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Jan 24 – Gold eased on Wednesday after data showed strong US business activity, even as a weakened dollar limited losses, while investors looked ahead to more economic indicators to assess when the Federal Reserve might first cut interest rates.

Spot gold was down 0.7% at USD 2,014.56 per ounce at 2:13 p.m. ET (1913 GMT), eyeing its worst session in a week. US gold futures settled 0.5% lower at USD 2,016.00.

“Gold prices are pretty insulated from a hawkish repricing in rates markets, because there are signs that investors are historically under-positioned in gold despite markets expecting an imminent start to the Fed’s cutting cycle,” said Daniel Ghali, commodity strategist at TD Securities.

US business activity picked up in January and inflation appeared to abate, an S&P Global survey showed.

A strong US economy and pushback from central bank officials is leading some investors to rethink their bets on how quickly the Fed will cut rates this year.

Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

According to the CME’s FedWatch Tool, markets expect the Fed to keep interest rates unchanged at its Jan. 30-31 policy meeting and have pushed back the timeframe of the first interest rate cut.

The dollar slipped 0.4% against its rivals, making greenback-priced bullion cheaper for overseas buyers.

“China is putting together a more comprehensive package to stem the pervasively pessimistic sentiment that has plagued their markets for months which is weighing on the broad US dollar,” Ghali added.

China’s central bank announced a deep cut to bank reserves that will inject about USD 140 billion of cash into the banking system.

Investors are now focusing on the fourth-quarter advance US GDP estimates on Thursday, and personal consumption expenditure data on Friday.

Spot silver rose 1.2% to USD 22.7 per ounce, platinum was up 0.23% to USD 902.18 and palladium rose 1.65% to USD 963.59.

(Reporting by Anushree Mukherjee and Deep Vakil in Bengaluru; Additional reporting by Daksh Grover; Editing by Mark Potter, Shweta Agarwal, and Krishna Chandra Eluri)

NEW YORK, Jan 24 – Oil prices edged up about 1% on Wednesday on a bigger-than-expected US crude storage withdrawal, a slump in US crude output, Chinese economic stimulus, geopolitical tensions, and a weaker dollar.

Brent crude futures rose 49 cents, or 0.6%, to settle at USD 80.04 a barrel, while US West Texas Intermediate crude (WTI) ended 72 cents, or 1.0%, at USD 75.09.

China’s central bank will cut the amount of cash that banks must hold as reserves from Feb. 5, a move expected to shore up a fragile economic recovery.

US crude stockpiles tumbled by 9.2 million barrels last week, the Energy Information Administration said, more than quadruple the 2.2 million-barrel draw analysts forecast in a Reuters poll.

“It’s a weather report all-around … Nobody was driving (last week). One big number is domestic production was down, and Bakken production took a big hit,” said Bob Yawger, director of energy futures at Mizuho, a bank.

US crude output fell from a record-tying 13.3 million barrels per day (bpd) two weeks ago to a five-month low of 12.3 bpd last week after oil wells froze during an Arctic freeze.

North Dakota officials have said it could take a month for oil output in the state, which includes the Bakken shale field and is the third biggest oil producing state, to recover after last week’s extreme weather cut production by more than half.

Geopolitical tensions remained in focus the day after a coalition of 24 nations led by the US and Britain conducted new strikes against Houthi fighters in Yemen who have been attacking global trade.

The US said Iran-backed Houthis have mounted 26 attacks since late November on commercial shipping in the Red Sea which was used by about 12% of global oil trade before the attacks.

The US also carried out strikes against Iran-linked militia in Iraq on Tuesday, after an attack on an Iraqi air base wounded US forces.

“Geopolitical risk and the threat of delays and disruption are causing some alarm but that’s not being particularly reflected in the price at this stage,” said Craig Erlam, senior market analyst UK & EMEA, at data and analytics firm OANDA.

Elsewhere, tank shells hit a UN training center sheltering tens of thousands of displaced people in the southern Gaza city of Khan Younis, killing at least nine people and wounding 75, as Israeli forces advanced there.

The US dollar, meanwhile, fell to a one-week low against a basket of other currencies. Analysts at energy advisory Ritterbusch and Associates said the weaker dollar was lending some “bullish momentum” to oil prices.

A weaker dollar makes crude cheaper for buyers using other currencies.

(Reporting by Scott DiSavino, Laila Kearney, Ahmad Ghaddar, Noah Browning, Colleen Howe, and Muyu Xu; Editing by Marguerita Choy and David Gregorio)

Jan 24 – Investor sentiment towards China has picked up following a report that Beijing is considering a hefty package to support its ailing markets, and Wednesday’s trading activity will give some insight into whether it will be fleeting or something more lasting.

Elsewhere in the Asia & Pacific region on Wednesday New Zealand inflation, purchasing managers index reports from Australia and Japan, and a monetary policy decision in Malaysia all have market-moving potential.

The broader mood music, however, will probably be set by the S&P 500’s third consecutive record closing high, and by how Chinese and Hong Kong markets trade.

The performance of Chinese stocks on Tuesday was not particularly strong – Hong Kong stocks rallied much harder – but any rebound has to start somewhere.

Authorities and China bulls will be hoping this has legs. And it might if policymakers can mobilize about 2 trillion yuan (USD 278 billion), mainly from offshore accounts of state-owned enterprises, as part of a stabilization fund to buy shares onshore through the Hong Kong exchange link.

By some measures, these markets are attractive. Valuations are cheap, indexes are the lowest in years, and if authorities can put a floor in, then a fair bit of the capital that has fled China and Honk Kong lately could be tempted back.

Perhaps.

The CSI 300 index’s rise of 0.4% and the Shanghai Composite’s rise of 0.5% on Tuesday were not big by most measures. But they were the biggest rise in almost a month, and enough to lift the indexes up from five- and four-year troughs, respectively.

In Hong Kong, the benchmark Hang Seng and Hang Seng tech index jumped 2.7% and 3.7%, respectively, for their best days in two months, but they too are coming from low bases.

The Hang Seng is flirting with the levels it was at when Hong Kong returned to China from Britain in 1997. Before Tuesday’s spike, Hong Kong tech stocks were down 20% this month.

Japan’s equity bull run took a breather on Tuesday after the Bank of Japan stood pat at its policy meeting but appeared to err on the hawkish side, while the yen eventually gave back its initial gains and drifted down to 148.50 per dollar.

There was something for everyone, however, in Governor Kazuo Ueda’s comments, as he noted that inflation seems to be heading back toward the bank’s 2% target in a sustainable manner. If this narrative prevails, expect the Nikkei to resume its upswing and the yen and bond yields to remain under pressure.

Meanwhile, Bank Negara Malaysia is widely expected to leave its overnight policy rate unchanged at 3.00% on Wednesday and hold it there until at least the end of next year.

Here are key developments that could provide more direction to markets on Wednesday:

– Australia PMIs (January)

– Japan PMIs (January)

– Malaysia interest rate decision

(By Jamie McGeever; Editing by Bill Berkrot)

Jan 23 – Gold prices inched higher on Tuesday, as investors awaited a slew of US economic data this week for more cues to the Federal Reserve’s timeline for interest rate cuts.

Spot gold was up 0.2% to USD 2,025.09 per ounce by 2:00 p.m. ET (1900 GMT).

Gold futures settled 0.2% higher at USD 2025.8.

“The gold market is just above the USD 2,000 mark and it seems to be a neutral market. Every time we start to break higher, we come back down,” said Daniel Pavilonis, senior market strategist at RJO Futures.

“There is a lot of uncertainty on what is going to happen here economically in the United States.”

Focus this week will be on the US flash PMI report on Wednesday, fourth-quarter advance GDP estimates due on Thursday, and personal consumption expenditures data on Friday.

Fed officials last week said the US central bank needs more inflation data in hand before any rate cut judgment could be made and that the baseline for cuts to start was in the third quarter.

Markets are pricing in the US central bank to hold rates unchanged at the end of the policy meeting on Jan. 30-31 and have pared back the timing of the first interest rate cut, according to CME’s FedWatch Tool.

Recent rebounds (in gold) appear to be getting shallower, which raises the prospect of further weakness if central banks continue to push back on market expectations of rate cuts, Michael Hewson, chief market analyst at CMC Markets, wrote in a note.

Lower interest rates decrease the opportunity cost of holding bullion.

Meanwhile, the European Central Bank meets on Thursday and is expected to hold monetary policy steady.

On the physical front, India increased the import duty on gold and silver findings, used in making jewellery.

Spot silver rose 1.2% to USD 22.35 per ounce, platinum climbed 0.7% to USD 898.41 and palladium gained 0.9% to USD 944.42.

(Reporting by Anushree Mukherjee in Bengaluru; Editing by Shweta Agarwal, Tasim Zahid, and Krishna Chandra Eluri)

NEW YORK, Jan 23 – Oil prices settled lower on Tuesday as traders focused on rebounding crude output in parts of the US, along with rising supply in Libya and Norway, rather than risks to supply posed by conflict in Europe and the Middle East.

Brent crude settled at USD 79.55 a barrel, losing 51 cents, or 0.6%. US West Texas Intermediate crude settled at USD 74.37 a barrel, shedding 39 cents, or 0.5%.

In North Dakota, the third-largest oil-producing US state, some oil output came back online after shutting because of extreme cold, the state’s pipeline authority said. However, output was still down as much as 300,000 bpd.

Persistent weakness in US gasoline demand has also hit oil prices, said John Kilduff, partner at Again Capital LLC.

While US crude stocks dropped by 6.67 million barrels last week, gasoline inventories jumped by 7.2 million barrels, according to market sources citing American Petroleum Institute figures. Official US government data is due on Wednesday.

Rising production elsewhere further pressured prices.

Norway’s crude production rose to 1.85 million barrels per day (bpd) in December, up from 1.81 million bpd the previous month and beating analysts’ forecasts of 1.81 million bpd, according to the Norwegian Offshore Directorate (NOD).

In Libya, production at the 300,000 bpd Sharara oilfield restarted on Jan. 21 after the end of protests that had halted output since early this month.

Geopolitical uncertainty limited losses.

“You’ve got the geopolitical pressures that aren’t enough to really rally the oil market, but they’re enough to keep the market from bottoming out of the range,” said Bob Yawger, director of energy futures at Mizuho Bank.

Crude prices rose by around 2% on Monday after a Ukrainian drone strike on Novatek’s Ust-Luga Baltic fuel export terminal near Russia’s second city St Petersburg raised supply concerns.

In the Middle East, tensions rose after US and British forces carried out a second joint round of strikes on Houthi positions in Yemen.

(Additional reporting by Robert Harvey and Noah Browning in London, and Emily Chow and Trixie Yapp in Singapore; Editing by Kevin Liffey, David Gregorio, Christina Fincher, and Deepa Babington)

Jan 23 – The Bank of Japan’s policy decision – and perhaps more importantly, Governor Kazuo Ueda’s press conference – is the main focus for Asian markets on Tuesday, as the deepening slump in Chinese and Hong Kong markets continues to unnerve investors.

While sentiment toward China’s economy and markets is clearly deteriorating, the spillover to the rest of Asia may be contained to a certain extent by the more upbeat mood globally.

The S&P 500 on Monday hit a fresh record high for a second consecutive day while Japan’s Nikkei 225 registered another 34-year peak. This helped limit the downside in Asia on Monday, and the MSCI Asia ex-Japan index slipped 0.6%.

The BOJ is not expected to alter policy, so the statement and Ueda’s guidance will be intensely scrutinized for signals of when and how the ‘normalization’ process and eventual move away from negative interest rates will unfold this year.

Recent inflation data has been soft, taking pressure off the BOJ to act. With inflation seemingly gliding back toward the BOJ’s 2% target, traders are adjusting their rate expectations and Japanese assets are reacting accordingly.

Stocks are up almost 10% this month, the yen is sliding back toward the 150.00 per dollar area, and bond yields are significantly lower than they were a few months ago, despite being dragged higher in recent days by the rise in global yields.

The difference between investors’ outlook towards Japan and China is night and day. Both may be over-cooked right now, but market momentum in both countries is strong and showing little sign of reversing.

China and Hong Kong shares slumped again on Monday. China’s bluechip CSI300 Index skidded 1.6% to its lowest closing level in five years, the Shanghai Composite Index sank 2.7% – its biggest fall since April 2022 – and in Hong Kong the Hang Seng Index fell 2.3% to its lowest level in 14 months.

China’s central bank stood pat on interest rates on Monday, as expected. But many traders and investors will be wondering how much longer policymakers can sit on their hands. The longer it does, the longer the stock market selloff might go on.

Beijing has said it will take more forceful and effective measures to support market confidence, state media CCTV reported on Monday, citing a cabinet meeting chaired by Premier Li Qiang.

Also on Monday, China’s major state-owned banks moved to support the yuan, tightening liquidity in the offshore foreign exchange market while actively selling US dollars onshore as equities slid, sources told Reuters.

Here are key developments that could provide more direction to markets on Tuesday:

– Japan monetary policy decision

– South Korea PPI (December)

– Australia business confidence (December)

(By Jamie McGeever; Editing by Deepa Babington and Bill Berkrot)