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Oil prices, which rose again on Monday after a slight pull back at the end of last week have again dipped as traders play cat and mouse with the recent upward trajectory. With crude futures having risen to beyond $52 yesterday evening during U.S. markets trading, U.S. crude reached $52.42 at an interday peak, it was down 0.83% from Monday’s close in London this morning. The price was $51.35 at just after 09:00 am. It’s expected that oil prices will ebb and flow between $51 and $53 a barrel until markets see evidence that the recent OPEC agreement to cut production by 1.2 million barrels per day will be adhered to by members. The organization has no actual power to enforce agreements, which rely on the cooperation of member nations.
Another key factor that markets are waiting for clarification on before deciding whether prices can move up towards $55 and beyond is if major oil producing non-OPEC members will ally with the decision to cut production. Russia, currently the world’s biggest oil producer, has agreed to cut production by 300,000 barrels a day but on November levels, which were at a record high for the past 30 years at 11.21 million barrels a day. Russia also has a history of reneging on such agreements, either publically or through suspected discrepancies between actual and stated production levels.
Gold prices continued to slip yesterday as the expected Fed interest rate hike approaches mid-December and income-earning equities and other assets perform well. On Monday, gold for February delivery dropped 0.1% with contracts changing hands for $1,176.50 an ounce. Spot gold prices fell in London yesterday, down 0.6% to $1,169.75 an ounce, though have risen fractionally this morning to $1,170.25.
In base metals, the complex finished Monday an average of 2.1% for 3-month delivery, though gains have been paired back by 0.6% so far this morning. Zinc (+4.1%), lead (+3.3%) and copper (+2.4%) lead the charge yesterday. Early this morning zinc had fallen back by 0.6%, lead 1.4% and copper 0.4%.
Where do you see gold going in the new year