Oil markets were split on Tuesday, with U.S. crude still carrying momentum from Friday’s gains due to a holiday on Monday while international Brent prices eased
Oil markets mixed as U.S crude, Brent move in opposite directions – Oil markets were split on Tuesday, with U.S. crude still carrying momentum from Friday’s gains due to a holiday on Monday while international Brent prices eased. A holiday in the United States on Monday meant that Friday’s gains were being pushed into Tuesday for WTI, traders said. Ongoing supply reductions from Canada to the United States due to pipeline reductions were supporting WTI, traders said. Outside North America, Brent crude eased on the back of a dip in Asian stocks and a stronger dollar, which potentially curbs demand as it makes fuel more expensive for countries using other currencies domestically. Overall, oil markets remain well supported due to supply restraint by the Organization of the Petroleum Exporting Countries (OPEC), which started last year in order to draw down excess global inventories.
Gold Prices Continue to Drop on Stronger Dollar – Gold prices continued to drop on Tuesday, weighed by the U.S. dollar’s ongoing strength and diminished demand for safe-haven assets. The greenback remained supported despite sustained concerns over the deficit in the U.S., which is projected to climb near $1 trillion in 2019 following the recent announcement of infrastructure spending and large corporate tax cuts. The dollar had been pressured lower recently by expectations for a faster pace of monetary tightening outside the U.S., which would lessen the divergence between the Federal Reserve and other central banks. Market participants were looking ahead to the minutes of the Federal Reserve’s latest policy meeting, due on Wednesday, for potential indications on the pace of future rate hikes. Gold is sensitive to moves in both U.S. rates and the dollar. A stronger dollar makes gold more expensive for holders of foreign currency, while a rise in U.S. rates lifts the opportunity cost of holding non-yielding assets such as bullion.
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