Gold hits over 2-week low as investors book profit; US data in focus

Gold prices slipped to their lowest in over two weeks on Thursday as profit-taking kicked in after gold’s recent rally, while traders awaited US economic data that could offer more cues on when the central bank will cut interest rates.

Spot gold fell 1.8% to USD 2,355.22 per ounce by 1744 GMT, having touched its lowest since July 9. US gold futures settled about 2.6% lower at USD 2,353.50.

“There’s definitely some profit taking going on, triggered by the weakness in the US equity markets that was more than just a selloff,” said Marex analyst Edward Meir.

Gold hit an all-time high of USD 2,483.60 last week on growing optimism for an interest-rate cut from the US Federal Reserve in September.

Former New York Fed President Bill Dudley said the Fed should cut rates next week in a Bloomberg column on Wednesday, citing recent employment data.

Markets see a 100% chance of a rate cut in September, according to the CME FedWatch Tool. Non-yielding bullion’s appeal tends to shine in a low-interest rate environment.

Traders now await the US personal consumption expenditure (PCE) data – the Fed’s preferred inflation gauge – due on Friday.

“We’ve been on a steep rise in the gold and silver market as of late… so a combination of long liquidation and profit taking from the recent runs exacerbated the selling pressure,” said David Meger, director of alternative investments and trading at High Ridge Futures.

Meanwhile, China’s net gold imports via Hong Kong slumped 18% in June from the previous month, Hong Kong Census and Statistics Department data showed on Thursday, as the recent surge in gold prices weighed on jewelry demand.

Elsewhere, spot silver shed 4.2% to USD 27.77 per ounce on the day, hitting an 11-week low.

Platinum eased 1.4% to USD 934.85, near a three-month low, and palladium slipped 2.8% to USD 907.08.

(Reporting by Rahul Paswan in Bengaluru; Editing by Nick Zieminski)

Oil edges higher on upbeat US economic data

Oil prices settled higher on Thursday after strong US economic data stoked expectations for higher crude demand, but the gains were limited by concerns about lower oil imports from China.

Brent crude futures for September settled up 66 cents, or 0.81%, to USD 82.37 a barrel. US West Texas Intermediate crude for September gained 69 cents, or 0.89%, to USD 78.28.

US Commerce Department data on Thursday showed the US economy grew faster than expected in the second quarter while inflation eased, boosting expectations the Federal Reserve would lower interest rates in September. Lower interest rates are expected to stir economic activity, which could increase oil consumption.

“The US GDP data implied the economy is humming along at a pretty nice rate,” said Bob Yawger, director of energy futures at Mizuho in New York. “It’s an indication that we’re going to have a ‘soft landing,'” he said, referring to a scenario in which inflation is tamed without triggering a painful recession or large rise in unemployment.

In China, oil imports and refinery runs this year have trended lower than in 2023 on weaker fuel demand amid sluggish economic growth, government data showed.

“While Chinese economic data remains disappointing, we are starting to see larger oil inventory draws, which suggests supply growth lags demand growth,” UBS analyst Giovanni Staunovo said.

Earlier on Thursday, China’s central bank unexpectedly cut interest rates in a move to shore up its weakening economy.

Both crude oil benchmarks fell by more than USD 1 per barrel earlier in the session.

In Canada, hundreds of wildfires are burning in the western provinces of British Columbia and Alberta, including in the area of oil sands hub Fort McMurray. The area is forecast to receive some rain later this week, allaying supply worries. The hub produces 3.3 million barrels per day of crude.

Elsewhere, efforts to reach a ceasefire deal to end the war in Gaza between Israel and the militant group Hamas have gained momentum over the past month. A breakthrough could erode lingering threats to supply, sending prices lower.

“With continued, and according to some sources, conciliatory developments in Gaza peace talks, oil prices are finding it increasingly hard to hang on to intermittent rallies,” John Evans, an analyst at oil broker PVM, said in a note.

Israeli forces, however, advanced deeper into some towns on the eastern side of Khan Younis in southern Gaza on Thursday, hours after Israeli Prime Minister Benjamin Netanyahu told US lawmakers he was actively engaged in bringing hostages home.

(Reporting by Nicole Jao in New York and Noah Browning and Georgina McCartney in London; Additional reporting by Yuka Obayashi in Tokyo and Emily Chow in Singapore; Editing by David Goodman, Christina Fincher, Chris Reese, Paul Simao, and Diane Craft)

Gold skids on profit-taking, US economic data on radar

Gold prices fell nearly 1% on Thursday, as investors booked profits ahead of US economic data that could offer more cues on when the central bank will cut interest rates this year and by how much.

Spot gold fell 0.9% to USD 2,377.29 per ounce by 0217 GMT. US gold futures dropped 1.6% to USD 2,376.70.

“When you look from a fundamental perspective, there are no factors pressuring gold. So, it looks like we are seeing some profit-taking, and from a technical perspective, prices could move lower,” said Kelvin Wong, OANDA’s senior market analyst for Asia Pacific.

Markets are awaiting the US gross domestic product reading due at 1230 GMT and personal consumption expenditure (PCE) data – the Fed’s favored measure of inflation – on Friday to calibrate their expectations of when rates might be cut.

Traders are expecting that the Federal Reserve will deliver a long-awaited rate cut in September. Non-yielding bullion’s appeal tends to shine in a low-interest-rate environment.

If PCE data shows that inflation is slowing and the Fed can cut rates in September, then we will see a resurgence in gold prices, Wong said.

Meanwhile, a Reuters poll showed that gold prices are poised for a fresh run to record highs in the coming months while platinum and palladium will stay below USD 1,000 per ounce in 2024.

“A continuation of election-related uncertainty and rising geopolitical threats will add more volatility and likely impact broader macro variables,” the World Gold Council said.

“This, in turn, could drive investors to evaluate how they might mitigate risk in their own portfolios and draw them towards a safe-haven asset like gold.”

Among other metals, spot silver fell 2.8% to USD 28.18 per ounce, platinum eased 0.8% to USD 940.40 and palladium slipped 1.5% to USD 918.63.

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu)

Oil prices ease on concerns over weak China demand, Mideast ceasefire talks

TOKYO – Oil prices eased on Thursday as concerns over weak demand in China, the world’s largest crude importer, and expectations of a nearing ceasefire deal in the Middle East overcame gains in the previous session after draws in US inventories.

Brent crude futures for September fell 38 cents, or 0.5%, to USD 81.33 a barrel by 0129 GMT. US West Texas Intermediate crude for September slid 33 cents, or 0.4%, to USD 77.26 per barrel.

Benchmarks settled higher on Wednesday, snapping three straight sessions of declines after the Energy Information Administration said US crude inventories fell by 3.7 million barrels last week. That compared with analysts’ expectations in a Reuters poll for a 1.6-million-barrel draw.

US gasoline stocks dropped by 5.6 million barrels, compared with analysts’ expectations for a 400,000 draw. Distillate stockpiles fell by 2.8 million barrels versus expectations for a 250,000-barrel increase, the EIA data showed.

“Despite draws in US crude and gasoline stocks, investors remained wary about weakening demand in China and expectations of advancing ceasefire talks between Israel and Hamas added to pressure,” said Hiroyuki Kikukawa, president of NS Trading, a unit of Nissan Securities.

This year, China’s oil imports and refinery runs have trended lower than in 2023 on lower fuel demand amid sluggish economic growth, according to government data.

Slumping US stock markets also reduced traders’ risk appetite, Kikukawa added. All three main indexes on Wall Street ended lower on Wednesday.

In the Middle East, efforts to reach a ceasefire deal to end the war in the Gaza Strip between Israel and militant group Hamas under a plan outlined by US President Joe Biden in May and mediated by Egypt and Qatar have gained momentum over the past month.

On Wednesday, Israeli Prime Minister Benjamin Netanyahu sketched a vague outline of a plan for a “deradicalized” post-war Gaza in a speech to US Congress and touted a potential future alliance between Israel and America’s Arab allies.

“If Middle East ceasefire talks progress, US equities continue to slide, and China’s economy remains sluggish, oil prices could fall to early June levels,” said Satoru Yoshida, a commodity analyst with Rakuten Securities.

(Reporting by Yuka Obayashi; Editing by Christian Schmollinger)

Yen rises as carry trades unwind, risk sentiment takes a hit

SINGAPORE – The yen drew support from unwinding carry trades on Thursday ahead of next week’s Bank of Japan (BOJ) policy meeting and as a rotation out of megacap growth stocks dampened risk appetite broadly and provided some safe haven bids.

The Australian and New Zealand dollars continued to struggle on weak commodity prices, the euro flopped in the wake of a dour purchasing managers’ index (PMI) reading while the dollar held steady ahead of US growth figures later in the day.

The yen rose more than 0.5% to an intraday high of 152.835 per dollar, its strongest in 2-1/2-months, as traders abandoned short yen bets in the run-up to the BOJ’s July meeting, where a rate hike remains on the cards.

Sources told Reuters that the central bank is likely to debate whether to raise interest rates next week and unveil a plan to roughly halve bond purchases in coming years, signaling its resolve to steadily unwind its massive monetary stimulus.

“The threat of a taper of JGB purchases and the rate hike certainly seems to be driving that concern which we’ve seen there in dollar/yen and yen crosses,” said Tony Sycamore, a market analyst at IG.

“It’s also the fact that risk sentiment is deteriorating, and that’s helped (the yen) as well… I think it’s just a perfect storm at this point of time. You’ve got unwind in the tech trade, you’ve got unwind in the carry yen trade…you’ve got the Nikkei, as well, unwinding.”

The Japanese currency similarly held near its strongest level in 2-1/2-months against the euro, while sterling languished near an over one-month low and last bought 198.41 yen.

Japanese Finance Minister Shunichi Suzuki and top currency diplomat Masato Kanda both refrained from commenting on the yen’s recent sharp rise.

In the broader market, the dollar was on the front foot, drawing some safe haven support from a bout of risk aversion after Wall Street ended sharply lower amid an ongoing rotation out of technology stocks.

The euro eased 0.02% to USD 1.0837, further pressured by Wednesday’s PMI survey which showed growth in euro zone business activity stalled this month, pointing to a gloomy outlook in the bloc.

Sterling fell 0.09% to USD 1.2895, while the dollar index was little changed at 104.37.

Traders have their eye on second-quarter US growth figures later on Thursday, though the outcome is unlikely to significantly alter bets for Federal Reserve rate cuts this year, with a September move already fully priced in.

Down Under, the Australian dollar slid to its weakest level since early May at USD 0.65575, as it continues to be dragged by falling commodity prices.

The New Zealand dollar similarly fell 0.24% to USD 0.5915.

(Reporting by Rae Wee; Editing by Sam Holmes)

‘Fear gauge’ hits three-month high as US stocks sell off

NEW YORK – A hefty US stocks sell-off sent Wall Street’s most watched gauge of market volatility to a three-month high and boosted options trading volume on Wednesday, though strategists saw little evidence of panic.

The S&P 500 slipped 2.3%, on pace for its worst daily loss since late 2022, after Tesla and Alphabet reported lackluster earnings, prompting investors to question if the 2024 rally fueled by Big Tech and artificial intelligence is sustainable.

As stocks tumbled, the Cboe Volatility Index – known as Wall Street’s fear gauge because it measures demand for protection against stock swings – shot to 18.46, the highest since late April. Options on the VIX changed hands at nearly twice the usual pace on Tuesday, Trade Alert data showed.

The sell-off spotlighted the broader market’s vulnerability to any weakness in Big Tech, which has boosted indexes even as it sparked concerns over stretched valuations and recalled the dotcom boom more than two decades ago.

Still, the decline so far has been more an orderly retreat than a rout, options market participants said.

“We’re not seeing a whole lot of fear in the marketplace, meaning that people aren’t going out and trying to buy protection aggressively,” said Matthew Tym, head of equity derivatives trading at Cantor Fitzgerald. “It’s kind of very orderly and kind of passive, which indicates to me that nobody’s in a bad spot right here yet.”

Despite the recent wobble, months of strong equity market returns have likely left investors in a strong position to stomach a modest uptick in volatility, Tym said.

The S&P 500 is up 14% year-to-date, while the tech-heavy Nasdaq 100 – which fell 3.5% on Wednesday – has gained 13%. The indexes are off 4% and 8% from their all-time highs, respectively.

Nvidia, whose blistering rally has fueled a big part of the broader market’s gains, fell 6% on Wednesday but is still up about 130% for the year.

The VIX index at 18 remains below the peaks touched during recent weak market episodes. In October the index climbed as high as 23 during a sharp sell-off.

Big tech earnings are not the only thing on investors’ minds. Political uncertainty, an expected shift in Federal Reserve policy, and the seasonally weak stretch for stocks in September and October have raised the allure of portfolio protection for some investors.

Others, however, were taking advantage of the greater market volatility to bet that calm will return soon.

“While the crowd is hedging and hoping to time the in and out with that hedge, I’m shorting outright, as it climbs, and will simply await the inevitable plunge in volatility,” said Seth Golden, president of investment research firm Finom Group. He was referring to ProShares Ultra VIX Short-Term Futures ETF and the Barclays iPath Series B S&P 500 VIX Short-Term Futures ETN, ETFs that rise in value when volatility rises.

On Wednesday, UVXY was up 20% and the VXX rose 14%.

(Reporting by Saqib Iqbal Ahmed; Editing by Richard Chang)

Shorter-dated US yields lower after data as curve steepens

NEW YORK – Yields on shorter-dated US Treasuries fell on Wednesday but rose on longer durations as investors digested a flurry of economic data to gauge the health of the economy.

A closely watched part of the US Treasury yield curve measuring the gap between two- and 10-year Treasury notes, an indicator of economic expectations, was at a negative 13.4 basis points after steepening to a negative 13.0, its least inverted since Oct. 23.

An inversion of this part of the curve is widely viewed as a reliable signal that a recession is likely to follow in one to two years. It was last un-inverted in early July 2022.

The two-year US Treasury yield, which typically moves in step with interest rate expectations, fell 3.5 basis points to 4.41%.

The benchmark US 10-year Treasury note yield rose 3.9 basis points to 4.278%.

The Commerce Department said the US trade deficit in goods narrowed in June as exports rebounded, but trade likely remained a drag on economic growth in the second quarter. The gross domestic product report for that period is due out on Thursday.

Yields briefly pared declines after S&P Global said its flash US Composite PMI Output Index, which tracks the manufacturing and services sectors, edged up to 55.0 in July, signaling expansion to the highest level since April 2022. However, there were signs companies were having difficulty maintaining higher prices.

Investors awaited June personal consumption expenditures (PCE) data on Friday for further clues on the inflation outlook and the path of interest rates from the Federal Reserve.

Markets have grown more confident the Fed will cut rates this year as recent inflation data such as the consumer price index (CPI) have indicated prices are cooling again.

“Things are going to oscillate around but we need more data to figure out what trend we’re actually going to be going in,” said JoAnne Bianco, BondBloxx partner and client portfolio manager in Chicago.

“You had headline and core CPI come in lower than expected, those are inputs into PCE and core PCE so I’m anticipating more of the same.”

The yield on the 30-year bond rose 7.1 basis points, on track for its biggest daily gain since July 1, to 4.541%.

The Fed is scheduled to hold its next policy meeting at the end of July. Markets see only a slight chance for a rate cut of at least 25 basis points (bps) at that meeting, but are completely pricing in a cut in September, according to CME’s FedWatch Tool.

Yields rose after a mediocre Treasury auction of USD 70 billion in five-year notes US5YT=RR ended with a high yield of 4.121% and demand at 2.4 times the notes on sale.

Another USD 44 billion in seven-year notes is scheduled for Thursday in the week’s final auction.

The breakeven rate on five-year US Treasury Inflation-Protected Securities (TIPS) was last at 2.184% after closing at 2.179% on July 23.

The 10-year TIPS breakeven rate was last at 2.28%, indicating the market sees inflation averaging about 2.3% a year for the next decade.

(Reporting by Chuck Mikolajczak; Editing by Toby Chopra and Richard Chang)

Gold prices flat ahead of US economic data

Gold prices were flat in early Asian trade on Wednesday, with investors awaiting US economic data that could influence the Federal Reserve’s rate-cut timeline.

FUNDAMENTALS

* Spot gold was little changed at USD 2,409.66 per ounce, as of 0032 GMT. US gold futures ticked 0.1% higher to USD 2,410.50.

* The Fed will cut interest rates just twice this year, in September and December, as resilient US consumer demand warrants a cautious approach despite easing inflation, according to a growing majority of economists in a Reuters poll.

* Bullion prices scaled an all-time high of USD 2,483.60 last week amid rising bets of US rate cuts. Lower interest rates reduce the opportunity cost of holding non-yielding gold.

* Key data releases this week include the second-quarter gross domestic product (GDP) reading due on Thursday and the June personal consumption expenditures (PCE) price index on Friday.

* SPDR Gold Trust GLD, the world’s largest gold-backed exchange-traded fund, said its holdings rose 0.21% to 841.74 tons on Tuesday from 840.01 tons on Monday.

* India slashed import duties on gold and silver on Tuesday in a move industry officials said could lift retail demand and help cut smuggling in the world’s second-biggest bullion consumer.

* Turkey’s central bank said on Tuesday it decided to start swap auctions selling foreign currency and gold against Turkish lira with local banks, according to a document sent to banks.

* Spot silver steadied at USD 29.21 per ounce, platinum fell 0.3% to USD 940.41 and palladium was flat at USD 925.50.

DATA/EVENTS (GMT)

0050 Japan Chain Store Sales YY June

0715 France HCOB Mfg Flash PMI July

0715 France HCOB Services Flash PMI July

0715 France HCOB Composite Flash PMI July

0730 Germany HCOB Mfg Flash PMI July

0730 Germany HCOB Services Flash PMI July

0730 Germany HCOB Composite Flash PMI July

0800 EU HCOB Mfg Flash PMI July

0800 EU HCOB Services Flash PMI July

0800 EU HCOB Composite Flash PMI July

0830 UK Mfg Flash PMI July

0830 UK Services Flash PMI July

0830 UK Composite Flash PMI July

1400 US New Home Sales-Units June

(Reporting by Ashitha Shivaprasad in Bengaluru; Editing by Subhranshu Sahu)

Oil prices rise as US crude and fuel inventories seen shrinking

NEW YORK – Falling US crude inventories caused oil prices to rebound on Wednesday after several days of decline, while expectations for a nearing ceasefire deal in the Middle East kept prices from continuing to climb.

Brent crude futures for September rose 46 cents to USD 81.47 a barrel by 0020 GMT. US West Texas Intermediate crude for September increased 42 cents to USD 77.38 per barrel.

US crude oil, gasoline and distillate inventories fell last week, according to market sources citing the American Petroleum Institute (API), a trade organization.

Benchmarks picked up accordingly. WTI had lost 7% over the previous four sessions and Brent shed nearly 5% in the previous three.

The API figures showed crude stocks falling by 3.9 million barrels in the week ended July 19, the sources said, speaking on condition of anonymity. Gasoline inventories fell by 2.8 million barrels and distillates shed 1.5 million barrels.

That would be the first time crude stocks in the United States fell for four weeks in a row since September 2023.

Official government data on oil inventory data is due for release on Wednesday.

Oil prices fell to a six-week low on Tuesday, with Brent closing at its lowest level since June 9 on ceasefire talks between Israel and Hamas in a plan outlined by US President Joe Biden in May and mediated by Egypt and Qatar.

Prices also suffered on continued concern that economic softening in China, which is the world’s biggest crude importer, would weaken global oil demand.

(Reporting by Laila Kearney in New York; Editing by Christopher Cushing)

Dollar firms as commodities slide and carry unwinds

SINGAPORE – Commodity currencies touched multi-week lows on Wednesday tracking weakness in Chinese demand, while the yen has surged as short-sellers bail out ahead of a central bank meeting.

Purchasing managers’ index figures will be particularly watched in Europe later in the session to see whether they support bets on two European rate cuts by the end of January.

The euro held at USD 1.0848 in Asia trade and the sterling, which could rally if PMIs in Britain surprise to the upside and reduce bets on rate cuts, bought USD 1.2901.

Markets price a 44% chance of a 10 basis point rate hike in Japan next week and speculators, having also been rumbled by a few rounds of suspected currency intervention from Japan, are closing what had been profitable “carry trades” funded in yen.

Dollar/yen fell nearly 1% to 155.55 overnight and traded nearby at 155.78 early in the Asia session.

Moves in other pairs were even larger, with the euro dropping 1.3% on the yen overnight and hitting a five-week low of 168.79 yen in Asia. Mexico’s high-yielding peso dropped 2% on the yen overnight and the Australian dollar is down almost 6% on the yen in two weeks.

“The yen was super, super cheap,” said BNZ senior strategist Jason Wong in Wellington. “But with intervention, lots and lots of short position (holders) are taking money off the table ahead of the Bank of Japan meeting next week.”

Falls in oil, iron ore, and copper prices as well as a ripple of risk aversion in equities have dragged currencies such as the Australian, New Zealand, and Canadian dollars down on the US dollar.

The Aussie touched a five-week low just below USD 0.6612 in early trade on Wednesday. The New Zealand dollar hovered near Tuesday’s two-and-a-half-month low of USD 0.5951.

Chinese growth figures missed forecasts last week and surprise rate cuts on Monday have drawn attention to a lackluster outlook for raw material demand, weighing bellwether commodities such as iron ore and copper to three-month lows on Wednesday.

The Canadian dollar made a six-week low of CUSD 1.3787 per dollar ahead of a central bank meeting later on Wednesday where markets have priced an 84% chance of a 25 basis point rate cut.

At 104.5 the US dollar index was close to a two-week high. China’s yuan was steady at 7.2909 in offshore trade.

Further ahead traders are waiting on US GDP and core PCE data due later in the week to test expectations for two US rate cuts over the rest of this year. Next week’s second-quarter inflation data in Australia will be crucial for pricing the risk of another interest rate hike.

(Reporting by Tom Westbrook; Editing by Sam Holmes)

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