rather bold considering WTI and Brent crude still down 6.9 and 1.5 percent in the year-to-date, respectively.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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