US Crude Recovery May Be Limited, Natural Gas Braces For Storage Data
(MENAFN- DailyFX) Gold slumped on Wednesday as its pricing currency the USD gained on the back of the December FOMCdecision. The removal of the 'considerable time' phrase from the policy statement, and an upgrade to the US growth outlook offered positive cues for the greenback.
Looking ahead medium-tier economic data including US Initial Jobless Claims likely have a high-threshold to impress traders in the aftermath of the Fed meeting. At the same time it would likely take a material negative surprise to the US data to dent the USD and lead a recovery for gold.
Meanwhile, the crude benchmarks recovered some ground in recent trade. This was despite another generally negative Inventories Report from the DOE. Crude stockpiles declined less than anticipated, refinery utilization dropped and the rate of US production climbed to another fresh multi-decade high. This suggests crude's rebound is more reflective of a corrective bounce / profit taking. Rather than a shift in the supply glut story, which may in turn limit the extent of a recovery.
Finally, natural gas may be in store for further volatility on the back of upcoming storage data. The winter drawdown has begun as chilly weather sweeps across the US. Yet prices for the energy commodity may remain under pressure if the pace of stockpile declines is moderate compared to prior years.
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