Published on 13/07/2017 1:10:14 PM | Source: IIFL Ltd
Crude oil futures moved higher - IIFL
Gold prices have scaled higher ,as markets seem to have interpreted Fed Chief Janet Yellen’s remarks as relatively dovish in her testimony to US Congress .She stated that the central bank will normalise the policy in such manner that it neither stimulates nor supress economic activity ,implying that interest rates may not rise much further. Such remarks immediately translated into softening in US dollar and sovereign bond yields. In terms of forecasts for rate hikes, interest rate futures ( traded on CME) projrct no rate move till December policy meeting.In this regard, the current indications suggest a 47% prior to Yellen’s testimony . As far as short term outlook on gold is concerned , it is an onerous task to gauge how the yellow metal will respond to the counterbalancing forces of rising sovereign yields , buoyant global equities amid weak greenback and aggravating legislative &political uncertainty in US.
In energy markets, crude oil futures moved higher initially as Energy Information Administration reported that decline in US crude oil inventories during last week was the steepest in ten months. Oil stockpoles fell 7.6 mn barrels, a orecipitous fall when compared with the expectations for a drawdown of 2.9 mn barrels. However, oil futures later pared gains as US gasoline demans was reported on a weak note ,while distillate stockpiles rose more than expected.
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