GOLD – Gold prices rose on Thursday in response to the lower U.S. Dollar. Rising security concerns created by tensions on the Korean peninsula also supported the bullish sentiment. The dollar fell as U.S. Treasury yields declined in response to weak U.S. economic data which greatly reduced the chances for a Fed rate hike later this year. Geopolitical tensions remained at the forefront as investors continued to monitor the situation between North Korea and South Korea. Earlier in the week, North Korea fired a missile over Japan. That was followed two days later by South Korea’s air force conducting an exercise with two U.S. nuclear-capable bombers above the Korean peninsula on Thursday. Gold was under pressure early Thursday as traders continued to respond to Wednesday’s better-than-expected U.S. Preliminary GDP report. However, it began to turn up after disappointing U.S. economic data raised doubts over the Federal Reserve’s ability to raise interest rates later this year.
CRUDE OIL – U.S. West Texas Intermediate crude oil prices closed 2.76% higher and international-benchmark Brent crude oil settled up 4.20% on Thursday, rebounding from losses made earlier in the session. However, it wasn’t enough to stop U.S. crude oil from its steepest monthly loss in more than a year on demand concerns after floods knocked out a quarter of U.S. refining capacity. In other news, the U.S. Energy Department said on Thursday it would release 500,000 barrels of crude oil from the Strategic Petroleum Reserve. The Colonial Pipeline Co, which operates the biggest U.S. fuel transport system, said it would shut its main lines to the Northeast amid outages at pumping points and lack of supply from refiners.
NATURAL GAS – Natural gas futures posted a bullish outside move on Thursday, driven by technical factors and production concerns over the damage caused by Hurricane Harvey and the flooding along the Gulf Coast of Texas. According to the U.S. Energy Information Administration, domestic supplies of natural gas rose by 30 billion cubic feet for the week-ended August 25. Traders were looking for a build of about 29 billion cubic feet. The rise was led by gains in Texas, the largest gas-producing state, Oklahoma, Louisiana and Ohio. Production, however, is likely to fall sharply in the coming weeks, as about one-fifth of offshore production has been shut down due to Tropical Storm Harvey. Texas’s Eagle Ford shale region, which has been substantial growth in recent years thanks to the shale boom, has also seen production shut down due to the storm, and it may be some time before activity resumes.
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