As market sentiment is closely tied to the debt negotiation between the White House and the Republicans, gold price remains resilient after rising to a new record high of 1625.8 earlier in the day. Following gold coattail, others in the precious metal complex have also strengthened recently despite their industrial metal characteristics. Silver rose to a 3-month high of 41.24 as investors fled to 'the poor's gold'. PGMs also rallied with platinum as high as 1819, the highest since June 13 and palladium rising to 845, the highest level since February 22.

The near-term outlook of oil prices is weaker with prices moving with a soft tone within confined trading ranges. The major event that may move the market today will be the US inventory report. However, an industry report showed some bad signs.

The American Petroleum Institute reported that crude inventory rose +3.96 mmb to 358.2 mmb in the week ended July 22. This was the biggest increase in 3 months. For fuels, gasoline stockpile dropped -0.64 mmb while distillate rose +2.90 mmb. The market forecasts, crude inventory probably drew around -2 mmb while gasoline and distillate stockpiles climbed +0.40 mmb and +1.63 mmb respectively.

US' durable goods orders probably grew +0.3% m/m in June, slowing from +1.9% a month ago. The reading excluding transportation should have risen +0.5%, moderating from +0.6% in May. In Asia session, Australia reported that headline CPI eased to +0.9% q/q% in 2Q11 from +1.6% a quarter. The moderation was not as much as expected. On annual basis, inflation rose to +3.6%, up from +3.3% in 1Q11. Elevated price levels should trigger the RBA to resume tightening later this year.

Weekly change in inventory as of 22/07/10 ChangeConsensusPrevious
Crude oil  -2.00 mmb-3.73 mmb
Gasoline  +0.40 mmb+0.76 mmb
Distillate  +1.63 mmb+3.43 mmb

Comparison between API and EIA reports:

API (Ju1 22) EIA (Ju1 22)
ActualInventoryPreviousForecast (using API's inventory level)Inventory
Crude oil+3.96 mmb358 mmb-5.18 mmb

+6.47 mmb

358 mmb
Gasoline-0.64 mmb210 mmb+1.96 mmb

-2.79 mmb

210 mmb
Distillate+2.90 mmb149 mmb+1.10 mmb+0.86 mmb149 mmb

API collects stockpile information on a voluntary basis from operators of refineries. Data from the API and DOE have moved in the same direction 71% of the time over the past 52 weeks

Source: Bloomberg, API, EIA