U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled lower on Tuesday as investors used the stronger dollar as an excuse to book profits after Monday’s
Trump’s Warning to North Korea Boosts Gold Prices – A stronger U.S. Dollar helped drive gold prices lower on Tuesday, erasing some of Monday’s gains. A weaker Euro helped drive the dollar up against a basket of currencies as investors priced in the developing divergence in the monetary policies of the U.S. Federal Reserve and the European Central Bank. Mixed U.S. Treasury yields may have also contributed to the weakness in the gold market. The yield on the benchmark 10-year Treasury note fell to 2.313 percent, while the yield on the 30-year Treasury bond fell slightly to 2.776. In other news, it was another light economic report day on Tuesday, giving investors the opportunity to react to speeches by FOMC Member Randal Quarles and Fed Chair Janet Yellen. In his first public speech, new Federal Reserve Governor Randal Quarles said that he believes the central bank needs to give serious consideration to what banking regulations need to be changed. Fed Chair Janet Yellen also gave a speech on Tuesday and she also did not discuss monetary policy. She said that ethical behavior from the Fed allows the public to trust it is acting on its behalf. Both speeches had no effect on gold prices since the Fed officials refrained from making any comments on monetary policy.
API Reports Smaller-Than-Expected Crude Oil Draw – U.S. West Texas Intermediate and international-benchmark Brent crude oil futures settled lower on Tuesday as investors used the stronger dollar as an excuse to book profits after Monday’s steep run-up in prices. Traders also reacted to a report calling for increased U.S. production next year. The U.S. Energy Information Administration forecast domestic production in 2018 to rise by more than previously expected. Tension between Saudi Arabia and Iran and the geopolitical events involving the Saudi crown prince and his quest for power continued to underpin the market. Monday’s rally was driven by short-term speculation in response to these events. The longer-term picture continues to look bullish with strong hedge fund longs supporting the markets due to expectations that the OPEC-led coalition would extend its program to cut production, trim the global supply glut and stabilize prices beyond the March 2018 deadline.
Trader Reaction to $3.160 Will Set the Tone Today – Natural gas prices surged early in the session on Tuesday with traders even attempting a breakout above a key technical retracement zone. Prices retreated from their intraday high at $3.176, but the futures contract still managed to post a solid gain. The market continued to be supported by forecasts for increased heating demand over the next two weeks. According to natgasweather.com for the November 7 to 13 time period, “Chilly conditions will continue across the north-central U.S. the next few days with lows of single digits to 20s” “The East Coast will cool mid-week as a frontal boundary moves through with highs of upper 40s to 60s.” “A rather cold weather system will track across the upper Midwest and Northeast Friday to Saturday for a surge in heating demand as lows drop into the teens and 20s.” “The southern U.S. will be mild to warm with highs mainly in the upper 60s to 80s.” “Overall, demand will be moderate through Thursday, then high Friday through Sunday.”
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