Gold gains ground after U.S. slide
Gold futures are trading higher in the early part of Friday’s Asian session following another brutal day in the U.S.
With February in the books, gold lost 5% for the month and the yellow metal is now in the midst of five-month losing streak. That is the worst monthly losing streak for bullion since 1996. A spate of decent economic news plagued gold Thursday.
In U.S. economic news, the Commerce Department’s revision to U.S. fourth-quarter GDP showed growth of 0.1% compared with the prior reading that showed a contraction of 0.1%. Economists expected the revision to show growth of 0.5%.
The Labor Department said initial claims for jobless benefits fell by 22,000 to 344,000 last week. Economists expected a decline to 360,000 new claims. The number of people receiving unemployment benefits fell by 91,000 to a seasonally adjusted 3.074 million.
The Institute for Supply Management said its Chicago area purchasing managers index rose to 56.8 from 55.6 in January. Economists expected a February reading of 54.
Reaction to those data points indicate gold’s safe-haven status is not serving gold bugs well right now and that status could once again be put to the test with imminent sequestration spending cuts. Barring unforeseen, immediate action USD85 billion in spending cuts by the U.S. government will go into effect later today.
There is speculation those cuts could hamper job growth and other parts of the U.S. economy, but that could chase more investors to the U.S. dollar rather than gold.
With February in the books, gold lost 5% for the month and the yellow metal is now in the midst of five-month losing streak. That is the worst monthly losing streak for bullion since 1996. A spate of decent economic news plagued gold Thursday.
In U.S. economic news, the Commerce Department’s revision to U.S. fourth-quarter GDP showed growth of 0.1% compared with the prior reading that showed a contraction of 0.1%. Economists expected the revision to show growth of 0.5%.
The Labor Department said initial claims for jobless benefits fell by 22,000 to 344,000 last week. Economists expected a decline to 360,000 new claims. The number of people receiving unemployment benefits fell by 91,000 to a seasonally adjusted 3.074 million.
The Institute for Supply Management said its Chicago area purchasing managers index rose to 56.8 from 55.6 in January. Economists expected a February reading of 54.
Reaction to those data points indicate gold’s safe-haven status is not serving gold bugs well right now and that status could once again be put to the test with imminent sequestration spending cuts. Barring unforeseen, immediate action USD85 billion in spending cuts by the U.S. government will go into effect later today.
There is speculation those cuts could hamper job growth and other parts of the U.S. economy, but that could chase more investors to the U.S. dollar rather than gold.
Oil lower on new of U.S. production increases
Oil futures are trading lower in the early going of Friday’s Asian session despite a trio of solid economic reports delivered by the U.S. on Thursday.
On the New York Mercantile Exchange, light, sweet crude futures for April delivery fell 0.42% to USD91.67 per barrel in Asian trading Friday. The declines may be the result of China’s latest PMI number.
Earlier today, official data showed China’s February PMI fell to 50.1 from 50.4 in January. Economists expected a February reading of 50.5. Readings above 50 signal expansion, though China’s reading is barely in expansion territory. China is the world’s second-largest oil consumer.
In U.S. economic news, the Commerce Department’s revision to U.S. fourth-quarter GDP showed growth of 0.1% compared with the prior reading that showed a contraction of 0.1%. Economists expected the revision to show growth of 0.5%.
The Labor Department said initial claims for jobless benefits fell by 22,000 to 344,000 last week. Economists expected a decline to 360,000 new claims. The number of people receiving unemployment benefits fell by 91,000 to a seasonally adjusted 3.074 million.
The Institute for Supply Management said its Chicago area purchasing managers index rose to 56.8 from 55.6 in January. Economists expected a February reading of 54.
Slower growth in the U.S., the world’s largest oil consumer, and China could be weighing on oil, but another catalyst may be at play as well.
On Thursday, it was reported that the U.S. is pumping 7 million barrels of oil per day, the highest levels since 1992. Lead by increased production at shale formations in Texas and North Dakota, the U.S. has recently become a net oil exporter. That is good news for the U.S., but not necessarily for oil prices because no other country, not even China, comes close to the level of oil consumption in the U.S.
On the New York Mercantile Exchange, light, sweet crude futures for April delivery fell 0.42% to USD91.67 per barrel in Asian trading Friday. The declines may be the result of China’s latest PMI number.
Earlier today, official data showed China’s February PMI fell to 50.1 from 50.4 in January. Economists expected a February reading of 50.5. Readings above 50 signal expansion, though China’s reading is barely in expansion territory. China is the world’s second-largest oil consumer.
In U.S. economic news, the Commerce Department’s revision to U.S. fourth-quarter GDP showed growth of 0.1% compared with the prior reading that showed a contraction of 0.1%. Economists expected the revision to show growth of 0.5%.
The Labor Department said initial claims for jobless benefits fell by 22,000 to 344,000 last week. Economists expected a decline to 360,000 new claims. The number of people receiving unemployment benefits fell by 91,000 to a seasonally adjusted 3.074 million.
The Institute for Supply Management said its Chicago area purchasing managers index rose to 56.8 from 55.6 in January. Economists expected a February reading of 54.
Slower growth in the U.S., the world’s largest oil consumer, and China could be weighing on oil, but another catalyst may be at play as well.
On Thursday, it was reported that the U.S. is pumping 7 million barrels of oil per day, the highest levels since 1992. Lead by increased production at shale formations in Texas and North Dakota, the U.S. has recently become a net oil exporter. That is good news for the U.S., but not necessarily for oil prices because no other country, not even China, comes close to the level of oil consumption in the U.S.
Natural Gas gains on bullish supply data, chilly weather forecasts
Natural gas futures rose on Thursday after the U.S. government reported earlier that inventories fell more than anticipated last week.
Forecasts for cold weather to stick around pushed up prices as well.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.491 per million British thermal units, up 1.67%.
The commodity hit a session low of USD3.396 and a high of USD3.491.
Inventories fell by 106 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 118 billion cubic feet.
Total U.S. natural gas storage stood at 2.299 trillion cubic feet as of last week. Stocks were 307 billion cubic feet less than last year at this time and 308 billion cubic feet above the five-year average of 1.921 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 71 billion cubic feet above the five-year average, following net withdrawals of 109 billion cubic feet.
Stocks in the Producing Region were 164 billion cubic feet above the five-year average of 711 billion cubic feet after a net withdrawal of 50 billion cubic feet.
Meanwhile, weather forecasting models continued to indicate that colder-than-normal temperatures settling in for much of the heavily populated central and eastern portions of the country will stick around longer than expected, which pushed up prices as well.
Natural gas futures are very sensitive to weather reports in the U.S. winter.
The U.S. heating season, which runs from November through March, sees peak demand for gas.
About half of U.S. households use gas for heating purposes, according to Energy Department data
Forecasts for cold weather to stick around pushed up prices as well.
On the New York Mercantile Exchange, natural gas futures for delivery in April traded at USD3.491 per million British thermal units, up 1.67%.
The commodity hit a session low of USD3.396 and a high of USD3.491.
Inventories fell by 106 billion cubic feet in the same week a year earlier, while the five-year average change for the week is a decline of 118 billion cubic feet.
Total U.S. natural gas storage stood at 2.299 trillion cubic feet as of last week. Stocks were 307 billion cubic feet less than last year at this time and 308 billion cubic feet above the five-year average of 1.921 trillion cubic feet for this time of year.
The report showed that in the East Region, stocks were 71 billion cubic feet above the five-year average, following net withdrawals of 109 billion cubic feet.
Stocks in the Producing Region were 164 billion cubic feet above the five-year average of 711 billion cubic feet after a net withdrawal of 50 billion cubic feet.
Meanwhile, weather forecasting models continued to indicate that colder-than-normal temperatures settling in for much of the heavily populated central and eastern portions of the country will stick around longer than expected, which pushed up prices as well.
Natural gas futures are very sensitive to weather reports in the U.S. winter.
The U.S. heating season, which runs from November through March, sees peak demand for gas.
About half of U.S. households use gas for heating purposes, according to Energy Department data
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