Gold Daily Fundamental Analysis
Gold continued the tight range trading on Tuesday and lacked the major momentum with the optimism on the one end trimming its haven appeal and the softer dollar on the other end sustaining the gains.
The metal was hovering marginally around $1,500 on Tuesday with the market optimistic and unwinding the high default bets for Greece after the parliament passed the vote on the five-year austerity package.
On Tuesday the Greek parliament passed the 78 billion euro five-year austerity package with 155 votes in the 300-seat parliament. The news came in line with the expectation in the market and staved off a feared selloff if it was indeed blocked amid the violent riots in Greece.
With the passed package, the fears of default eased for now and the focus remains on the finance chiefs and leaders to release the fifth tranche and move forward with the new bailout to ease the jitters for now. This slight relief has trimmed the bullishness for gold as the metal rallied in the past period on haven demand with rising risk of default, yet on the other hand, it also prevented a catastrophic selloff on gold and accordingly, the metal retains its precious appeal and it remains another win-win situation for gold.
On Wednesday, the volatility will remain as the parliament votes again on the law to enact the package, which is less important that Tuesday’s vote and will likely go accordingly. The vote is still though important and needed for finance minister Evangelos Venizelos to head to the Sunday finance ministers meeting and argue for the bailout, as the EU and IMF stressed that both votes pass for Greece to get the aid.
Gold is now trading within a tight range and bolstered by a weak dollar and rising commodities, and with this consolidation, the appeal for the metal is further sustained to the upside as the relief rally which is pressuring gold might not be a new trend as it remain temporary in nature and markets still face inflation, slowing growth and fiscal imbalance woes that will keep gold biased bullishly.
Natural Gas Daily Fundamental Analysis
Natural gas were little changed on Wednesday after rising over the past two days on expectations of warm weather conditions that should increased demand for power-plant fuel, where traders are eyeing the inventory data that is due on Thursday, as the EIA report for natural gas inventories is expected to show that stockpiles increased by 80 billion cubic feet.
Traders will be focused on the EIA report, and natural gas prices will move based on the actual figure, where if inventories rise above expectations, we should expect natural gas prices to drop, but even if natural gas prices drop, we shouldn’t expect the drop to continue for long, since higher than average temperatures will probably push prices higher.
Thursday June 30:
At 14:30 GMT, The EIA will release the weekly natural gas storage change for the week ending June 24, where the prior report showed that natural gas inventories increased by 98 billion cubic feet, and Thursday’s report is expected to show stockpiles increased by 80 BCF.
Crude Oil Daily Fundamental Analysis
Crude oil prices extended the gains on Wednesday after the Greek parliament approved the austerity plan needed for Greece to receive bailout from the IMF and the EU, which boosted demand for higher yielding assets including crude oil. Moreover, the EIA report for crude oil inventories showed a bigger than expected drop in stockpiles, which provided crude oil prices with strong momentum to rally above $95 a barrel.
The EIA report for the week ending June 24, showed that crude oil inventories decreased by 4.4 million barrels, compared with the prior drop of 1.7 million barrels and bigger than the expected drop of 1.5 million barrels.
We advise traders to remain cautious amid the huge uncertainty still surrounding the outlook, however, rising confidence in financial markets could still provide crude oil prices with more momentum to rise further, nonetheless, if pessimism is back to dominate markets, crude oil prices will drop back
