Leaks with oil and yellow metal | Calamatta Cuschieri

On Thursday European markets closed mixed following the NATO meeting in Brussels attended by the US President Donald Trump and digested the news that OPEC agreed to extend the oil output.

Trump stated that NATO “must finally contribute their fair share” noting that the US spends more on defence within the organisation which would not be fair towards taxpayers in the US.

In the UK, the police stated they would stop sharing information with the US because of the leaks, which revealed the identity of the Manchester suicide bomber just hours after the incident. British officials were outraged with the leaked identity, along with photos appearing to show debris. The British Prime Minister Theresa May confronted the US President Trump regarding the disclosure of this information against Britain’s wishes.

Meanwhile, Trump condemned the US media leaks regarding the terror attack in Manchester. The president asked the Department of Justice for “complete review” on leaks from the country’s government agencies. Trump called the leaks “deeply troubling” and insisted, "The culprit should be prosecuted to the fullest extent of the law".

Oily corner

The OPEC and other major oil producers led by Russia renewed the agreement to withhold some oil supplies for another nine months until March 2018, but not make deeper cuts in production. This means that oil prices may rise despite the soaring output from American shale producers. The agreement is likely to around 2% of the world’s supply considering that over a dozen other countries intend to join the cartel’s efforts.

However, the market was not of the same opinion, with West Texas Intermediate dropping around 3% while Brent traded over 2.5% lower. The new extension seems to have disconcerted the market as many investors hoped the extension would be carried on for a longer period.

The yellow metal

Today gold initially edged slightly lower, but still holding above the $1,250 mark. Prices have been trading choppy and sideways for the past week, amid a lack of new, bullish fundamental developments. 

However, investment incentives in the yellow matter gained momentum, as the US dollar grew weaker after yesterday’s Federal Reserve (FED) minutes agreed on tighter monetary policies to be implemented sooner. The FED showed a more cautious approach towards further interest rate hikes, making a rate- sensitive investment such as gold more appealing to investors. The FED made its last interest rate increase in March. Spot Gold shed 0.20% at one point, changing hands for $1,256.18 per ounce.

Disclaimer:

This article was issued by Rodrick Duca, Trader at Calamatta Cuschieri. For more information visit, www.cc.com.mt. The information, view and opinions provided in this article is being provided solely for educational and informational purposes and should not be construed as investment advice, advice concerning particular investments or investment decisions, or tax or legal advice. Calamatta Cuschieri Investment Services Ltd has not verified and consequently neither warrants the accuracy nor the veracity of any information, views or opinions appearing on this website.