Gold futures fell in Asian trade
Gold prices fell in Asian trading on Thursday and silver continued to fall sharply from overnight movement investor attention focused on the European Central Bank policy review which will be released on Thursday.
On the Comex division of the New York Mercantile Exchange, gold for August delivery decreased 0.41% to $ 1,313.85 per troy ounce.
Silver futures for September delivery fell 1.30% to $ 19.358 per troy ounce, while copper for September delivery edged up 0.04% to $ 2.247 per pound.
Overnight, gold fell as much as 1% on Wednesday, as the dollar hovered around four-month highs, ahead of critical interest rate decision by the Governing Council of the European Central Bank on Thursday afternoon in Frankfurt.
Gold extended losses overnight as investors awaited the first meeting of the ECB Governing Council’s monetary policy since the U.K. historic referendum last month.
On Wednesday, the economic indicators showed that consumer confidence in the EU fell sharply by 1.8 in June to minus-7.6, falling to its lowest level since November 2014. In the euro area, the flash consumer confidence index decreased DG ECFIN 0, 7 from a minus-7.2 to minus-7.9 upward revision. Analysts had expected a reading of minus-8.0. Governing Council is widely expected to stand pat at a meeting on Thursday, amid a relative lack of data following the decision of the U.K. to leave the European Union on June 24.
ECB meeting comes a day before the Federal Open Market Committee (FOMC) will hold a two-day meeting in July in the middle of next week. Because the Fed to leave short-term interest rates unchanged at its June meeting of the FOMC, the participants had a lot split at the time of the next rate hike, in the middle of the work and a strong housing figures. (NASDAQ: NASDAQ: CME) CME Group Fed Watch tool now sees 41.6% chance of a 25 basis point hike in December, up from around 20% last week.
Investors are bullish on gold which support a gradual tightening of monetary policy by the Fed. Gold, which is not attached to the interest rate, struggling to compete with the high yield bearing assets in the environment increasing rate.
Elsewhere, the Dow Jones Industrial Average rose 60 points on Wednesday to an intraday high of 18,622.01, hitting an all-time intra-session high. With a few hours left in the session Wednesday, the Dow on pace for the ninth consecutive win – the longest streak in three years. Because foreign investors have entered into a broad US equity risk in trading, gold has lost some momentum over the past week.
Technically
Resistance: 1315.28 1318.37 1321.10 High / Low: 1337.85 / 1325.15
Support: 1313.27 1312.47 1309.38 Running Price: 1313.70
Comment: For intraday trade today suggest Buy at 1316.48; stop loss at 1314.28; targets at 1318.48.
The dollar index touched the highest
The US Dollar Index jumped to a four-month high in trading Thursday, extending recent gains as foreign exchange traders waiting for a meeting to discuss the monetary policy of the European Central Bank Governing Council for indications on the long-term direction of the major currencies.
In the highest-session, the index reached as high as 97.37, its highest level since early March. The dollar is on track to win a fourth straight session and sixth over the last 10. Since Brexit historic decision last month, the dollar has surged about 3% against its main rivals.
The US dollar moved slightly higher against the euro and the British pound on Wednesday as investors looked ahead to the first monetary policy meeting of the ECB Governing Council since U.K. voters approved a measure paving the way for the British departure from the EU. On Wednesday, the economic indicators showed that consumer confidence in the EU fell sharply by 1.8 in June to minus-7.6, falling to its lowest level since November 2014. In the euro area, the flash consumer confidence index decreased DG ECFIN 0, 7 from an upwardly revised minus-7.2 to minus-7.9. Analysts had expected a reading of minus-8.0. Governing Council is widely expected to stand pat at a meeting on Thursday, amid a relative lack of the following data-inspired shock Brexit market.
ECB meeting comes a day before the Federal Open Market Committee (FOMC) will hold a two-day meeting in July in the middle of next week. Because the Fed to leave short-term interest rates unchanged at its June meeting of the FOMC, the participants had a lot split at the time of the next rate hike, in the middle of the work and a strong housing figures. CME Group (NASDAQ: CME) tool Fed Watch now see a 41.6% chance of a 25 basis point hike in December, up from around 20% last week. Any increase in interest rates by the Fed this year is seen as bullish for the dollar, as investors piled into the greenback to take advantage of higher yields.
Elsewhere, the USD / JPY jumped more than 1% to an intraday high of 107.44, clearing the 107 level for the first time in six weeks. Earlier, Kyodo reported that the Japanese government is considering a stimulus package of JPY 20 trillion – roughly twice the amount of the previous reports have indicated. The dollar has jumped almost 7% against the yen since the former Fed chairman Ben Bernanke met with Japanese Prime Minister Shinzo Abe last week in Tokyo. Both reportedly discussed the prospects of implementing the stimulus plan involving the use of “helicopter money” as a tool to boost stubbornly low inflation.
Yields on US 10-year rose three basis points on Wednesday to 1.58%. Despite the modest rise, yields on 10-year US Treasuries fell by more than 75 basis points over the last year.
Technically
Resistance: 1.1019 1.1029 1.1037 High / Low: 1.1029 / 1.0979
Support: 1.1010 1.1006 1.0999 Running Price: 1.1017
Comment: For intraday trade today suggest Buy at 1.1028; stop loss at 1016; targets at 1.1048.
Dowjones still continue rising, driven positive results issuers profit
American Stock Exchange observed to rise by the end of trading Thursday before dawn, with the Dow ended at a record high for the seventh consecutive positive results encouraged issuers earnings and rising crude oil prices.
The Dow Jones industrial average extended gains for nine consecutive days for the first time since 2013, with Microsoft shares contributed the highest.
The S & P 500 closed at a new record level, led by the technology sector which had the best day in 16 years.
The Nasdaq had its highest close this year, helped by an increase of 2 percent in biotechnology.
Results of the issuer’s profit or Bank continued to surprise on Wednesday with Morgan Stanley reported a profit of 75 cents per share compared to consensus expectations of 59 cents, according to Thomson Reuters. Morgan Stanley joined Goldman Sachs, Citigroup, JPMorgan Chase, and Bank of America on the list of US financial institutions that rise in second-quarter profit forecast.
Dow hit a new intraday high Wednesday, led by Microsoft, which beat on earnings and revenue as Azure cloud products saw revenue growth of 102 percent.
About 64 percent of companies in the S & P 500 had reported on Tuesday morning earnings exceeded estimates, according to Thomson Reuters, compared with the long term average of 63 percent over the last 22 years.
Abbott Labs, American Express, eBay, Intel, Qualcomm, Mattel and United Continental also reported Wednesday.
US crude oil inventories fell by 2.3 million barrels for the ninth consecutive decline in inventories, according to the weekly EIA data released Wednesday.
Oil prices turned positive after hitting a two-month low earlier in the session. WTI crude oil futures closed up 29 cents to $ 44.94 a barrel after falling to its lowest level since May 10. Brent crude traded near $ 47, up more than 1 percent.
Sterling moved higher after the Bank of England released a report on the economic impact of last month due to Brexit. This report shows no clear evidence of slowing economic activity, with signs that the demand for credit is reduced and the company does not expect short-term impact on capital spending.
Technically
Resistance: 18537 18545 18 558 High / Low: 18565/18402
Support: 18524 18503 18 472 Running Price: 18 432
Comment: For intraday trade today suggest Sell at 18508; stop loss at 18628; target at 18308.
