GOLD & CRUDE OIL TALKING POINTS:
- Gold prices[1] back on the defensive as FOMC[2] meeting nears
- Crude oil prices[3] pop on bets Iran nuclear deal may unravel
- Manufacturing ISM survey, API inventory data due ahead
Gold prices turned lower anew as speculation about a steepening Fed interest rate hike cycle ahead of the upcoming FOMC policy announcement[4] put the US Dollar[5] back on the offensive. That undercut the appeal of non-interest-bearing and anti-fiat assets and made a familiar impression on the yellow metal, pushing it down to touch the lowest level in over a month.
Crude oil prices briefly shot higher after Israeli Prime Minister Binyamin Netanyahu said his country had passed intelligence to the US indicating Iran was secretly developing nuclear weapons in violation of its agreement with the US and a roundup of world powers. Mr Netanyahu’s comments were probably interpreted as signaling that stiff sanctions might be re-imposed, pulling Iranian crude off the market once again.
MANUFACTURING ISM, API INVENTORIES DATA IN FOCUS
Looking ahead, April’s manufacturing ISM survey headlines the economic data docket. It is expected to show that factory-sector activity growth slowed for a second month having set a two-year high in February. US news-flow has firmed relative to forecasts recently, opening the door for an upside surprise. Upbeat cues in analogous Markit Economics PMI statistics bolster the possibility of such an outcome.
A strong showing may stoke bets on a steeper Fed rate hike cycle, adding to the greenback’s gains and punishing gold prices. Crude oil may likewise suffer, brought lower by de-facto selling pressure
