Gold prices held near their highest level in around seven weeks on Tuesday, as market players looked ahead to a key batch of U.S. economic data
GOLD – Gold prices held near their highest level in around seven weeks on Tuesday, as market players looked ahead to a key batch of U.S. economic data to gauge the strength of the world’s largest economy and how it will impact the Federal Reserve’s view on monetary policy. The U.S. is to release reports on personal income and consumer spending for June, which include the personal consumption expenditures inflation data, the Fed’s preferred metric for inflation, at 8:30AM ET (1230GMT). Prices of the yellow metal ended marginally lower on Monday, but closed out a solid July. Gold logged a gain of 2.2% last month, its best monthly performance since February, as fading expectations for a third Fed rate hike this year combined with deepening political turmoil in the White House sent the dollar to 15-month lows. Dollar weakness usually benefits gold, as it boosts the metal’s appeal as an alternative asset and makes dollar-priced commodities cheaper for holders of other currencies.
CRUDE OIL – BP (LON:BP) expects global oil prices to hold within a range of $45-$50 a barrel next year as U.S. shale production grows, the British company’s chief financial officer said on Tuesday. “Global demand is looking pretty strong, and prices will firm around the levels seen today,” he said. Brent crude oil prices were expected to remain broadly unchanged in 2018 and average at around $45-$50 a barrel as U.S. shale production is able to expand at these levels, effectively capping prices. “We can now see where the price elasticity is. As the price comes up to $52-$53 a barrel we start to see some uptick in activity, as it drops to $45, we start to see that curtailing. Earlier BP reported a drop in second quarter profits after an exploration write-off in Angola.
NATURAL GAS – U.S. natural gas futures fell sharply on Monday, hitting their lowest level in almost a month amid bearish weather forecasts that should limit demand for the fuel. Prices saw a drop of roughly 1% last week. A weather system with cooling will linger over the East with showers and thunderstorms through August 5, resulting in comfortable temperatures. A fresh weather system will arrive over the central, southern, and eastern U.S. the following week, resulting in light demand. Natural gas prices have closely tracked weather forecasts in recent weeks, as traders try to gauge the impact of shifting outlooks on summer cooling demand. Nearly 50% of all U.S. households use gas for cooling.
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