Gold Traders To Ignore Federal Reserve Meeting, Gold closed a volatile week at 1098.10 as it spent the week wrestling with the all-important $1100 price but seemed unable to hold above as the bears continue to dominate the marketplace. As expected this morning in the Asian session gold is trading at 1101.00 adding $4.70 as the US dollar eased. Gold prices will most likely reverse gains as the European markets begin to open.
This week traders will be carefully monitoring the Federal Reserve decision and statement due on Wednesday. The bank is not expected to take any action and the markets generally expect that the statement will remain pretty close to its previous wording and give no indications to a March increase of pass. Also this week traders will hear from Governor Wheeler from New Zealand and no one is sure what to expect there. And the other biggie this week will be the Bank of Japan on Friday. None of these decisions are expected to have any major change in precious metals.
Gold prices have had a difficult time trading and closing above 1100.0 per ounce in 2016 with two of the reasons for the failure are that gold premiums in China have only risen slightly in 2016 while sellers in India has offered discounts amid poor demand.
Crude Oil Prices Jump Over 20% But It Is A Rally?
1. Equities soared on Friday as oil prices rallied. Crude oil gained over 20% on Thursday and Friday and for no real fundamental reasons. It seems that speculators are preparing for a pump and dump. Worrisome news from Libya stoked the markets giving speculators all they needed to push up prices which had been trading near 12 year lows.
A report from Platt’s seemed to give traders a second reason to rally. The report showed that production from OPEC fell by 130,000 barrels a day in December from a month earlier, to 32.28 million barrels a day, according to a Platt’s survey of OPEC oil industry officials and analysts released Friday. Platt’s attributed the decline to output cuts in Iraq, Nigeria and Saudi Arabia. The Saudis lowered output by 50,000 barrels a day to 10.1 million barrels a day, but haven't given any indication that they are ready to abandon the "market-share strategy that it persuaded OPEC to adopt in November 2014," Platt’s said..
2. Greece's biggest oil refiner Hellenic Petroleum agreed on Friday to buy crude oil from the National Iranian Oil Company (NIOC), the first European refiner to restart trade relations with Iran after the lifting of international sanctions.
3. The third spike in the rally came from deteriorating weather conditions in the US where a winter snowstorm covering the Southeast moving north dropping record amounts of snow and bring cold temperatures in its track, increasing demands for heating oil. Heating oil gained 0.82% this morning trading at 1.0158 while natural gas rallied to 2.158 up by 0.77% as Stormzilla abated.
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