Gold prices remained under pressure on Tuesday despite the weaker U.S. Dollar as investors reacted to the optimism in Washington over tax reform and the strong possibility that Trump may appoint a hawkish Fed Chair.
Speculators Betting Trump Appoints Hawkish Fed Chair – Gold prices remained under pressure on Tuesday despite the weaker U.S. Dollar as investors reacted to the optimism in Washington over tax reform and the strong possibility that Trump may appoint a hawkish Fed Chair. December Comex Gold futures settled at $1278.30, down $2.60 or -0.20%. In other news, the U.S. Dollar Index finished lower in a lackluster trade as investors prepared for Thursday’s monetary policy decision from the European Central Bank and President Trump’s Fed Chair decision. Traders said that Trump used a lunch with Senate Republicans on Tuesday to get their views on who he should tap to be the next leader of the Federal Reserve. A source familiar with the matte said Trump polled the Republicans on whether they would prefer Stanford University economist John Taylor or current Fed Governor Jerome Powell for the job. According to a source who attended the lunch, more senators preferred Taylor or Powell. Trump also said he was considering reappointing the current head of the U.S. central bank, Janet Yellen.
Supported by Possibility of Extension of Production Cuts – U.S. West Texas Intermediate and internationally-favored Brent crude oil soared to nearly a four-week high on Tuesday after top exporter Saudi Arabia said it was determined to end a supply glut. “We are very flexible, we are keeping our options open. We are determined to do whatever it takes to bring global inventories down to the normal level which we say is the five-year average,” Saudi Arabia Energy Minister Falih told Reuters. Currently, OPEC and other major non-OPEC producers including Russia, have cut oil output by about 1.8 million barrels per day (bpd) since January. The pact runs to March 2018. The market was supported on Tuesday because traders believe that “keeping our options open” means the OPEC-led group is likely to extend or deepen the production cuts.
NATURAL GAS – Natural gas futures finished lower on Tuesday as investors continue to determine the potential impact of weather reports calling for cooler than normal temperatures that are expected to linger across the northern and eastern U.S. through the first week of November. According to natgasweather.com for the period October 25 to October 31, “A weather system and associated cool blast will sweep across the Great Lakes and east-central U.S. the next few days with highs of 50s and lows of 30s to 40s.” “It remains hot over Southern California with highs of 90s, but cooling late week.” “The Northwest, Central, and Southern U.S. will be mild to warm.” “Of primary interest, the coldest system in the current series will sweep across the central U.S. Friday through Monday with lows into the teens to 30s.” “Overall, demand will be moderate through mid-week then high.”
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