Crude Oil
Crude oil prices dipped in early Asian trade on Monday, but remains supported as investors continue watching developments in the Ukraine-Russia conflict amid concerns over a disruption to supplies. Investors continued to monitor events in Ukraine, where tension over moves by neighboring Russia in the Crimean region have underpinned prices. The political standoff between the West and Russia following the annexation of Crimea escalated after the U.S. imposed harsher sanctions on Moscow. The European Union also agreed to wider sanctions against Russia. Meanwhile, the Federal Reserve reduced its monthly bond purchases by an additional $10 billion to $55 billion at the conclusion of its two-day policy meeting on Wednesday, citing “underlying strength in the broader economy.” Fed Chairwoman Janet Yellen indicated that the central bank could begin to raise interest rates about six months after its bond-buying program winds up, which is expected to happen this fall. The comments prompted investors to bring forward expectations for a rate hike to as soon as March of next year.
Gold
Gold ended Friday’s session mildly higher, but still posted the worst weekly loss in four months following the Federal Reserve’s decision to taper its monthly bond-buying program by $10 billion for the third consecutive meeting and amid indications a rate hike from the central bank could come sooner than expected. Gold sold off and the U.S. dollar rallied after Fed Chair Janet Yellen indicated on Wednesday that the central bank could begin to raise interest rates about six months after its bond-buying program winds up, which is expected to happen this fall. The comments prompted investors to bring forward expectations for a rate hike to as soon as March of next year. Meanwhile, investors continued to monitor events in Ukraine, where tension over moves by neighboring Russia in the Crimean region have heightened demand for safe haven assets. The political standoff between the West and Russia following the annexation of Crimea escalated after the U.S. imposed harsher sanctions on Moscow. The European Union also agreed to wider sanctions against Russia.
