Oil And Gold Analysis: Oil Futures Hit Two-Week High

CL
New York-traded crude oil futures hit a two-week high on Friday, amid expectations the U.S. economic recovery will continue to deepen going into this year. Crude oil futures - weekly outlook: January 20 - 24 Nymex oil prices settle at 2-week high on Friday Nymex oil prices rallied sharply on Wednesday after government data showed that U.S. oil supplies fell significantly more-than-expected last week, easing concerns over a slowdown in demand from the world’s largest oil consumer. The U.S. Energy Information Administration said in its weekly report that U.S. crude oil inventories fell by 7.7 million barrels in the week ended January 10, compared to expectations for a decline of 0.6 million barrels. Total U.S. crude oil inventories stood at 350.2 million barrels as of last week, the lowest since March 2012. The CFTC Commitments of Traders report for the week ending January 14 showed that gross long oil positions fell by 7,066 contracts to 284,307, while gross short positions increased by 10,389 lots to 54,585. Net longs totaled 229,722 contracts, compared to 247,177 in the preceding week.


GOLD
Gold futures ended the week higher on Friday, as traders continued to speculate over for how quickly the Federal Reserve will roll back its stimulus program. Investors continued to watch U.S. data points for clues on the future course of monetary policy and to help assess the timing for a further reduction in the Fed’s bond purchasing program. U.S. housing starts fell 9.8% last month, more than the 8.3% decline forecast by analysts. U.S. building permits rose less-than-expected in December, but remained close to November’s five year highs. Separate reports showed that U.S. industrial production rose 0.3% in December, increasing for the fifth consecutive month, while consumer sentiment declined in January. The Fed is scheduled to meet January 28-29 to review the economy and assess policy. Expectations of monetary stimulus tend to benefit gold, as the precious metal is seen as a safe store of value and inflation hedge.