U.S. crude rallies from six-year lows, amid expected inventory draw – TIE Institute

U.S. crude futures rallied from six-year lows a session earlier amid a weaker dollar, as a continuing draw in weekly stockpiles helped temporarily halt one of the worst routs in more than a decade.

On the New York Mercantile Exchange, WTI crude for September delivery wavered between $42.80 and $43.88 a barrel before closing at 43.22, up 0.15 or 0.34% on the day. On Tuesday, U.S. crude futures dove more than 4%, suffering its worst one-day fall in more than a month, to dip to its lowest level since 2009.

On the Intercontinental Exchange (ICE), brent crude for September delivery traded in a tight range between 49.29 and 50.53 a barrel before settling at , up 0.45 or 0.91% on the session. The spread between the international and U.S. benchmarks of crude stood at 6.93, above Tuesday’s level of $6.57.

In its Weekly Petroleum Status Report on Wednesday, the U.S. Energy Information Administration (EIA) said U.S. crude inventories for the week ending August 7 fell by 1.7 million barrels, in line with forecasts for a 1.6 million decline. The moderate draw extends sharp declines from a week earlier when U.S. crude stockpiles plunged by 4.4 million barrels in the final week of July. At 453.6 million, crude inventories nationwide remain near its highest level at this time of year in at least 80 years.

WTI crude closed above $43 on Wednesday, while brent closed above $50

The announcement of the latest supply draw occurred one day after the EIA downgraded its latest projections for oil production growth for the remainder of 2015, as well as next year. For the rest of the year, the Energy Department expects crude output to rise by 650,000 barrels per day below previous forecasts of 750,000. In 2016, the EIA anticipates slower production growth of 130,000 bpd in comparison with prior estimates of 190,000. Last week, U.S. crude output declined by 70,000 bpd to 9.395 million bpd, its lowest level since early-May.

“While U.S. crude oil production this year is expected to be 100,000 barrels per day less than previously forecast, oil output is still on track to be the highest since 1972,” EIA administrator Adam Sieminski said in a statement.

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Gold falls from 3-week high as dollar rises after China policy move – TIE Institute

Gold prices fell from the previous session’s three-week peak on Tuesday, as the U.S. dollar marched higher after China devalued its currency in a surprise move.

Gold futures for December delivery on the Comex division of the New York Mercantile Exchange shed $4.40, or 0.4%, to trade at $1,099.90 a troy ounce during European morning hours.

A day earlier, gold rallied to $1,108.50, the strongest level since July 21, before ending the session at $1,104.10, up $10.00, or 0.91%.

China’s central bank devalued the yuan by nearly 2% on Tuesday, allowing the currency to fall to levels last seen in 2012, in an effort to make the country’s exports more competitive and boost the economy amid lackluster growth.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.1% at 97.32 early Tuesday, coming off from lows of 97.08 struck on Monday.

© Reuters.  Gold drops from 3-week high as China move lifts dollar

Traders continued to mull the timing of a Federal Reserve rate hike after Federal Reserve Governor Stanley Fischer said Monday that the Fed is concerned about low inflation and won’t start to raise rates before it sees inflation returning to more normal levels.

The comments sparked uncertainty surrounding a Fed rate hike in September and prompted some investors to argue that the central bank might hold off on raising rates until December.

Gold fell to a five-and-a-half year low of $1,072.30 on July 24 amid speculation the Fed will raise interest rates in September for the first time since 2006.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

Also on the Comex, silver futures for September delivery dropped 16.2 cents, or 1.06%, to trade at $15.13 a troy ounce. Prices surged to $15.37 on Monday, a level not seen since July 14, before closing at $15.29.

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Gold down slightly in early Asia as investors eye China, Fed – TIE Institute

Gold prices held slightly weaker in early Asia on Tuesday with the focus on China’s continued slump and as investors mull the prospect of a Federal Reserve rate hike later this year instead of September.

On the Comex division of the New York Mercantile Exchange, gold for December delivery eased 0.08% to $1,084.70 a troy ounce.

Silver for September delivery fell 0.21% to $14.450 a troy ounce.

Copper for September delivery dipped 0.14% to $2.342 a pound.

Overnight, gold futures inched down on Monday amid a stronger dollar, even as muted inflation data for the month of June provided support to dovish arguments for a delayed interest rate hike by the Federal Reserve.

On Monday morning, the U.S. Department of Commerce’s Bureau of Economic Analysis said consumer spending increased by 0.2% in June in line with analysts expectations, while personal income rose by 0.4% — slightly higher than consensus estimates. Analysts forecast a 0.3% rise in incomes for the month.

© Reuters.  Gold eases slightly in early Asia

More critically the Core PCE Index, which strips out food and energy prices, inched up 0.3% for the month, up from a 0.2% increase for May. On a year-over-year basis, however, the gains were muted as the index only increased by 1.3%. At its July FOMC meeting last week, the Fed reiterated that inflation remains below its targeted goal of 2% over the medium term, commonly defined as a period of the next one to two years.

The reading will likely bolster dovish viewpoints on the Fed for a delayed interest rate hike beyond this fall. Gold, which is not attached to dividends or interest rates, struggles to compete with high-yield bearing assets in periods of rising rates.

Elsewhere, Gallup said in its monthly U.S. Consumer Spending Measure that self-reports from American consumers on a monthly basis averaged approximately $91 for July, up one dollar from its level in June. While the figure is slightly lower than its level from July, 2014, it is also higher than any other reading for the month since 2009. Over the last several months, consumer spending has remained relatively flat, according to Gallup’s measure.

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Copper prices up in early Asia ahead of China PMI, gold, silver down – TIE Institute

Gold and silver fell in early Asia on Monday, but copper showed a bounce ahead of a China manufacturing survey and other releases.

Ahead are manufacturing PMIs from Japan, seen at 51.4 in July, and China – with the Caixin/Markit China final for July seen at 48.3 in the flash estimate.

Gold for August delivery on the Comex division of the New York Mercantile Exchange fell 0.10% to $1,093.80 a troy ounce.

Also on the Comex, silver futures for September delivery eased 0.20% to $14.730 a troy ounce by close of trade.

Elsewhere in metals trading, copper for September delivery gained 0.19% to $2.357 a pound.

Market players are watching the PMI amid concern that further sharp drops in China’s stock market could spread to other parts of the economy, triggering fears that the Asian nation’s demand for the industrial metal will decline.

China is the world’s largest copper consumer, accounting for almost 40% of world consumption last year.

Last week, gold futures inched up modestly on Friday, but still posted the worst monthly performance in more than two years in July, as ongoing expectations that the Federal Reserve will hike interest rates at its September policy meeting weighed.

© Reuters.  Copper prices gain ahead of China PMI

In July, gold prices lost $79.50, or 6.72%, the biggest weekly decline since June 2013. Futures fell to a five-and-a-half year low of $1,072.30 on July 24.

Gold has been under heavy selling pressure in recent weeks amid speculation the Fed will raise interest rates for the first time in nine years in the coming months.

The central bank sounded more upbeat about the economy following its policy meeting last week, leaving the door open for an interest-rate hike as soon as September.

In its rate statement published Wednesday, the Fed described the economy as expanding “moderately,” while upgrading its view of the labor and housing markets.

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NYMEX crude rebounds in Asia, shrugs off weak China flash PMI – TIE Institute

Crude oil prices gained in Asia, shrugging off poor flash manufacturing estimates on China and generally bearish news on the supply outlook as investors bet on a rebound after a series of sharp falls and looked ahead to rig count data in the U.S.

The Markit/Caixin survey of China manufacturing showed a decline to 48.2 a 15-month-low, and well below the expected 49.7 and off from June’s final of 49.4. Final data is due in August.

The flash reading suggests manufacturing conditions may be deteriorating and will raise questions about the resilience of the economic recovery despite Beijing’s confidence for a better second half.

Otherwise, China markets were relatively calm following a report in the UK press that $800 billion has fled the country as a systemic crisis brews.

© Reuters.  NYMEX crude rebounds in Asia

London’s Daily Telegraph cited research reports showing a “frighteningly large” $800 billion has flowed out of China over the past year, as the forces which saw Chinese reserves top out at nearly $4 trillion unwind at a rapid and dangerous pace.

On the New York Mercantile Exchange, WTI crude for September delivery rose 0.64% at $48.76 a barrel.

Overnight, WTI crude fell on Thursday settling below $50 a barrel, as concerns related to the Iranian Nuclear Pact and a glut of oversupply in energy markets worldwide remained in focus.

On the Intercontinental Exchange (ICE), Brent crude for September delivery wavered between $55.12 and $56.52 before closing at $55.24 a barrel, down 0.89 or 1.57% on Thursday.

Traders continued to digest a surprising inventory build last week. In its weekly Petroleum Status Report on Wednesday, the U.S. Energy Information Administration (EIA) saidU.S. crude inventories rose by 2.5 million barrels for the week ending on July 17.

Analysts expected a draw of 2.2 million barrels on the week. Crude inventories nationwide are now at 463.9 million barrels the highest level at this time of year in at least 80 years. At the Cushing Oil Hub in Oklahoma, the main delivery point for NYMEX oil, its crude inventory increased by 813,000 last week, above expectations for a 300,000 build.

A rise in U.S. stockpiles is viewed as bearish for WTI crude prices as supply continues to outstrip demand. While U.S. crude output fell slightly by 4,000 barrels per day to 9.558 million last week, production levels still remain near 40-year highs. Global supply has hovered near record-levels since Opec decided to keep it production ceiling above 30 million barrels per day last November.

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Gold closes lower for 10th straight session, falling to fresh 5-yr lows – TIE Institute

Gold futures plunged further on Wednesday to fresh five-year lows amid a broadly higher dollar, as investors continued to adopt a bearish sentiment to the precious metal.

On the Comex division of the New York Mercantile Exchange, gold for August delivery plummeted to 1,085.90 a troy ounce, its lowest level since February, 2010, before rallying slightly in U.S. afternoon trading. The precious metal settled at $1,092.80, down 10.70 or 0.97% to close lower for the 10th consecutive session. Wednesday’s sell-off extended previous losses from the start of the week when gold futures crashed by more than 2.2% to slip below $1,100 an ounce.

Gold dipped below $1,190 to fall to a new 5-yr low, before slightly rallying

Since peaking above $1,200 an ounce in late-June, gold futures have declined by nearly 10%.

The National Association of Realtors said in a monthly report on Wednesday that existing home sales in June increased 3.2% on a month-to-month basis to an annual rate of 5.49 million units, its highest level since February, 2007. Analysts expected existing home sales to rise to 5.40 million on the month.

Following last month’s surge, existing home sales are now up nearly 10% from last year at this time.

The strong data helped boost the dollar, which posted positive gains on Wednesday for the fifth time in six sessions. The U.S. Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, rose more than 0.4% to an intraday high of 97.94. On Monday, the dollar index surged to a three-month high at 98.31.

Dollar-denominated commodities such as gold become more expensive for foreign purchasers when the dollar appreciates.

Elsewhere, the Shanghai Composite inched up 9.03 points or 0.22% to 4,026.04. During early-morning trading on Monday, gold plummeted more than 5% in mere minutes when it fell below $1,120, triggering a fresh batch of sell orders. The People’s Bank of China has enacted a wave of stimulus measures in recent weeks in an effort to reverse a massive sell-off that has resulted in approximately $3 trillion in losses among Chinese equities. While China said last week that its holdings in gold reserves has increased roughly 60% over the last six years, the figure pales in comparison to its substantial growth in foreign exchange reserves.

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Gold prices drop in Asia as market takes cue from overnight losses – TIE Institute

Gold prices fell further in Asia on Wednesday as investors took stock of overnight drops and forecast calling for the precious metal to ddip below $1,000.

On the Comex division of the New York Mercantile Exchange, gold for August delivery fell 0.99% to $1.092.60 a troy ounce.

Silver for September delivery eased 0.59% to $14.698 a troy ounce. Copper for September delivery declined 0.84% to $2.455 a pound.

Overnight, one day after crashing more than 2.2% to fresh five-year lows, gold futuresinched down on Tuesday for its ninth straight loss in spite of a retreating dollar.

Gold falls on bearish views

On Monday, gold plunged more than 5% in a matter of minutes in early morning Asian trade when it fell below $1,120, triggering a fresh batch of sell orders. Over the weekend, the People’s Bank of China tightened regulations on internet financing in further efforts to bolster its crashing equities markets. In recent weeks, Chinese investors have lost approximately $3 trillion in the stock market amid the slowest growth in the world’s second-largest economy in over a decade.

The stimulus measures came hours after China released data on its gold holdings for the first time since 2009. While Chinese gold holdings surged about 60% to 1,658 metric tons over the six-year span, the figure still pales in comparison to the nation’s increasing stockpile in foreign exchange reserves. Chinese gold reserves represent only 1.5% of its forex reserves, dampening optimism that the world’s second-largest economy can provide a further boost to the global gold market.

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U.S. gas futures drop 2% in early trade as forecasts turn milder – TIE Institute

U.S. natural gas prices tumbled on Monday, as forecasts for the next two weeks turned milder, dampening near-term demand expectations for the cooling fuel.

Natural gas for delivery in August on the New York Mercantile Exchange slumped 7.2 cents, or 2.49%, to trade at $2.798 per million British thermal units during U.S. morning hours.

Futures were likely to find support at $2.776, the low from July 17, and resistance at $2.944, the high from July 17.

Natural gas came under pressure as milder temperatures were expected to spread across most parts of the U.S. Northeast in the coming days, after a heat wave swept through much of the country last week.

Demand for natural gas tends to fluctuate in the summer based on hot weather and air conditioning use. Natural gas accounts for about a quarter of U.S. electricity generation.

The August natural gas contract rose 5.4 cents, or 3.61%, last week, as hotter-than-normal summer temperatures increased the need for gas-fired electricity to cool homes, boosting demand for natural gas.

Natural gas accounts for about a quarter of U.S. electricity generation.

© Reuters.  US natural gas futures slip early as forecasts turn milder

According to the U.S. Energy Information Administration, natural gas storage in the U.S. rose by 99 billion cubic feet last week, compared to expectations for an increase of 95 billion and following a build of 91 billion cubic feet in the preceding week.

Supplies rose by 105 billion cubic feet in the same week last year, while the five-year average change is an increase of 71 billion cubic feet.

Total U.S. natural gas storage stood at 2.767 trillion cubic feet, 30.9% higher than during the same week a year earlier and 2.7% above the five-year average for this time of year.

Last spring, supplies were 55% below the five-year average, indicating producers have made up for all of last winter’s unusually strong demand.

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Gold prices plunge in Asia as political risk views ease on Greece, Iran – TIE Institute

Gold prices dipped sharply in Asia on Monday as investors noted Greece is set to re-open banks later in the day under restrictions, a move that has further eased political risk views along with a pact reached by six major powers last week to ease economic sanctions on Iran.

Gold futures for August delivery plunged 2.12% on the Comex division of the New York Mercantile Exchange to $1,107.90 a troy ounce. Also on the Comex, silver futures for September delivery dropped 1.39% to $14.268 a troy ounce.

Elsewhere in metals trading, copper for September delivery shed 0.71% to $2.476 a pound.

Greek banks are ready to open their branches across the country on Monday after a three-week shutdown, officials said at the weekend, while German Chancellor Angela Merkel called for swift aid talks so Athens could also lift withdrawal limits.

gold TIE Institute

The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.

Greek Prime Minister Alexis Tsipras is trying to turn a corner after he reluctantly agreed to negotiate a third bailout, allowing the European Central Bank to top up bank credit lines but prompting a rebellion in his leftist Syriza party.

“Capital controls and restrictions on withdrawals will remain in place but we are entering a new stage which we all hope will be one of normality,” the head of Greece’s banking association Louka Katseli told Skai television.

Markets in Japan are shut on Monday.

Last week, gold plunged to a five-year low on Friday, as upbeat U.S. inflation and housing data boosted expectations for an interest rate hike later this year.

Data on Friday showed that U.S. consumer prices rose 0.3% in June, the fifth consecutive monthly increase, while core prices, which exclude food and energy, increased 0.2% last month, adding to signs of firming inflation.

A separate report showed that U.S. housing starts surged 9.8% to 1.174 million units in June. Analysts had expected housing starts to increase by 6.2% last month.

Meanwhile, U.S. building permits jumped 7.4% to 1.343 million units in June, the most since July 2007, pointing to a rapidly strengthening housing market.

Federal Reserve Chair Janet Yellen said earlier in the week that the central bank was on track to raise interest rates by the end of the year if the economy continues to grow as expected.

Expectations of higher borrowing rates going forward is considered bearish for gold, as the precious metal struggles to compete with yield-bearing assets when rates are on the rise.

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Gold futures hold steady at 8-month lows – TIE Institute

Gold prices held steady at eight-month lows in European morning hours on Friday, as the stronger dollar and increased risk-appetite following positive news from Greece weighed heavily on the precious metal.

On the Comex division of the New York Mercantile Exchange, gold futures for August delivery were steady at $1,144.00.

The August contract ended Thursday’s session 0.31% lower at $1,143.90 an ounce.

Futures were likely to find support at $1,140.80, Wednesday’s low and an eight-month low and resistance at $1,154.20, Wednesday’s high.

The dollar strengthened after Federal Reserve Chair Janet Yellen’s two-day testimony before U.S. Congress left investors believing that interest rates will be raised later this year.

However, speaking to the Senate Banking Committee on Thursday, a day after appearing before the House Financial Services Committee, Yellen again avoided specifying exactly when the Fed is likely to start lifting its benchmark rate from near zero.

© Reuters.  Gold hovers at 8-month lows as risk-appetite strengthens

The greenback was also boosted after the U.S. Department of Labor reported on Thursday that the number of individuals filing for initial jobless benefits in the week ending July 11 fell by 15,000 to 281,000 from the previous week’s total of 296,000.

Analysts had expected initial jobless claims to fall by 10,000 to 285,000 last week.

The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was at 97.65 in early European trading, close to Thursday’s one-and-a-half month peak of 97.92.

Meanwhile, market sentiment improved after euro zone ministers agreed on Thursday to give Greece a €7 billion bridging loan from a European Union-wide fund to keep its finances afloat until a bailout is approved.

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