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.