Oil And Gold Analysis: May 10, 2013

West Texas Intermediate crude fell as the dollar strengthened against the euro, after the number of Americans filing jobless claims decreased to the lowest level in over five years. Prices dropped as much as 1 percent as the dollar extended gains on Labor Department data that applications for unemployment benefits unexpectedly slid. Crude stockpiles were the most since 1931 last week, the Energy Information Administration said Wednesday. Crude inventories increased 230,000 barrels to 395.5 million barrels in the seven days ended of May 3, rising for a third week, the EIA, the Energy Department’s statistical arm, reported. Stocks of distillate fuels, including heating oil and diesel, jumped 1.6 percent to 117.6 million.

GOLD
The yellow metal tumbled yesterday after U.S. unemployment claims dropped to its lowest level in nearly five and a half year. Gold declined to $1,453 an ounce yesterday after jobless claims dropped 4,000 to 323,000 during the week ended May 4, the lowest level since January 2008 adding more signs of a healing labor market. Analyst had predicted claims to climb to 333,000. Last week, the U.S. Non-Farm Payroll added 165,000 jobs in April, enough to push the unemployment rate down to 7.5 percent. So far this year, job gains average 196,000 per month, substantially higher than 181,000 averages in 2012, data from Reuters revealed. The U.S. Federal Reserve is determined to do what’s necessary to bring down the unemployment rate to a healthy level, and it seems things are heading in the right direction.


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