Gold prices edged lower to start the week on Monday, as investors took a relatively calm view of the partial shutdown of the U.S. federal government
Gold Edges Lower to Start the Week; U.S. Government Shutdown in Focus – Gold prices edged lower to start the week on Monday, as investors took a relatively calm view of the partial shutdown of the U.S. federal government. The U.S. government shutdown entered a third day after the Senate failed to reach a deal Sunday night to fund government operations. Lawmakers have been trying to reach a deal on immigration, which is viewed as crucial to breaking the deadlock. This is the first U.S. government shutdown since 2013. That year, the government was shut down for 16 days. Looking to the week ahead, global financial markets will focus on the European Central Bank’s meeting for further details on when the central bank plans to end its massive economic stimulus program. Staying on the central bank front, traders will pay close attention to a monetary policy decision from the Bank of Japan after a small tweak in its bond purchases earlier this month triggered talk that it would cut back on QE. Mounting chatter that the world’s leading central banks will start tightening monetary policy has sparked a global bond market selloff this month, with yields in the U.S., Europe and Asia all spiking higher. Meanwhile, investors will keep an eye on a preliminary reading of fourth-quarter U.S. growth to gauge if the world’s largest economy is strong enough to withstand multiple rate hikes in 2018.
Oil Starts the Week Higher After Bullish Saudi Comments on Supply Deal – Crude prices started the week in positive territory on Monday, pushed higher by comments from Saudi Arabia that cooperation between oil producers who are currently withholding supplies in an effort to prop up the market would continue beyond 2018. OPEC and non-OPEC oil producers have a consensus that they should continue cooperating on production after the end of 2018, when their current agreement on production cuts expires, Saudi Arabian energy minister Khalid al-Falih said on Sunday. Falih added that this might mean a new form of deal rather than continuing the same supply cuts that have boosted prices in recent months. He spoke at a news conference after a meeting of the joint ministerial committee which oversees implementation of the cuts. Oil prices have added around 10% since early December, benefiting from production cut efforts led by the Organization of the Petroleum Exporting Countries and Russia. The producers agreed in December to extend current oil output cuts until the end of 2018.
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