Commodity markets were mixed overnight while gold prices eased as the USD firmed amid mounting expectations of a rate hike in June by the Fed, while reports that OPEC will likely announce an extension to its production curbs when it meets later this week.
Crude Oil:
Oil prices on both sides of the Atlantic trade close to 5-week high after the American Petroleum Institute (API) reported a drop in oil, gasoline and distillate inventories.
The API said the US oil inventories fell 1.5 million barrels in the week ended May 19, compared to the expectation of 2.3 million draw. The actual figure is less than estimates, however, what boosted oil prices was the accompanying drop in the gasoline, distillates, and oil at the Cushing, Oklahoma facility. Gasoline inventories fell by a sizable 3.15 million barrels.
Oil also remains bid on expectations that OPEC would extend the output cut agreement by 9 months. Report hit the wires yesterday that the Cartel is also considering an extension of 12 months.
Currently, Crude Oil is trading at 51.52, up +0.10%, having posted a daily high at 51.67 and low at 51.40.
Gold:
Gold eased as the USD bounced off recent lows as expectations about a Fed tightening firmed. Palladium posted a solid rise supported by buoyant expectations of car sales.
Currently, Gold is trading at 1,251.86, up +0.05%, having posted a daily high at 1,253.88 and low at 1,250.34.
A break below $1245.36 (38.2% Fib R of Apr high - May low) could yield a sell-off to $1239.88 (Mar 31 low) and $1233.53 (23.6% Fib R of Apr high - May low). On the other hand, a break above $1253 (50-DMA) would open up upside towards $1264.50 (61.8% Fib R of Apr high - May low) and $1270.94 (Apr 7 high).
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