Gold continues to slide on Federal Reserve policy murkiness
Gold prices slid on Tuesday amid ongoing uncertainty over the fate of the Federal Reserve's USD85 billion in monthly bond purchases, which weaken the dollar to spur recovery, making gold an attractive hedge while such ultra-loose monetary policies remain in effect.
Gold futures were likely to find support at USD1,291.70 a troy ounce, Wednesday's low, and resistance at USD1,331.80, Monday's high.
Gold prices soared last week after the Fed made no changes to its USD85 billion bond-buying program.
Many market participants were expecting the U.S. central bank to trim the total by USD10 billion or more.
Conflicting statements from Federal Reserve officials since then have made it unclear when the U.S. central bank will begin scaling back its bond-buying program, which took its toll on gold, especially amid broad expectations that a start date for tapering could come in December.
On Friday, St. Louis Fed President James Bullard said the Fed could decide at its October monetary policy meeting to taper its USD85 billion monthly asset-purchasing program.
The Federal Reserve will hold its next monetary policy meeting Oct. 29-30 but is not due to hold a press conference that day, which left many expecting a decision to taper asset purchases to come in December.
On Monday, however, Federal Reserve Bank of New York President William Dudley said monetary authorities want to be sure recovery is sustained before dismantling stimulus programs.
Gold futures were likely to find support at USD1,291.70 a troy ounce, Wednesday's low, and resistance at USD1,331.80, Monday's high.
Gold prices soared last week after the Fed made no changes to its USD85 billion bond-buying program.
Many market participants were expecting the U.S. central bank to trim the total by USD10 billion or more.
Conflicting statements from Federal Reserve officials since then have made it unclear when the U.S. central bank will begin scaling back its bond-buying program, which took its toll on gold, especially amid broad expectations that a start date for tapering could come in December.
On Friday, St. Louis Fed President James Bullard said the Fed could decide at its October monetary policy meeting to taper its USD85 billion monthly asset-purchasing program.
The Federal Reserve will hold its next monetary policy meeting Oct. 29-30 but is not due to hold a press conference that day, which left many expecting a decision to taper asset purchases to come in December.
On Monday, however, Federal Reserve Bank of New York President William Dudley said monetary authorities want to be sure recovery is sustained before dismantling stimulus programs.
Crude prices extend losses amid thawing U.S.-Iran tensions
Crude oil futures extended Monday's losses into Tuesday after tensions between the U.S. and Iran continued to thaw and allayed fears of geopolitical tensions that could flare into conflict in the Middle East and threaten global supply.
At the United Nations General Assembly on Tuesday talk that U.S. President Barack Obama could possibly meet with his Iranian counterpart, Hassan Rouhani, even for just a handshake pushed prices down, especially by doing away with fears that the U.S. might strike Iranian ally Syria for its alleged use of chemical weapons.
Elsewhere, U.S. Secretary of State John Kerry is scheduled to meet with Iranian Foreign Minister Mohammad Javad Zarif on Thursday.
The meeting would mark the highest-level encounter between the two countries since 1979.
Thawing tensions between the West and Iran could eventually mean an end to oil sanctions slapped on the Middle East country and boost global supply, which could weigh down prices even further.
Futures hit a 27-month high of USD112.22 a barrel on Aug. 28 amid sentiments that the U.S. was close to taking military action against Syria for its alleged use of chemical weapons against civilians.
Reports that Libyan oil production is on the rise after protesters reopened access to facilities late last week sent oil prices falling as well.
At the United Nations General Assembly on Tuesday talk that U.S. President Barack Obama could possibly meet with his Iranian counterpart, Hassan Rouhani, even for just a handshake pushed prices down, especially by doing away with fears that the U.S. might strike Iranian ally Syria for its alleged use of chemical weapons.
Elsewhere, U.S. Secretary of State John Kerry is scheduled to meet with Iranian Foreign Minister Mohammad Javad Zarif on Thursday.
The meeting would mark the highest-level encounter between the two countries since 1979.
Thawing tensions between the West and Iran could eventually mean an end to oil sanctions slapped on the Middle East country and boost global supply, which could weigh down prices even further.
Futures hit a 27-month high of USD112.22 a barrel on Aug. 28 amid sentiments that the U.S. was close to taking military action against Syria for its alleged use of chemical weapons against civilians.
Reports that Libyan oil production is on the rise after protesters reopened access to facilities late last week sent oil prices falling as well.
Natural gas prices tumble as milder weather settles in over U.S.
Natural gas prices fell on Tuesday after updated weather forecasting models called for milder temperatures to continue hovering over much of the U.S. through early October.
Weather forecasting services called for seasonably mild temperatures across much of the eastern U.S., though swathes of above-normal temperatures returning to the central reaches of the country began to curb losses in Tuesday trading.
Demand for natural gas tends to wane at the country's thermal power plants as temperatures fall, as homes and businesses throttle back on their air conditioners, especially in autumn and in spring.
Hot or cold temperatures tend to boost demand for the commodity.
Elsewhere, U.S. supply levels remained in focus. Total U.S. natural gas storage stood at 3.299 trillion cubic feet as of last week, 0.5% above the five-year average for the same week and 5.4% below last year's unusually high level.
Early injection estimates for this week’s storage data range from 70 billion cubic feet to 80 billion cubic feet, compared to a 79 billion cubic feet increase during the same week a year earlier.
Weather forecasting services called for seasonably mild temperatures across much of the eastern U.S., though swathes of above-normal temperatures returning to the central reaches of the country began to curb losses in Tuesday trading.
Demand for natural gas tends to wane at the country's thermal power plants as temperatures fall, as homes and businesses throttle back on their air conditioners, especially in autumn and in spring.
Hot or cold temperatures tend to boost demand for the commodity.
Elsewhere, U.S. supply levels remained in focus. Total U.S. natural gas storage stood at 3.299 trillion cubic feet as of last week, 0.5% above the five-year average for the same week and 5.4% below last year's unusually high level.
Early injection estimates for this week’s storage data range from 70 billion cubic feet to 80 billion cubic feet, compared to a 79 billion cubic feet increase during the same week a year earlier.
Economic Events:
Time
|
Cur.
|
Event
|
Forecast
|
Previous
|
Wednesday, September 25
| ||||
14:00
|
GBP
|
Business Investment (QoQ)
|
0.90%
|
0.90%
|
15:30
|
GBP
|
CBI Distributive Trades Survey
|
24
|
27
|
16:30
|
USD
|
MBA Mortgage Applications (WoW)
|
11.20%
| |
18:00
|
USD
|
Core Durable Goods Orders (MoM)
|
1.00%
|
-0.80%
|
18:00
|
USD
|
Durable Goods Orders (MoM)
|
0.20%
|
-7.40%
|
19:30
|
USD
|
New Home Sales (MoM)
|
7.90%
|
-13.40%
|
19:30
|
USD
|
New Home Sales
|
420K
|
394K
|
20:00
|
USD
|
Crude Oil Inventories
|
-1.129M
|
-4.368M
|
20:00
|
USD
|
EIA Weekly Distillates Stocks
|
-0.593M
|
-1.079M
|
20:00
|
USD
|
Gasoline Inventories
|
0.143M
|
-1.627M
|
22:30
|
USD
|
5-Year Note Auction
|
1.62%
| |
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