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Gold holding its losses in early trades on Thursday made during Wednesday session as the dollar strengthened, and stayed weaker after the US Federal Reserve kept interest rates steady as expected. The Fed, after a two-day meeting, characterized the U.S. economy as strong, keeping the central bank on track to increase borrowing costs in September. In a highly anticipated move, the Federal Reserve left its Fed Funds rate in a range between 1.75% and 2%. On the economy, the central bank said that activity “has been rising at a strong rate.” "Risks to the economic outlook appear roughly balanced," the statement reiterated. The U.S. dollar, in which gold is priced, pared gains against a basket of leading currencies after the Fed statement. Earlier in the session, it firmed after a source familiar with the Trump administration's plans said the White House was about to propose higher tariffs on $200 billion in Chinese imports. On the inflation front, the central bank said that they continue to expect inflation to reach a sustainable 2% over the medium term. Economists have noted that there is not much for markets to chew on in the statement. Currently markets are pricing in a more than 90% chance that the Federal Reserve raises interest rates in September. Private payrolls in the U.S. increased by more than expected last month as companies get a boost from lower corporate taxes, ADP and Moody's Analytics said Wednesday. Jobs in the U.S. increased by 219,000 in July, while economists polled by Reuters expected a gain of 185,000. July's job gains were the best since February, when 241,000 jobs were added. Jobs growth for the previous month was also revised up to 181,000 from 177,000.
Crude oil futures were higher during mid-morning trade in Asia Thursday amid mild bargain hunting after Wednesday's declines. After yet another surprise report—this time of an inventory build—from the American Petroleum Institute weighed on prices yesterday, the Energy Information Administration confirmed a build, reporting U.S. crude oil inventories had added 3.8 million barrels last week. At 408.7 million barrels, the EIA said, crude oil inventories were below the five-year seasonal average. Analysts polled by IG Group had expected a slight inventory decline of 200,000 barrels, after the previous week’s major, 6.1-million-barrel draw reported by the EIA. In gasoline, the EIA reported a draw in inventories, at 2.5 million barrels, compared with 2.3 million barrels a week earlier. Gasoline production averaged 10.5 million bpd between July 23 and 27, up slightly on the previous week. In distillates, the agency reported an inventory increase of 3 million barrels. This compares with a draw of 100,000 barrels a week earlier. Refineries produced 5.2 million barrels of distillates daily last week, basically unchanged from a week earlier. The average daily throughput of refineries stood at 17.5 million barrels of crude, almost 200,000 bpd more than in the previous week, with the facilities operating at 96.1 percent of capacity. Production of crude oil is expected to stay at record highs for the time being despite pipeline constraints in the Permian—the top performer in the U.S. oil patch.
Shanghai copper fell more than 1 percent in early trade on Thursday, after U.S. officials confirmed that President Donald Trump's administration proposed an increase in tariff rate on $200 billion worth of Chinese goods. Fears that the trade row between the world's top two economies could hit demand for industrial metals saw Shanghai copper shed 3.4 percent in July, while London copper posted its biggest monthly fall since December 2016. U.S. President Donald Trump sought to ratchet up pressure on China for trade concessions by proposing a higher 25 percent tariff on $200 billion worth of Chinese imports, his administration said on Wednesday. Shanghai nickel was down 2.7 percent at 110,360 yuan a tonne, after a 3.1 percent drop in LME prices on Wednesday. The ShFE will raise the transaction fee for November nickel futures to 6 yuan per lot from 1 yuan, effective Aug. 3. Global miner Rio Tinto, said on Wednesday its first-half profit.
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