British economic growth lost steam in the first quarter on the background of unexpected contraction in business investment. The second reading of Britain's first-quarter GDP figures confirmed the loss of momentum in the economic recovery. The Office of National Statistics announced that the economy grew 0.4% in the first quarter, slower than the 0.6% pace in the last three months of 2015, the same as the first estimate given in April. From a year earlier GDP expanded 2%, which was revised down from last month's first reading of 2.1%, the ONS said. Moreover, business investment missed with a fall of 0.5% against 3.2% expected. Also the BBA's mortgage approvals did not meet expectations by sliding to 40.1K against 44.8K predicted. In addition, a separate report showed that out of the four main components on the output side of GDP, production and construction contracted from the previous quarter, while agriculture and services activity increased, according to a breakdown of the first quarter's reading. Production shrank 0.4% and construction fell by 1%, the ONS said. Manufacturing, the largest component within production, dropped 0.4%. Services, which account for a massive 79% of GDP, increased 0.6%, posting a 13th consecutive quarter of growth. The expansion was less than the fourth quarter's 0.8% pace.
The US crude inventories dropped last week, posting the biggest weekly decline in seven weeks, due to the falling import, which forced refiners to cut output. According to the Energy Information Administration, the report showed a 4.2 million-barrel plunge in crude supplies last week, which was a sharper decrease than the 2.5-million fall based on analysts' expectations. The report also showed a surprising rebound in supplies from Canada, as weekly imports reached 3.09 million bpd, from the previous week's 2.59 million bpd, despite Canadian oil sands shutdowns amid a massive wildfire. A series of outages around the world, such as wildfires in Canada and a spate of violence in Nigeria, the oil-producing region, has helped cut global oil supply by nearly 4 million barrels per day this month. This data suggested a bullish sign for oil prices and the US crude oil went up to its highest level in seven months. As a result, the US crude futures hit a high of $49.62 a barrel while Brent crude, in turn, was 65 cents higher at $49.26 after touching $49.69 after the report. Moreover, crude has almost doubled from 12-year lows seen in January on the belief that the market will start to rebalance as supplies of high-cost oil decline and rising consumption by motorists and other oil users reduces a global surplus.
Upcoming fundamentals: Fed's Yellen to speak today
Gold prolongs the slump to eight days
Daily chart: Current eight-day long losing streak of gold prices is the longest one since early November. The bulls have worked hard to revive on Thursday. They managed to send XAU/USD to the 1,234 level, but after facing the weekly S1 there the bullion crashed again the close the daily session as low as 1,219. On Friday morning we are observing more weakness, with the 1,212 marker tested shortly. If the 100-day SMA together with the weekly S2 (1,216.01/47) are out of power to provide sufficient demand on Friday, then we are highly likely to continue seeing gold's drop in the direction of the March low at 1,207.87.Bullish market portion stabilizes at 48%
Spreads (avg,pip) / Trading volume / Volatility
Market participants foresee the price of gold at 1,300 by the end of August
Traders who were asked regarding their longer-term views on gold between April 27 and May 27 expect, on average, to see the metal around 1,300 by the end of August. Generally, 59% (-4%) of participants believe the price will be generally above 1,250 in ninety days. Alongside, 26% (+1%) of those surveyed reckon the price will trade in the range between 1,100 and 1,250 over the next three months.