Gold overshadows battered crude on US slowdown
2023-11-17
Summary:
Asian oil prices are set for a fourth consecutive weekly drop, tumbling 5% to four-month lows amid demand worries on Thursday.
Oil prices were on track for the fourth straight week of decline in early Asian trade. They dropped around 5% on Thursday to four-month lows on demand concerns.
The number of Americans filing new claims for unemployment benefits increased to a three-month high last week, following a separate report showing retail sales fell the first time in seven months in Oct.
On the supply side, crude inventories rose by 3.6 million barrels in week to 10 Nov, compared with analysts' expectations for a rise of 1.8 million barrels.
Elsewhere runs at Chinese oil refineries eased in October from the previous month's highs as industrial fuel demand weakened and refining margins narrowed.
Analysts said that the recent drop in prices is also likely to make Saudi Arabia extend oil output cuts into 2024. Both OPEC and the IEA predicted supply tightness in the current quarter.
Gold prices rose more than 1% in the previous session, on track for their first weekly gain in three, as investors are more convinced that the Fed is done with interest rate hikes.
We maintain our forecast that gold does not have much room to rise given still-high Treasury yields. It may offer an opportunity to take a short position if bullion takes another step towards $2000.
Disclaimer: This material is for general information purposes only and is not intended as (and should not be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by EBC or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person.
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