Oil rallies amid drop in rigs; Gold dips on stronger dollar
Gold closes in on US$1,200/oz: Gold initially dipped on Friday and rallied into the close to US$1,234/oz. Prices have since fallen as the US dollar has rallied along with equity markets. Support over the past two weeks in the yellow metal has come from inflow into ETFs and hedge funds and money managers who have increased bet on Gold. Concerns about the global economy and a possible delay in US interest rate increases have been the primary triggers.
Oil higher on rig count data: Oil prices fell 4% on Friday but have since rallied as participants focus on the US rig count report, which showed a drop of 26 rigs. According to Goldman Sachs, the total drop in rigs implies that annual US production would drop by another 445,000bbl/day in 2016. While this data is supportive, many analysts believe that record inventories and weak demand will likely keep a lid on prices.