Oil Futures Drop on US Supply Data
Oil Futures rose on Chinese economic data Getty

An improvement in China's economic outlook supported oil prices on Friday (15 July), while precious metals continued to reel in the wake of the Bank of England's decision to hold interest rates and a general uptick in the equities market.

At 2:02pm BST, the Brent front month futures contract was up 0.87% or ¢41 to $47.78 per barrel, while the West Texas Intermediate was 0.85% or ¢39 higher at $46.07 per barrel.

China's gross domestic product (GDP) expanded 6.7% year-on-year in the April to June period, the same pace of growth recorded in the previous quarter. Analysts had forecast the world's second largest economy to expand 6.6%.

The figure falls within Beijing's growth target of 6.5% to 7% for 2016. China's National Bureau of Statistics said the economy had achieved "moderate and steady development" amid "complicated" domestic and external conditions.

FXTM research analyst Lukman Otunuga said: "Sentiment towards the Chinese economy has displayed signs of improvement. The nation's ongoing quest for economic stability seems to be bearing fruit, with an array of stimulus measures from Beijing and central bank intervention stimulating domestic growth."

"With easing deflationary pressures, subsiding capital outflows and improving factory conditions creating a path to economic recovery, China may be able to respect future growth targets."

Meanwhile, precious metals headed lower across the board for a second successive session. At 2:17pm BST, the Comex gold futures contract for August delivery was down 0.89% or $11.82 to $1,323.41 an ounce, while Comex silver headed 0.40% or ¢8 lower to $20.24 an ounce. Spot platinum was 1.33% or $14.70 lower at $1,088.45 an ounce.

Liz Grant, senior account executive at Sucden Financial, said there was bearish news for gold all around. "The Bank of England left interest rates unchanged having been widely expected to announce a cut; this is now more likely to happen in August. Meanwhile, major equity indices continued to march higher on stimulus bets.

"Inevitably, gold prices lost more ground as safe haven demand wanes and investors move back to riskier assets," Otunuga said.