Gold on MCX settled down -0.65% at 28347 prices continued to drift lower with fresh 4-month low amid expectations the Federal Reserve
Brent crude oil jumps to mid-2015 high after North Sea pipeline outage – Brent oil prices jumped by 1 percent on Tuesday to their highest since mid-2015, after the shutdown of the Forties North Sea pipeline knocked out significant supply from a market already tightening due to OPEC-led production cuts. “Brent crude raced higher … as news broke that the North Sea’s Forties Pipeline system would have to be shut down for a ‘number of weeks’ after a hairline crack was found in it,” said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. “The pipeline … is a significant component underpinning the Brent benchmark.” Britain’s Forties oil pipeline, the country’s largest at a capacity of 450,000 barrels per day (bpd), shut down on Monday after cracks were revealed. “The market reaction shows that in a tight market, any supply issue will quickly be reflected in higher prices,” said ANZ bank. Analysts said there was also oil price support from the consumer side. “Demand growth across the commodity complex is extremely robust. And inventories across the complex have been declining sharply,” U.S. bank Goldman Sachs (NYSE:GS) said in a note to clients.
Gold prices remained under pressure underpinned by expectations of higher U.S. interest rates – Gold on MCX settled down -0.65% at 28347 prices continued to drift lower with fresh 4-month low amid expectations the Federal Reserve will issue hawkish commentary on interest rates. Friday data showed the US unemployment rate steadied at 4.1% as expected in November, matching the October reading and holding at the lowest rate since December 2000. While US average hourly earnings rose 0.2% in November, missing expectations of a 0.3% rise, while improving from October’s 0.1% dip, revised from no-change. The US economy added 228 thousand new jobs in November, beating expectations of 198 thousand, and compared to October’s 244K, revised from 261K. Meanwhile Goldman Sachs has recently projected four Fed rate hikes in 2018, while raising US growth forecasts to 2.5% from 2.4%, and cutting the unemployment rate projections to 3.7%. Also Fed policymakers will unveil their forecasts for three-year inflation, unemployment, growth, and interest rates later this week, as market expect them to go ahead of hike rates by 25 basis points in this week’s meeting. In the week ahead investors will be focusing on Wednesday Fed meeting where it is expected to hike rates by a quarter point. The European Central Bank, Bank of England and the Swiss National Bank are also due to hold monetary policy meetings, although no changes are expected.
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