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GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices[1] rise despite stronger US Dollar[2], firming Fed outlook
  • Crude oil also higher, echoing broad-based upshift in commodities
  • Beige Book survey, EIA inventory flow figures now in the spotlight

Gold prices proved to be remarkably resilient yesterday, finishing the day with a narrow increase despite a recovery in the US Dollar and a steepening of the priced-in Fed interest rate hike outlook. Those forces might have been expected to weigh on the perennial anti-fiat and non-interest-bearing asset.

The yellow metal saw a bit of selling pressure early in the day but brushed these headwinds aside, rising alongside a broad-based upswing in raw-materials prices. Crude oil prices also participated, with both moves tracking a coordinated rise in global commodity market benchmarks.

A clear catalyst for the move is not apparent. That it began just as Wall Street came online may point to a latent response to Chinese GDP data. It saw growth holding at 6.8 percent on-year whereas leading surveys warned of a slowdown before the release. Local markets brushed off the print amid lingering worries about monetary tightening[3].

FED BEIGE BOOK, EIA INVENTORY DATA ON TAP

Looking ahead, the Fed Beige Book of regional economic conditions is on tap. If it reinforces optimism on display in recent comments from US central bank officials, gold may retreat as rate hike bets continue to firm. A risk-on bias hinted in S&P 500[4] futures may compound pressure as bond yields rise.

Meanwhile, crude oil is eying EIA inventory flow data. Stockpiles are expected to have added 393.6k barrels last

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currensceneFLOGO WHTsquareThough not the oldest form of currency, some form of shell money appears to have been found on almost every continent. The shell most widely used worldwide as currency was the shell of Cypraea moneta, the money cowry.

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