Gold prices extended losses from the prior session on Wednesday, as hawkish comments from Federal Reserve Chair Janet Yellen
Crude Oil Prices Edge Higher on Bets for Bullish U.S. Supply Data – Crude oil prices edged higher on Wednesday, staying within sight of their strongest level in months amid speculation weekly supply data due later in the session will show U.S. crude stockpiles declined for the first time in four weeks. Oil futures finished lower Tuesday for the first time in three sessions, but losses were capped amid growing optimism that the crude market was well on its way towards rebalancing. Prices have gained roughly 20% from their June lows, meeting the definition of a bull market, as data showed strong compliance from major producers with their supply cut agreement and as talk grows of a likely extension of the deal. In May, OPEC and non-OPEC members led by Russia agreed to extend production cuts of 1.8 million barrels per day for a period of nine months until March 2018 in a bid to reduce global oil inventories and support oil prices.
Gold Prices Slide Towards 5-Week Lows on Yellen’s Hawkish Tone – Gold prices extended losses from the prior session on Wednesday, as hawkish comments from Federal Reserve Chair Janet Yellen boosted expectations of a December rate hike. The U.S. central bank last week announced it would begin trimming down its $4.5 trillion in assets and signaled it will likely raise rates again before the end of this year. Interest rate futures are now pricing in about an 80% chance of a December Fed rate hike according to Investing.com’s Fed Rate Monitor Tool, up from under 40% just a few weeks ago. The U.S. dollar and bond yields jumped on her remarks, dampening the appeal of bullion. The dollar index, which tracks the greenback’s strength against a basket of six major currencies, rose to 93.13, its highest level in almost a month. Looking ahead, investors awaited headlines on U.S. tax reform, which is expected to be unveiled on Wednesday U.S. time. The plan has been developed over several months by six White House and congressional Republicans working behind closed doors and with no input from Democrats. Republicans, who control the White House and both chambers of Congress have been unable to deliver a significant legislative win on any topic since Trump took office in January.
Successful Defense of $2.954 Could Lead to Short-Covering Rally into $3.055 – Natural gas prices rebounded after early session weakness as buyers stepped in to defend a pair of bottoms on the daily chart at $2.957 and $2.954. The move helped the market produce a potentially bullish technical chart pattern that could lead to a follow-through rally over the next 2 to 3 days. There were no major changes in the fundamentals and the weather forecast remained the same from the previous day. The warm weather lingering over the Midwest and parts of the east are still expected to end by mid-week, which should be today. This is expected to lead to cooling late in the week. In other news, according to the U.S. Energy Information Administration, total natural gas in storage currently stands at 3.408 trillion cubic feet. This is around 3.8% lower than levels at this time a year ago and in line with the five-year average for this time of year.
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