Gold rises as dollar weakens on report Trump’s election campaign subpoenaed

Gold prices rose on Friday as the dollar weakened after a report that investigators looking into possible Russian interference in the 2016 U.S. presidential election had subpoenaed President Donald Trump’s election campaign for documents.

Special Counsel Robert Mueller’s team issued the subpoena last month for documents containing specified Russian keywords from more than a dozen officials, the Wall Street Journal reported.

Spot Push Me had climbed by 0.3 percent to $1,282.72 per ounce by 0429 GMT. It is up about 0.5 percent for the week, in what could be its second straight weekly gain.

U.S. gold futures(https://liveindex.org/gold/) for December delivery rose 0.4 percent to $1,282.70.

“The fall in the dollar and strengthening in Asian currencies have made gold attractive for Asian investors,” said John Sharma, an economist with National Australia Bank.

However, uncertainties surrounding a U.S. tax reform bill and a likely interest rate hike by the Federal Reserve next month are sending mixed signals to the market, keeping gold rangebound, he said.

“Prices should likely continue to hover between $1,260 and $1,290 in the short-term,” he added.

Republican U.S. lawmakers on Thursday took an important step toward the biggest tax code overhaul since the 1980s as the House of Representatives approved a broad package of tax cuts sought by Trump.

“Gold prices will continue a sideways drift in the coming months as rising nominal interest rates in the U.S. keep a lid on investment demand,” BMI Research said in a note.

“Prices will grind moderately higher in the longer term as developed market inflation rebounds.” San Francisco Fed President John Williams reiterated his view on Thursday that the U.S. economy is growing strongly enough for the Fed to continue raising rates gradually over the next couple of years to around 2.5 percent.

Meanwhile, Cleveland Fed President Loretta Mester said on Thursday she feels inflation is poised to pick up, clearing the way for the Fed to continue its gradual process of raising interest rates.

Spot gold is biased to rise above a neutral range of $1,270-$1,286 per ounce, and gain further towards $1,298, according to Reuters technicals analyst Wang Tao.

The dollar index against a basket of six major currencies was down 0.3 percent.

In other precious metals, silver was up 0.1 percent at $17.098 an ounce, platinum rose 0.4 percent to $934.50 and palladium gained 0.3 percent to $990.25.

For the week, silver has risen 1.1 percent, in what could be its best week in five. Platinum is up about 1.1 pct, heading for a third straight weekly rise, while palladium is down 0.3 percent.

Oil prices set for first weekly fall in six on oversupply worries

Oil prices were mixed on Friday after recent declines, but were were on track for the first weekly fall in six weeks, under pressure from surging U.S. supplies and doubts over Russian support for continuing a cut in crude output.

Brent crude futures(https://liveindex.org/crude/), the international benchmark for oil prices,were at $61.23 per barrel at 0616 GMT, down 13 cents from their last close.

U.S. West Texas Intermediate (WTI) crude futures were at $55.32 a barrel, up 18 cents. Traders said strong U.S. crude exports were lifting WTI.
Still, crude was on track to fall around 2-4 percent for the week on worries about growth in U.S. production and inventories, after both benchmarks touched 2015 highs last week.

“Russian support for a formalized extension of production cuts at the Nov.30 OPEC meeting appears questionable, even if only to defer the decision to 1Q18,” U.S. investment bank Jefferies said.

Crude markets(Click Me) have received general support in the past months by the Organization of the Petroleum Exporting Countries (OPEC), which together with some non-OPEC producers including Russia has been withholding production since January in order to tighten the market and prop up prices.

This has lead to an almost 40 percent rise in Brent prices since June.

“The production cut agreement between some OPEC and non-OPEC oil producers led to a drop in inventories and to a recovery of oil prices,” Dutch bank ABN Amro said.

“In the course of 2018 we expect a continuation of the oil price rally towards $75 per barrel,” ABN said.

The deal to restrain output is due to expire in March 2018, but OPEC willmeet on Nov. 30 to discuss policy.

Analysts said more production restraint is needed to reduce the supply overhang.

“The problem is still that oil stockpiles are above the five-year average,” said William O’Loughlin, investment analyst at Australia’s Rivkin Securities.

Khalid al-Falih, the energy minister of Saudi Arabia, which is OPEC’s de-facto leader, said on Thursday that “we need to recognize that by the end of March we’re not going to be at the level we want to be which is the five-year average, that means an extension of some sort.”

OPEC’s main obstacle in tightening the market is the United States, where crude oil production hit a record of 9.65 million barrels per day (bpd) this month, meaning output has risen by almost 15 percent since their most recent low in mid-2016.

Traders said they were looking for a weekly U.S. drilling report published later on Friday by oil services firm Baker Hughes for market guidance.

Dollar steadies as risk aversion ebbs, yields rise

The dollar steadied on Friday after coming off the week’s lows against its peers as earlier risk aversion in global financial markets receded, pushing up U.S. yields.

The Dollar Index against a basket of six major currencies was little changed at 93.822.

The index had edged up overnight to pull away from a four-week trough of 93.402 set on Wednesday. Wall Street shares rallied overnight after sagging through much of the week, causing a 4 basis points jump in the long-term Treasury yield to shore up the dollar.

 The greenback was a shade lower at 112.935 yen.

The https://liveindex.org/dollar-index/ had bounced overnight from a one-month low of 112.470 yen midweek as an ebb in investor confidence halted a surge in global equities and lifted the Japanese currency.

“While the comeback in equities has stopped the recent decline in Treasury yields, focus remains on U.S. tax reforms,” said Junichi Ishikawa, senior forex strategist at IG Securities in Tokyo.

“Yields cannot rise much further when it is unclear whether tax reforms can go through this year. Dollar/yen can test the 114.00 handle but lacks momentum for a sustained surge under such conditions.”

The U.S. House of Representatives on Thursday approved a broad package of tax cuts sought by President Donald Trump. The debate now moves to the Senate, where Republican majority is smaller and no decisive action is expected until after next week’s Thanksgiving holiday.

The common currency was on track to gain 1 percent on the week. It had rallied to a one-month high of $1.1862 on Wednesday after data showed strong growth for Germany’s economy in the third quarter.

Sterling extended gains after drawing support overnight when an initiative by European Central Bank President Donald Tusk on Brexit negotiations was taken as mildly positive.

The pound rose 0.1 percent to $1.3204 to put further distance between the week’s low of $1.3063 marked on Monday when perceived troubles for British Prime Minister Theresa May hurt the currency.

The Australian dollar was little changed at $0.7585. It was poised to end 1 percent lower on the week, during which it sank to a near five-month low of $0.7567 on lower commodity prices and weak domestic data.

S&P 500 hit fresh intraday records as stock market extends climb to fresh peaks

U.S. stocks on Tuesday opened slightly higher as equity benchmarks extended a multisession rise powered by hope of a more favorable tax regime and an upbeat outlook for coming corporate results. The Dow Jones Industrial Average DJIA, +0.09% opened up 32 points, or 0.1%, at 22,591, the S&P 500 index SPX, +0.12% climbed 2 points, or 0.1%, at 2,531, while the Nasdaq Composite Index COMP, +0.04% gained 9 points, or 0.1%, at 6,525. The S&P 500 and the Dow hit opening intraday records early in the session, with the Nasdaq not far behind. All three major stock gauges finished at all-time highs on Monday, as well as the small-cap oriented Russell 2000 Index RUT, -0.28% shaking off the grimness of a Sunday massacre in Las Vegas that left 59 people dead and scores more injured. In corporate news, shares of gun makers were still in focus, after Sunday’s mass shooting, with Smith & Wesson-parent American Outdoor Brands Corp. AOBC, -0.06% trading higher after strong gains on Monday. Meanwhile, shares of home builder Lennar Corp. LEN, +1.92% were climbing after better-than-expected corporate results

Gold prices log third straight decline

Gold prices logged a third decline in a row on Tuesday, pressured by record highs in U.S. stock benchmarks, as recent strength in the dollar and Treasury yields lured some investors away from the precious metal.

December gold on Comex GCZ7, +0.10%  fell $1.20 , or less than 0.1%, to settle at $1,274.60 an ounce, settling at the lowest level since Aug. 8 for a second straight session.

U.S. government bond yields got a boost off increased expectations that Federal Reserve Chairwoman Janet Yellen and fellow policy makers are inclined to lift interest rates once more before the end of 2017. The 2-year Treasury yield note TMUBMUSD02Y, +0.28% the most sensitive to shifting interest-rate expectations, hit a 52-week high on Monday, but it has pulled back to trade more recently at 1.463% Tuesday.

Higher bond yields, which move inversely to prices, can make owning gold, which doesn’t offer interest, less appealing. The exchange-traded SPDR Gold Shares ETF GLD, +0.28% meanwhile, traded up 0.1%.

Mihir Kapadia, CEO of Sun Global Investments, said gold is being pressured by strength in the greenback, and a downturn in physical buying. The dollar, as measured by the U.S. ICE Dollar Index DXY, -0.03% which gauges the currency against a half-dozen rivals, was almost flat on the day but gained about 1% last week. Dollar strength tends to make buying bullion, which is priced in dollars, less attractive to investors using weaker currencies.

“With the chatter over [President Donald] Trump’s choice for Fed chair starting to dominate, gold really is all about the greenback right now,” said Adrian Ash, head of research at BullionVault.

From the 12-month peak on Sept. 8, gold has lost roughly 6.5%—and “it’s dropped at its fastest pace versus the dollar since December 2016’s sharp correction,” he said.

“The metal might rally if the dollar now drops—say, on Trump picking ‘low-rate Yellen’ over ‘rate-rise [Kevin] Warsh’ within the 2-3 week deadline the president just set himself,” said Ash. Gold’s “strongly negative correlation with the dollar” might also “crack—perhaps if the S&P SPX, +0.12% jumps on the prospect of lower for longer from the Fed.”

Meanwhile, U.S. stocks, notably the Dow Jones Industrial Average DJIA, +0.09%  and the S&P 500 index, were setting more records. Much of the enthusiasm around equities has been driven by optimism that Trump’s administration will implement tax policies, including tax cuts and repatriation of money held abroad, that could boost appetite for risky assets and away from gold.

In other metals trading, December silver SIZ7, +0.10%  lost less than half a cent to $16.650 an ounce, while the silver ETF, iShares Silver Trust SLV, -0.13% rose 0.3%.

December copper HGZ7, +0.78%  added under a penny to $2.964 a pound. January platinum PLF8, +0.26%  fell 0.1% to $915.50 an ounce and December palladium PAZ7, +0.38%  rose 0.6% to $916.90 an ounce.

Dow maintains record rally as Tillerson dismisses ‘petty nonsense’ over ‘moron’ remark and recommits to Trump

The Dow Jones Industrial Average saw its gains firm on Wednesday after Secretary of State Rex Tillerson addressed reports that he was on the verge of leaving President Donald Trump’s administration and referred to POTUS as a “moron.” In a news conference at around 11 a.m. Eastern on Wednesday, Tillerson, a former head of Exxon Mobil Corp. XOM, +0.04% rebutted a report from NBC News, citing multiple senior administration officials, that claimed that he thought ill of the president and considered resigning. Tillerson reaffirmed his commitment to Trump in his conference, however, he didn’t appear to outright deny the claim that he called Trump a name, saying that it was “petty nonsense” to entertain those accusations. Most recently, the Dow DJIA, +0.09% was up 0.1% at 22,662, while the S&P 500 index SPX, +0.12% was up about a point, or less than 0.1%, at 2,535, hitting an intraday record earlier. The Nasdaq Composite Index COMP, +0.04% was trading 0.1% lower at 6,522. All three benchmarks closed at all-time highs on Tuesday and have been bolstered by hope that a pro-market tax proposal will be passed in Congress.

Dow posts record close as Fed meeting starts, Trump talks to the UN

Dow posts record high as the Fed kicks off two-day monetary policy meeting 12 Hours Ago | 01:05

U.S. equities rose on Tuesday as the Federal Reserve kicked off a two-day monetary policy meeting.

The Dow Jones industrial average posted its 41st record close of the year, rising 39.45 points to 22,370.80. Verizon and Goldman Sachs contributed the most to the gains.

The S&P 500 gained 0.1 percent to a record of 2,506.65, with telecommunications and financials leading advancers. The Nasdaq composite advanced 0.1 percent and also posted a record close of 6,461.32.
The three major indexes had posted intraday highs on Monday.

The Fed is not expected to raise rates following its meeting. However, many market participants believe the central bank will announce the unwinding of its $4.5 trillion portfolio.

“They’ve kind of laid out the principles for the balance-sheet reduction process, but I expect to see that more formalized,” said Eric Stein, co-director of global income at Eaton Vance.

The U.S. central bank amassed most of its massive balance sheet as it tried to bring the economy back to life following the financial crisis.

“This is going to be unprecedented and every central bank in the world will be watching how” the Fed accomplishes this, said Quincy Krosby, chief market strategist at Prudential Financial. “But investors will also be looking for clues about whether we’ll get another rate hike in December.”

The Fed has already raised interest rates twice this year and it expects to hike once more before year-end. Market expectations for a December rate hike rose to 58.3 percent on Tuesday on strong imports data.

U.S. import prices posted their biggest gain in seven months in August amid a spike in petroleum costs.

Treasury yields rose slightly, with the benchmark 10-year yield at 2.24 percent and the two-year yield at 1.401 percent.

Wall Street also looked to the United Nations, where U.S. President Donald Trump tried to rally members to confront threats like North Korea. In a speech to the U.N. General Assembly, Trump said “North Korea’s reckless pursuit of nuclear weapons and ballistic missiles threatens the entire world with unthinkable loss of human life.”

Tension between the U.S. and North Korea has escalated recently. Last week, the isolated Asian nation launched a missile that flew over Japan before landing in the sea.

The launch took place after the U.N. Security Council unanimously imposed a ban on North Korea’s textile exports and capped its crude oil imports.

Investors also kept an eye on tax-reform prospects, after Sen. Bob Corker told reporters that GOP lawmakers had reached a tentative tax reform-budget deal. Wall Street has been waiting for clarity on tax reform since Trump won the president.

The market’s reaction to the news, however, was muted.

“The market is waiting for something more concrete at this point before really responding,” said Tim Alt, director of rates and currencies at Aviva Investors. “And with the Fed on tap for tomorrow, nobody wants to make any big bets.”

Gold range-bound ahead of US Fed policy statement

Gold held to a narrow range on Wednesday, with investors in a wait-and-see mode ahead of the outcome of a two-day U.S. Federal Reserve meeting that began on Tuesday.

Spot gold rose 0.1 percent to $1,312.54 an ounce by 0308 GMT.

U.S. gold futures for December delivery were up 0.4 percent at $1,316 an ounce.

“Trump’s comments overnight in regards to North Korea have certainly added a bid to the precious complex but all in all very quiet ahead of the (Fed statement),” a Sydney-based trader said, adding that the dollar was providing some support.

U.S. President Donald Trump escalated his standoff with North Korea over its nuclear challenge on Tuesday, threatening to “totally destroy” the country and mocking its leader, Kim Jong Un, as a “rocket man”.

Geopolitical risks tend to boost demand for safe haven assets such as gold and the Japanese yen.

The dollar edged slightly lower against a basket of currencies and against the yen on Wednesday. Asian stocks were steady as movements were limited ahead of the Fed’s monetary policy stance later in the day.

The U.S. Fed is expected to announce its balance sheet reduction plans later on Wednesday and provide an outlook for interest rate hikes for the rest of the year.

A stronger dollar makes the greenback-dominated bullion more expensive for those holding other currencies. Higher interest rates lead to higher bond yields and dampen demand for non-interest bearing gold.

“The majority of the consensus is there will be one more hike this year, and if that remains the case, gold should still remain reasonably well supported with what’s happening geopolitically,” the trader said.

“I think $1,300, $1,290 is certainly a good base for gold unless the Fed changes its wording with regards to how many hikes there will be in the coming months,” the trader said.

Spot gold still targets $1,299 per ounce, said Reuters technicals analyst Wang Tao.

Among other precious metals, silver edged 0.2 percent lower to $17.29 an ounce. Platinum rose 0.5 percent to $953.10 an ounce, after hitting its lowest since early August in the previous session.

Palladium gained 0.6 pct to $913.80 an ounce, after dropping to its lowest since mid-August on Tuesday.

Oil rises after Iraq signals possible OPEC cut extension

Oil prices rose on Wednesday after Iraq’s oil minister said OPEC and other crude producers were considering extending or even deepening a supply cut to curb a global glut, while a report showed a smaller-than-expected increase in U.S. inventories.

U.S. West Texas Intermediate (WTI) crude futures were up 33 cents, or 0.7 percent, at $49.81 a barrel at 0419 GMT. Brent crude futures climbed 23 cents, or 0.4 percent, to $55.37.

While options being considered by the Organization of the Petroleum Exporting Countries and other producers include an extension of cuts in output by months, it is premature to decide on what to do beyond March, when the agreement expires, Iraqi oil minister Jabar al-Luaibi told an energy conference in the United Arab Emirates on Tuesday.

 OPEC and producers including Russia have agreed to reduce output by about 1.8 million barrels per day until March 2018 in a bid to reduce global oil inventories and support prices.

“That won’t be easy as the productivity of oil rigs in the U.S. is expected to rise, so they can get more oil out of the same amount of rigs.”

Meanwhile, U.S. crude stocks rose last week while gasoline and distillate stocks decreased, data from industry group the American Petroleum Institute (API) showed on Tuesday.

Crude inventories rose by 1.4 million barrels in the week to Sept. 15 to 470.3 million, compared with expectations for an increase of 3.5 million barrels. Crude stocks at the Cushing, Oklahoma, delivery hub rose by 422,000 barrels, API said.

Official figures on stockpiles and refinery runs will be released by the U.S. Department of Energy later on Wednesday.

Week Ahead: S&P 500 Extends Losses, Oil Awaits Inventory Numbers

Last week was dominated by politics, from the attempt to recuperate from the North Korea tensions, Charlottesville, and terror in Europe.

The S&P 500 extended a second-week of losses at 2.07-percent, its worst two-day fall since February 2016. It appears that even after seven months of no cohesive agenda, investors are still holding onto to the notion of reflation under President Donald Trump. The market narrative attributes most of last week’s losses to a reduced likelihood of Trump executing his agenda after receiving backlash to his Charlottesville moral equivalency statement.
Monetary Policy

The FOMC minutes from the July meeting revealed key topics among the policy makers: is the inflation impotency temporary or a long-term problem, and what are the implications for the interest rate path? The end result is that the Fed raised rates twice this year, with a possible third on the way. That doesn’t change the economic trajectory.

Investors are keenly aware that any uncertainty expressed by the Fed will compound political hesitation.
Broad-Base Expansion In The EU, But Monetary Policy Uncertain

While economic data has been strengthening in Europe, confirming repeated reports of the non-US market’s advantages—economically, politically and from a valuation perspective—ambiguity across the EU is creating significant potential for market volatility.

The European growth rate is catching up with the US at almost 2.5 percent. Germany was not the only country pushing Europe’s growth; rather, it was joined by the Netherlands and even Italy—after recovering from the verge of a banking crisis. This broad-base expansion provides a more reliable trajectory of further expansion for the Eurozone.

The DAX has been trading in a short-term falling trend since June 20. On August 11, it bounced off the uptrend line since June 24, 2016, the day the Brexit vote results were revealed. The significance of this uptrend line is confirmed by the 200 dma (red) that is retracing it.

However, although the price found support it stopped short of overcoming the short-term downtrend line and has since turned back down. A further bearish indication was the dead-cross execution, when the 50 dma (green) crossed below the 100 dma (blue) on Friday.

The price is fluctuating, and is looking for an opening for the price to move into; either the short-term downtrend line – with a break above 12400.00 – or longer-term uptrend line – with a break below 11800.00.