FB: Gold Slightly Lower, Gets Scant Help From Oil Bounce
(Kitco News) – Gold prices are steady to slightly lower in early U.S. dealings Thursday. A spike in crude oil prices Wednesday afternoon was only slightly supportive for the precious metals markets. December Comex gold was last down $0.40 an ounce at $1,322.90. December Comex silver was last down $0.016 at $19.11 an ounce.
Crude oil rallied following the surprise news Wednesday afternoon that the OPEC oil cartel, at its meeting in Algiers, reached a preliminary agreement to reduce its collective oil production by a bit less than 1 million barrels a day. The deal will be finalized at OPEC’s November meeting. Most energy market watchers did not believe OPEC would make any significant moves to reduce their crude oil output at this meeting. Nymex crude oil futures prices initially spiked about $2.00 higher Wednesday afternoon on the news. Oil prices Thursday had backed off a bit, as some in the energy industry are still skeptical a final agreement will be reached in November, saying that Iran and Saudi Arabia will not work together to cut oil output. World markets have been extra-sensitive to crude oil’s daily price movements recently.
World stock markets were lifted overnight on the OPEC news, giving the marketplace a “risk-on” attitude that is bearish for the safe-haven gold market. U.S. stock indexes are pointed toward slightly lower openings when the New York day session begins.
U.S. economic data due for release Thursday includes the weekly jobless claims report, the advance economic indicators report, the final gross domestic product report for the second quarter, and pending home sales.
(Note: Follow me on Twitter–@jimwyckoff–for breaking market news.)
Wyckoff’s Daily Risk Rating: 2.5 (Trader and investor market risk aversion is not elevated today.)
(Wyckoff’s Daily Risk Rating is your way to quickly gauge investor risk appetite in the world market place each day. Each day I assess the “risk-on” or “risk-off” trader mentality in the market place with a numerical reading of 1 to 5, with 1 being least risk-averse (most risk-on) and 5 being the most risk-averse (risk-off).
