Gold Higher After OPEC Deal extension

Gold prices are modestly higher in early U.S. trading Thursday, on a technical rebound from the recent selling. Prices have been trading choppy and sideways for the past week, amid a lack of new, bullish fundamental developments. June Comex gold was last up $4.90 an ounce at $1,258.00. July Comex silver was last up $0.093 at $17.21 an ounce.

In overnight news, reports said OPEC oil cartel officials and the Russians have just agreed to extend their current crude oil production cuts by another nine months, but not make deeper cuts in production. The move was expected.

Market watchers are still digesting the Federal Reserve’s FOMC minutes from the early-May meeting, which were released Wednesday afternoon. The minutes were deemed just a bit dovish on U.S. monetary policy and suggested to some that the Fed may not make a move to raise interest rates at the June FOMC meeting. The precious metals are seeing some minor support coming from the minutes. Still, most expect more slight interest rate increases from the Fed this year. The Fed made its last interest rate increase in March.

The key outside markets on Thursday morning find the U.S. dollar index slightly lower. The greenback bears remain in firm near-term technical control. Meantime, Nymex crude oil futures prices are lower on a corrective pullback from recent gains. Crude oil prices have trended solidly higher recently.

U.S. economic data due for release Thursday includes the weekly jobless claims report, leading economic indicators and the Kansas City Fed manufacturing survey.

via Kitco

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza