Surging oil prices buoy precious metals

Date 8/31/2015 8:40:56 AM Source:

Gold prices settled in positive territory for the first time since “Black Monday” as rebounding oil prices supported the precious metals.


Gold for December settlement on the Comex division of the New York Mercantile Exchange jumped $11.40 to settle at $1,134.0 per ounce. The yellow-metal fell four straight sessions before today.


Commodities and equities have recovered after plummeting on Monday – the term “Black Monday” became so popular it was trending in the US on Twitter, a social media application.


Light sweet crude (WTI) oil futures fell below $40 per barrel this week, but recovered and were last up $2.68 or 6.3 percent to $45.24 per barrel.


“Precious metals were dragged up in a typical Friday retracement buoyed by a resurgent oil market which has risen about 15 percent in two days,” Triland Metals said in a note.


Additionally, SPDR Gold trust – the world’s largest gold exchange-traded-fund – saw inflows of 1.5 tonnes yesterday, demonstrating that gold is still an attractive investment option for market participants.


In news,  investors will parse the language of various Fed officials during the multi-day Jackson Hole Symposium in Wyoming for any clues on the central bank’s decision whether to raise interest rates or not.


It should be noted that Federal Reserve Chairwoman Janet Yellen is not in attendance.


In US data today, Core PCE price index was in-line with estimates at a 0.1 percent increase, with personal income coming also matching expectations of 0.4 percent uptick.


However, personal spending rose 0.3 percent, below forecast of 0.4 percent.


University of Michigan consumer sentiment was at 91.9, missing the consensus of 93.2, while inflation came in at 2.9 percent, above the previous reading of 2.8 percent.


Turning to wider markets, UK second estimate GDP quarter-over-quarter matched consensus at 0.7 percent, while preliminary business investment quarter-over-quarter jumped 2.9 percent, above the projected 1.6 percent gain.


In US equities, the Dow Jones industrial average and S&P were down 0.4 percent and 0.3 percent respectively, while the dollar was 0.5 percent stronger at $1.1185 against the euro.


As for the other precious metals, Comex silver for September delivery increased 11.30 cents to $14.530 per ounce. Trade has ranged from $14.340 to $14.650.


Platinum for October delivery on the Nymex rose $15.60 to $1,021.60 per ounce, while the most-actively traded palladium contract was at $588.00 per ounce, up $20.30.




Edited by SHMET