Oil surges on rising demand forecasts; gold stalls
(FinancialPress) — Crude prices are on the rise on the heels of the IEA‘s forecast of rising demand for 2018 and 2019. The forecast also revealed that the market has overcome fear of lacking oil supply that was fueled earlier in the year by the output cuts adopted by an OPEC-led group of producers. The same group announced that while the cuts would continue, they‘d be scaled back. The news led traders to believe that client demand for faster shipments has declined.
Gold prices stagnated on the heels of the US-Turkey commerce standoff. This made value of the US Dollar rise, as “safety-seeking“ capitals orbited towards Treasury bonds – thus making their yields drop. The variance sent the precious metal‘s role as an alternative to fiat investments directly into conflict with its role as a standard interest-less asset.
The next market mover in sight is the OPEC Monthly Report. It will show markets if the aforementioned producer collective finds the output increase sufficient as to lower their acceleration. Later on, the EIA Drilling Productivity report will shine light on the possibility of a flood of US shipments into global stockpiles.
Gold found itself stuck after a week that saw sentiment for it deteriorate. The USD‘s influence on the yellow metal seems to have marginally outpaced that of bond yields. Its current situation could bring about modest gains if the American paper corrects lower once risk aversion triggered by Turkey’s bank bailout wanes.