Profit taking on gold, oil flames

Profit taking on gold, oil flames

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On the foreign exchange market, the dollar index (which measures its values against a basket of 6 reference currencies) finished stable (+0.09%) at 96.22 points, while the euro was unchanged (+ 0.01%) at $1.1366. The dollar had started the session up but lost ground over the hours.

In the bond markets, interest rates rebounded after hitting their lowest levels since October 2016. The yield on the benchmark 10-year T-Bond US government bond returned 6 basis points at 2.05%. In Europe, the rate of the German Bund at 10 years ended Wednesday at -0.30% (+3 bps).

Gold took a few profit taking, yielding 0.4% to $1,412.40 an ounce for the August futures contract on Comex, but it remains close from its high level for almost 6 years, in August 2013.

In contrast, oil prices rebounded sharply after the publication of a stronger than expected decline in oil inventories in the United States. These inventories fell by 12.8 million barrels during the week ended June 21, to 469.6 million barrels, while the consensus forecast a decline of 2.5 mb. The July futures contract on US light crude WTI advanced Wednesday night from 2.58% to $59.38 on the Nymex, while the August Brent crude advanced by 2.21% to $66.49 at the end. Nymex closing time.

Black gold remains supported by the verbal escalation between Iran and the United States, even if the risk of military confrontation seems to be moving away. The Supreme Leader of the Islamic Revolution, Ayatollah Ali Khamenei (targeted by the new US sanctions), said the Iranian people would not give in to US pressure, “cruel sanctions” and “insults”.

Oil investors are also speculating on an extension of the production reduction agreement of the so-called “Opec +” group, which will meet on 1 and 2 July next in Vienna.

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I am a lecturer at the University of Economics in Bratislava, department of Banking and International Finance. I have a Ph.D. academic degree, my dissertation was focused on major markets. Commodities and stock markets are also the main focus of my research and publication activities. I have approximately 10 years of investing experiences. My investments mostly focus on small- to mid-cap companies of energy sector, financial and technology.

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