Gold Edges Higher Ahead of Key US Economic Data

Gold prices edged higher during Asian trading hours today, Wednesday, supported by a decline in US Treasury yields. However, prices remained rangebound as investors await further US data to gauge the Federal Reserve’s next move on monetary policy.

Gold and the Dollar Now

  • Spot gold is up 0.22% to $2352 an ounce.
  • Gold futures are up about 0.25% to $2333 an ounce.
  • On the other hand, the dollar index is up 0.16% to 104.215 points.

Other Metals

Silver rose 0.7% to $29.69 an ounce in spot trading, platinum gained 0.6% to $992.85, and palladium rose 0.9% to $923.83.

Oil Prices Plunge Sharply, Global Bank Expects Collapse to $70

Ahead of the OPEC meeting this weekend to discuss commodity markets and maintain supply constraints, Swiss group Julius Baer issued a client note suggesting that oil prices could reach $70 this year. However, geopolitics remains a “noise factor” that could impact prices.

As Julius Baer, which sees ample supply and a market climate heading towards a downturn, says, “While the decision to phase out supply cuts starting later this year may seem surprising, it simply acknowledges that oil-producing countries are becoming concerned about losing market share.”

Norbert Rucker, Head of Economics and Next Generation Research at Julius Baer, also points out that “the decisions are to keep production quotas roughly unchanged until the end of 2025 but to gradually phase out voluntary cuts between the end of 2024 and the end of 2025. This could be a somewhat bearish outcome for the oil market, as production increases are now officially announced.”

The Swiss group also notes that the market has been balanced in recent months, even with previously announced supply constraints, with demand growth being offset by increased supply, particularly from the Americas.

Oil Prices Today

Oil prices continue their sharp decline for the second day of the week, losing nearly 3% yesterday and continuing to fall today. Brent oil is trading at $76.85 a barrel, down 2% on the day, while WTI oil fell to $72.55 a barrel, down 2.8%.

Why Did Oil Plunge to a 4-Month Low?

Oil prices are hovering near four-month lows in Asia today, Wednesday, as markets absorb OPEC+’s decision to increase supply later this year and following a rise in US crude and fuel inventories.

The decline came after news from OPEC and its allies of plans to increase supply from October onwards, despite recent indications of weak demand growth.

In the United States, crude oil, gasoline and distillate inventories rose last week, according to sources citing American Petroleum Institute figures.

Oil Futures

Crude oil futures rose during Asian trading on Wednesday.

According to the New York Mercantile Exchange, July crude oil futures were trading at USD73.25 per barrel at the time of writing, up 0.00%. The session high was traded at USD73.34 per barrel. Crude oil may find support at USD72.48 and resistance at USD79.42.

Dollar Index futures, which measure the performance of the US dollar against a basket of six other major currencies, rose 0.08% to trade at USD104.14. Meanwhile, on NYMEX, August Brent oil rose 0.03% to trade at USD77.54 per barrel, while the spread between Brent and WTI crude stands at USD4.29 per barrel

Disclaimer: This article is not investment advice or an investment recommendation and should not be considered as such. The information above is not an invitation to trade and it does not guarantee or predict future performance. The investor is solely responsible for the risk of their decisions. The analysis and commentary presented do not include any consideration of your personal investment objectives, financial circumstances, or needs.

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