Gold rises on weak dollar, set for third week of gains

Reuters has posted by Gold rises on weak dollar, set for third week of gains Gold rose more than 1 percent on Friday, supported by a softer dollar and cautious interest rate comments by a voting U.S. Federal Reserve policy member, and was headed for a third week of gains.

The U.S. dollar .DXY made its biggest drop against a basket of major currencies in two weeks, making dollar-denominated assets such as gold cheaper for holders of other currencies. [USD/]

Spot gold XAU= was up 1.2 percent at $1,293.80 an ounce at 3:02 p.m. EDT (1902 GMT). Bullion has risen 1.5 percent so far this week.

U.S. gold for August delivery GCcv1 settled down 0.3 percent at $1,294.80 an ounce, well below Thursday's peak of $1,315.55, the highest since August 2014.

"Gold is reverting to its safe-haven role, in a situation where euro zone government bonds are in negative yield territory and investors have fewer safe assets to choose from," Mitsubishi Corp strategist Jonathan Butler said.

St. Louis Fed President James Bullard said the central bank's "dot plot" of projected interest rate policy "appears to be too steep."

"Fed funds futures markets do not seem to believe it. They are priced for a much shallower pace of increases," Bullard said, arguing that the central bank may need to only increase rates once between now and the end of 2018.

Gold is highly sensitive to rising interest rates, which lift the opportunity cost of holding the precious metal.

"His comments were clearly bullish," said Bill O'Neill, co-founder of commodities investment firm Logic Advisors.

"A July rate hike is virtually out of the question. I think gold is looking at that."

Traders said that market dealings could be volatile next week ahead of the June 23 referendum when Britain will vote on whether to remain in the European Union or to leave.

The Bank of England escalated its warnings about fallout from the vote, saying it could harm the global economy and that sterling looked increasingly likely to weaken further if "Leave" wins.

"Over the next week until the British referendum, there could be a further upward move in gold ... as investors will use it as a hedge against various financial risks," Commerzbank analyst Daniel Briesemann said.

Reflecting renewed optimism towards gold, holdings in SPDR Gold Trust (GLD), the world's largest gold-backed exchange-traded fund, rose to 902.53 tonnes on Thursday, the highest since October 2013. [GOL/ETF]

Silver XAG= rose 1.8 percent to $17.44 an ounce after falling 2 percent on Thursday.

Platinum XPT= rose 0.3 percent to $967.50 and palladium XPD= fell 0.3 percent to reach $529.75.

(Additional reporting by Vijaykumar Vedala in Bengaluru; Editing by Meredith Mazzilli)

Gold eyes third weekly gain, but seen volatile ahead of Brexit vote

Reuters has Posted By Gold eyes third weekly gain, but seen volatile ahead of Brexit vote Gold edged up on Friday, supported by a softer dollar, after falling the most in three weeks during a volatile session before that saw bullion scale a near two-year high before surrendering some gains.

The safe-haven asset breached $1,300 an ounce on Thursday and peaked at $1,315.55 - its strongest since August 2014 - before sliding 1 percent following the suspension of campaigning for next week's British referendum on exiting the European Union after a member of Parliament was shot dead.

Spot gold was up 0.5 percent at $1,284.41 an ounce at 0736 GMT. Bullion has risen nearly 1 percent for the week so far.

U.S. gold for August delivery fell 0.8 percent to $1,287.70 an ounce.

"We expect gold will be keenly sensitive to perceived shifts in public opinion ahead of the referendum. This likely leaves gold prices open to highly volatile trading," HSBC analyst James Steel said in a note.

"Shifts in how investors perceive the outcome of the referendum could help define gold's near-term price path."

Gold could get a further boost if a vote by Britain on June 23 to leave the 28-member European Union pushes Europe back into a recession, as investors seek safe-haven assets.

The Bank of England escalated its warnings about fallout from the referendum, saying it could harm the global economy and that sterling looked increasingly likely to weaken further after any "Out" decision.

"Leading into the Brexit vote, we expect gold to remain around current levels between the $1,270-$1,300 range. But after then all bets are off as everything depends on the results of the referendum," ANZ commodity strategist Daniel Hynes said.

"If UK does leave the EU we could see prices touching $1,400 in the immediate aftermath of the referendum," Hynes said.

The dollar slipped versus a basket of major currencies on Friday, making dollar-denominated assets such as gold cheaper for holders of other currencies.

Reflecting renewed optimism towards gold, holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose to 902.53 tonnes on Thursday, the highest since October 2013.

Silver, which slid 2 percent for its biggest one-day fall in about a month on Thursday, rose 1.5 percent to $17.39 and was nearly flat for the week.

Platinum and palladium were headed for a weekly decline despite rising on Friday by 1.7 percent and 2 percent, respectively.

(Reporting by Vijaykumar Vedala in Bengaluru; Editing by Tom Hogue and Manolo Serapio Jr.)

Global oil majors look to shed refineries as crude prices rebound

Reuters has reported by Global oil majors look to shed refineries as crude prices rebound Global oil majors Chevron Corp and Royal Dutch Shell Plc are putting small refineries on the auction block as they look to trim lower-margin assets in the face of headwinds from rising crude oil prices.

Chevron, the second largest U.S. oil company, is soliciting interest in its Burnaby, British Columbia, refinery and gasoline stations, the company told Reuters. Shell is looking for buyers for its Martinez, California, refinery, two people familiar with the situation told Reuters. Shell declined to comment.

These two companies, along with peers Exxon Mobil Corp and BP Plc, have sold more than a million barrels per day of U.S. refining capacity in the past three years, according to Stratas Advisors, a Houston-based consultancy.

The world's five largest oil majors together still have enough U.S. capacity to refine about 4.7 million barrels per day.

Refining profit margins have declined from highs seen in 2015, and the fear is that as crude prices recover from a two-year rout, refiners will be squeezed as the cost of oil rises but the price of gasoline does not keep pace. Selling the plants while margins are still reasonably high allows the majors to exit without a hit to their balance sheets.

Chevron also told Reuters it has retained Rothschild & Co to market its 75 percent stake in a South Africa refinery. The fifth oil major, Paris-based Total SA, retained Lazard to sell a 50 percent stake in its sole U.S. refinery, but was unable to secure the price it desired, according to sources.

Refining has remained a profitable sector during a two-year oil price rout, so these plants can fetch a relatively higher price than exploration and production assets. Chevron and Shell have the highest cash-flow deficits, said Lysle Brinker, director of equity research at IHS Energy, and so have the most motivation to sell.

The two companies have been investing in other areas of their business - Shell plunked down $53 billion to buy BG Group earlier this year, while Chevron has spent heavily on large-scale liquefied natural gas projects.

“They’re much more strapped for cash, and they’re accelerating the sale of assets that will get pretty decent prices," said Brinker. "A lot of the asset sales that the big guys have been selling are downstream and midstream, because those have been sought-after by private equity and others because there’s more steady cash flow.”

These assets may prove to be a better fit for smaller buyers that focus on particular regions, such as the North American West Coast, or companies that concentrate on global storage and trading, but not oil production.

SMALLER ASSETS ON BLOCK

While the majors plan to continue to operate large, profitable refineries that are well integrated with their oil production assets, refineries outside of that footprint are likely to be sold, Brinker said.

Chevron's downstream strategy has focused on running large scale refineries that can serve markets in the United States and Asia and on operating petrochemical plants that produce very profitable products.

The refinery in British Columbia, however, refines light oil, rather than heavy crude from Canada's oil sands, and its products are distributed in a smaller region around British Columbia and down through Washington state.

Selling smaller assets like that is likely something most companies are looking at - or should be - said Mark Routt, chief economist for the Americas with KBC Advanced Technologies in Houston.

"Far better to sell it when it's good times than bad times," Routt said. "It's not as good as it was in '15, but it’s still good times."

Chevron in April agreed to sell its 54,000 barrel-per-day Kapolei, Hawaii, refinery to a group backed by private equity, and Shell agreed in March to exit its Motiva Enterprises joint venture with Saudi Aramco. Shell is shedding a plant in Texas as a result of the dissolution of that venture.

Chevron previously said it would sell its 75 percent stake in its South African unit, which includes a refinery in Cape Town.

(Reporting By Jessica Resnick-Ault in New York; Additional reporting by Ron Bousso in London; Editing by Bill Rigby)

Oil futures fall as global growth, Brexit concerns weigh

Reuters has posted By Oil futures fall as global growth, Brexit concerns weigh Crude oil futures fell in Asian trade on Tuesday, as investors ignored signs of market tightness to focus on concerns over global growth and overnight declines in stocks on the impending vote on Britain's possible European Union exit.
Brent crude oil futures slipped below $50 a barrel, falling 41 cents to $49.94 by 0643 GMT, dropping for a fourth successive day.
U.S. crude was down 46 cents, or nearly 1 percent, at $48.42 a barrel, also down for a fourth day in a row.
A stronger dollar overnight spilled into the oil market, while markets eyed recent polls showing Britain's "Leave" campaign in the lead ahead of a referendum on membership of the European Union.
"The risk-off mood that has been pervasive in the markets in the last few days has taken hold of oil prices, with weakness in Asian markets and a strong dollar contributing to Brent crude dripping back below $50 per barrel," said Mihir Kapadia, CEO at Sun Global Investments, which has assets under management totalling $500 million.
"There are some that think that the recent recovery in prices is due to temporary supply issues and not to do with any strengthening demand on the back of a robust global economy," Kapadia said.
A vote by Britain to leave the European Union, dubbed "Brexit," may tip Europe back into recession, putting more pressure on the global economy.
Britain's "Out" campaign has increased its lead over the "In" camp before the June 23 referendum, according to two opinion polls published by ICM on Monday.
Concerns about Chinese growth are also weighing on sentiment, enough to set aside bullish signs such as a U.S. government forecast on Monday that shale oil output is expected to fall in July for the seventh consecutive month.
OPEC also forecast on Monday that the world oil market would be more balanced in the second half of 2016 as outages in Nigeria and Canada help to speed up the erosion of a supply glut.
(Reporting by Henning Gloystein and Aaron Sheldrick; Editing by Richard Pullin and Anupama Dwivedi)

Gold dips, but lingers near four-week high ahead of Fed meeting

Reuters has Posted by Gold dips, but lingers near four-week high ahead of Fed meeting Gold inched down on Tuesday as investors waited for cues from a two-day U.S. Federal Reserve meeting beginning later in the day and a June 23 referendum that will decide whether Britain will exit the European Union.
Spot gold was down 0.4 percent at $1,279.16 an ounce as of 0648 GMT, but has gained more than 5 percent this month, hitting a peak of $1,287 on Monday, its highest since May 16.
U.S. gold fell 0.4 percent to $1,282.30.
"I think investors have decided to take profits and some of them are staying on the sidelines before taking a decision on what to do next until the Fed makes an announcement," said Brian Lan, managing director at Singapore-based gold dealer GoldSilver Central.
Bullion, which is often perceived as a hedge against economic and financial uncertainty, has been driven by rising investor risk aversion before key central bank meetings this week.
Apart from the Fed, the Bank of England, Swiss National Bank and the Bank of Japan will meet this week, and are expected to hold monetary policies steady against a backdrop of caution about the global economic outlook.
The safe-haven appeal of gold, which is near a four-week high hit in the previous session, could get a further boost if a vote by Britain to leave the 28-member group, dubbed "Brexit," pushes Europe back into a recession.
The British pound remained fragile near a two-month low against the dollar, while Asian stocks slipped on Tuesday on concerns ahead of the referendum.
Britain's "Out" campaign widened its lead over the "In" camp ahead of the referendum, according to two opinion polls published by ICM on Monday.
"We think that the risk of Britain leaving has now increased substantially and the Fed will therefore signal its willingness in no uncertain terms to 'stay the course' in light of this potential 'Black Swan' event," INTL FCStone analyst Edward Meir said in a note.
"This will likely enable gold to push even higher over the next few days, at least until the polls start to swing the other way."
Meanwhile, Hong Kong Exchanges and Clearing Ltd is aiming to launch its planned physically-delivered gold futures contract in September, its head said on Tuesday.
Holdings in SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, rose 0.27 percent to 896.30 tonnes on Monday, the highest since October 2013.
Spot silver fell 0.8 percent to $17.29 per ounce, after touching a one-month high of $17.45 on Monday.
(Additional reporting by Vijaykumar Vedala in Bengaluru; Editing by Subhranshu Sahu and Biju Dwarakanath)

Gold hits four-week high as cenbank meets, Brexit vote shake stocks

Reuters has posted by Gold hits four-week high as cenbank meets, Brexit vote shake stocks Gold hit its highest since mid-May on Monday, driven higher by a retreat of the dollar and as stocks were knocked by rising risk aversion before key central bank meetings this week and a June 23 vote on whether Britain should leave the European Union.

The pound fell to a two-month low against the dollar, pushing gold denominated in sterling to its highest in nearly three years at 909.83 pounds an ounce, up 1.9 percent.

Spot gold was up 0.8 percent at $1,283.66 an ounce at 0940 GMT, off an earlier peak of $1,284.50. U.S. gold futures for August delivery were up $11.10 an ounce at $1,287.00.

Fading expectations for a Federal Reserve rate hike have driven prices sharply higher so far this month. Gold has rallied 6 percent since U.S. payrolls data for May came in weaker than expected on June 3, crushing expectations for an interest rate hike over the summer.

"Following the labour market report a Fed rate hike has been priced out for June and July, and at the same time it seems as if odds for the UK to leave the European Union have come back up again," Danske Bank analyst Jens Pedersen said.

"Those two factors are benefiting gold."

Fears Britain is on the verge of voting to leave the European Union next week spread through global financial markets on Monday, sending Asian and European shares sharply lower. The dollar fell 0.2 percent against the euro. [MKTS/GLOB]

The Fed, Bank of England, Swiss National Bank and Bank of Japan will all meet this week, and are expected to hold monetary policy steady against a backdrop of caution about the global economic outlook as well as the impact of a possible Brexit.

"The UK referendum on EU membership has implications across many asset classes but gold, as the ultimate barometer of financial and economic tension, is currently the asset class showing one of the highest levels of sensitivity to the possible range of outcomes," Citi said in a note on Monday.

"Gold has fluctuated in line with the Brexit opinion polls, even dislocating it from its usual primary-link with the U.S. dollar."

Holdings in the world's largest gold-backed exchange-traded fund, SPDR Gold Shares, rose 0.74 percent to 893.92 tonnes on Friday, the highest since October 2013.

Among other precious metals, silver was flat at $17.31 an ounce, while platinum was up 0.5 percent at $995.22 an ounce and palladium was 0.7 percent higher at $546.79 per ounce.

(Additional reporting by Vijaykumar Vedala in BENGALURU; editing by Adrian Croft)