Oil sees stability while U.S. crude inventories take a fall
Gold benefits from dollar declining against the Yen
Gold:
Gold continues to see better days while the dollar takes abuse against the Yen on potential future U.S. trade disputes with Japan. The topic of U.S. introducing new trade tariffs arose from a report that claimed Trump could possibly begin to rectify trade issues with the state. The consequences of this plan that Trump wishes to carry out had led to further decreases in the dollar. Moreover, the greenback has recently seen lows while European currencies and gold have begun to increase.
Gold has seen an increase and the stronger Yen has a part to play in this. This is because as the Yen grows while the dollar shows weakness it promotes the holders of JPY to profit from gold. Therefore, the precious metal has benefited from this.
On the other hand, the fate of the markets are reliant upon the employment data which is due to be released today. Depending upon the results, the dollar could see highs if the report favours the fed and rate hikes continue as planned. However, as of now it is nothing but a waiting game where the markets could go either way once the data is released. Nevertheless, at present it seems gold may continue to rise as it has been horribly over sold while the dollar has been overbought.
Oil:
Oil stabilises in price as data release on Thursday for U.S. crude inventories take a major fall. The figures which had appeared from the data release were at their lowest since 2015. Moreover, the reasons behind such negative results could possibly be due to a lower consumption levels in the driving season which is usually when gasoline is at its highest demand.
The current weakness that the emerging markets face as well as heavy lethal tariffs on Chinese goods also have a part to play in U.S. crude inventories entering on a major decline. International Brent crude futures have been priced at around $76.42 per barrel which was 8 cents decrease from the previous session. In addition, the reason behind this weigh upon the fact that demand is not as high as expected for the high driving season.
Additionally, another vital factor towards why consumer spending and demand on oil has dropped could be because of the recent events which have shortened supply and have led to price increases. Lastly, emerging market currency crisis has also taken its toll on the oil industry as weaker currencies mean weaker spending ability. This leads to reduced usage of fuel.
