Date: 10 Rabbi al-Awwal 1442   Monday 26 October 2020

  • Last Update: Monday 26 October 2020، 08:05:03.

Gold prices continued losses in recent sessions
Gold prices unstable as traders anticipates Feds interest rate

14:47 15 March 2017 Author :  

NEW YORK

Gold prices continued losses in recent sessions due to uncertainty surrounding political issues and expectations for a Federal Reserve interest-rate hike.

At the upcoming Federal Open Market Committee meeting, the Feds Chairwomen Janet Yellen is likely to raise the interest rate to a quarter of a percentage or (0.25 percent). This anticipated raise, expected to erode demand of gold, will be the second this year barring economic setback. The Feds is expected to issue two more raises by the end of the year.

Last week, Yellen announced that if the economic outlook continues to look strong, the central bank will raise interest rates. Along with economic growth, such raise will likely force gold prices to fall.
The precious metal fell more than 2.60 percent since its rise in February, to trade at the range of USD 1,200 per ounce. Many factors influence the spot price of Gold, as the prices change every few seconds with an unlimited number of components that play a role in its price.

Some of the factors affecting Gold prices are current political events, market speculation, currency values, supply and demand as well as buying power. These elements, coupled with a strain on crude oil prices, could trigger the interest rate raise.

According to an Energy Information Agency (EIA) report, crude inventories rose by 8.2 million barrels last week despite expectations of supply growth of just 1.2 million barrels. With such sharp spike, oil inventories reached an all-time high.

Oil prices hit lowest points after US government data showed that domestic crude inventories hit a record and production edged higher.

US crude oil stocks were rising, as gasoline inventories are climbing to unprecedented heights. According to the inventory numbers, the glut of gasoline is the worst in 27 years. With 259 million barrels, US gasoline storage levels high record highs since the EIA started tracking the data back in 1990.

Since the start of the year, the West Texas Intermediate (WTI) at the New York Mercantile Exchange (NYMEX) was traded between USD 50-55 a barrel. However, the closer the anticipated Feds meeting, the lower the prices were. On Monday, WTI futures dropped to USD 48 range (12.9 percent) below their three-month high of almost USD 57.

Oil is still maintaining its annual gains and is up over percent from a year ago.

Based on data in EIA's Monthly Crude Oil, Lease Condensate, and Natural Gas Production Report, the average crude oil production in the Lower 48 states fell to 8.39 million barrels per day last year, a decrease of approximately 0.55 million barrel per day, or 6.1 percent from the 2015 average.

The report confirmed natural gas gross withdrawals in the Lower 48 states also decreased in 2016, averaging 80.39 billion cubic feet per day, 1.3 percent lower than in 2015.

The EIA raised its 2017 US crude output forecast to 9.2 million barrels per day from a prior outlook of 8.98 million and raised its 2018 outlook to 9.73 million from 9.53 million With such performance, the US oil production kept steady increases, which have helped maintain the prices in a specific range in recent months, after a surge late in 2016.

The price increase came when the Organization of the Petroleum Exporting Countries (OPEC) and other key non-OPEC countries agreed to cut their output by up to 1.8 million bpd during the first half of the year.

Over the past week, Oil Futures dropped about 10 percent with traders being disappointed by the ability of OPEC-led control over the oil supplies, as well as US oil supply.

KUNA

  • عنوان تمهيدي: Gold prices continued losses in recent sessions
Read 5976

Related News:

Weather

Partly Cloudy

15°C

Kuwait

Partly Cloudy

Humidity: 75%

Wind: 30.58 km/h

  • 04 Jan 2019

    Sunny 18°C 12°C

  • 05 Jan 2019

    Mostly Sunny 17°C 11°C

  • Most Popular
  • Most Commented
Top