This week started with the talk of the United States banning Russian oil exports, so XBR/USD saw $130 a barrel. Then the ban became reality. What does it really mean for the market?
Gold ascends on Brexit jitters
On Tuesday, gold rallied because uncertainty over the latest developments in Britain’s departure from the EU backed safe haven demand and traders looked ahead for American inflation data to underpin the Fed’s pledge to remain on hold.
On the Comex exchange, April delivery gold futures went up by 0.41% concluding the trading session at $1,296.35 a troy ounce.
Many experts are assured that Theresa May will fail to achieve the votes required to underpin her withdrawal pact.
If UK lawmakers reject May's agreement, she has pledged a vote on Wednesday on whether to depart from the EU without a deal and, if they vote down it, then there will be a vote for a limited delay to Brexit.
On Tuesday, the uncertainty stimulated demand for the yellow metal even as volatility reigned in the Forex market.
As markets closely watch developments, traders will wait for American inflation data expected to show up at 8:30 AM ET.
Market experts actually expect American consumer prices to match February’s surge, underlining the case for the US major financial institution to stick with its current wait-and-see stance.
Financial markets were still skeptical that the Federal Reserve could proceed with its rate lift in 2019, especially after the employment report revealed poor job creation in February. By the way, Fed fund futures exclude such a move and place the likelihood at above 10% that the next move would be a cut.
Apparently, the pause in policy tightening is beneficial for the yellow metal because it decreases the opportunity cost of holding non-yielding bullion.
In addition to this, silver futures managed to rally by about 0.97% hitting $15.4223 a troy ounce.
Palladium surged by 1.28% showing $1,500.90.
As for copper, this metal inched up by up to 1.10% ending up with $2.933 a pound.
For a long time, traders considered American Non-farm Payrolls (NFP) the most important release in the market. However, the situation has changed. Now US CPI moves financial markets.
United States Bureau of Labor Statistics will release monthly average hourly earnings, non-farm employment change (NFP), and unemployment rate on November 5, 14:30 GMT+2.
The Australian Bureau of Statistics will announce the updated Unemployment Rate and Employment Change data on Thursday, May 19, at 04:30 MT.
The UK Office for National Statistics will publish Consumer Price Index (CPI) data on Wednesday, May 18, at 09:00 MT.
The US Census Bureau will announce Core Retail Sales and Retail Sales on Tuesday, May 17 at 15:30 MT.