Gold prices flat in Asia on dollar support as Fed hikes next year likely
Gold prices traded flat in Asia on Wednesday on mild dollar support on growing prospects for rate hikes in the U.S. next year.
Overnight, gold prices rose earlier after the Commerce Department said new home sales fell by the most in five months in February, indicating headwinds still face the housing sector.
Sales of new homes fell by 3.3% in February to 440,000 units, the weakest level since last September. Still, analysts were calling for a decline of 4.9%.
January's sales were revised down to a 455,000-unit pace from the previously reported 468,000-unit rate.
Also on Tuesday, a report on U.S. housing showed that prices rose slightly less than expected in January.
The Standard & Poor’s/Case-Shiller home price index rose 13.2% in January from a year earlier, compared to forecasts for a 13.3% gain.
The numbers weakened the dollar, though growing expectations for the Federal Reserve to wind down its bond-buying program this year and hike benchmark interest rates somewhere around the middle of 2015 wiped out most of the precious metals gains.
Federal Reserve Chairwoamn Janet Yellen suggested at a press conference last week that interest rates could rise six months after the Fed's bond-buying program ends, which is widely seen taking place this fall.
Fed asset purchases, currently set at $55 billion a month, aim to stimulate the economy by suppressing interest rates, weakening the dollar as long as they remain in effect and making gold an attractive hedge.
Solid consumer confidence data watered down demand for gold as well.
The Conference Board reported that its consumer confidence index increased to 82.3 this month, the highest since January 2008, from 78.3 in February. Analysts had expected the index to tick up to 78.6.
Sales of new homes fell by 3.3% in February to 440,000 units, the weakest level since last September. Still, analysts were calling for a decline of 4.9%.
January's sales were revised down to a 455,000-unit pace from the previously reported 468,000-unit rate.
Also on Tuesday, a report on U.S. housing showed that prices rose slightly less than expected in January.
The Standard & Poor’s/Case-Shiller home price index rose 13.2% in January from a year earlier, compared to forecasts for a 13.3% gain.
The numbers weakened the dollar, though growing expectations for the Federal Reserve to wind down its bond-buying program this year and hike benchmark interest rates somewhere around the middle of 2015 wiped out most of the precious metals gains.
Federal Reserve Chairwoamn Janet Yellen suggested at a press conference last week that interest rates could rise six months after the Fed's bond-buying program ends, which is widely seen taking place this fall.
Fed asset purchases, currently set at $55 billion a month, aim to stimulate the economy by suppressing interest rates, weakening the dollar as long as they remain in effect and making gold an attractive hedge.
Solid consumer confidence data watered down demand for gold as well.
The Conference Board reported that its consumer confidence index increased to 82.3 this month, the highest since January 2008, from 78.3 in February. Analysts had expected the index to tick up to 78.6.
NYMEX crude oil prices gain in Asia, but tempered by API data
Crude oil prices rose slightly in Asia on Wednesday on continued geopolitical tensions over the Ukraine, but ample U.S. industry inventory data tempered gains.Brent crude for May delivery, which gauges global oil prices, rose 18 cents, or 0.2%, to $106.99 a barrel on the ICE Futures Europe exchange on Tuesday.
Industry trade group the American Petroleum Institute said domestic crude stockpiles rose 6.3 million barrels last week, while gasoline stocks declined 2.8 million barrels, distillate stocks rose 0.3 million barrels and refinery runs were 86.8% of capacity. The U.S. Department of Energy will release its own estimates on Wednesday. Overnight, crude futures fell as investors remained spooked over soft Chinese output data released during the weekend, largely shrugging off robust U.S. consumer confidence data.
Crude falls on China output data, looks past U.S. confidence report
Soft Chinese factory data released over the weekend continued to water down oil prices on Tuesday. China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to an eight-month low of 48.1 in March from a final reading of 48.5 in February, defying expectations for a rise to 48.7.
China is the world's second-largest consumer of crude. Robust consumer confidence data failed to rally prices, as mixed U.S. housing data disappointed energy markets. The Conference Board reported that its consumer confidence index increased to 82.3 this month, the highest since January 2008, from 78.3 in February. Analysts had expected the index to tick up to 78.6. The report showed that consumers expect the economy to continue improving and believe it may gather momentum in the coming months. Separately, the Commerce Department said new home sales fell by the most in five months in February, indicating headwinds still face the housing sector.
Industry trade group the American Petroleum Institute said domestic crude stockpiles rose 6.3 million barrels last week, while gasoline stocks declined 2.8 million barrels, distillate stocks rose 0.3 million barrels and refinery runs were 86.8% of capacity. The U.S. Department of Energy will release its own estimates on Wednesday. Overnight, crude futures fell as investors remained spooked over soft Chinese output data released during the weekend, largely shrugging off robust U.S. consumer confidence data.
Crude falls on China output data, looks past U.S. confidence report
Soft Chinese factory data released over the weekend continued to water down oil prices on Tuesday. China’s HSBC Flash Purchasing Managers Index, the earliest indicator of the country's industrial activity, fell to an eight-month low of 48.1 in March from a final reading of 48.5 in February, defying expectations for a rise to 48.7.
China is the world's second-largest consumer of crude. Robust consumer confidence data failed to rally prices, as mixed U.S. housing data disappointed energy markets. The Conference Board reported that its consumer confidence index increased to 82.3 this month, the highest since January 2008, from 78.3 in February. Analysts had expected the index to tick up to 78.6. The report showed that consumers expect the economy to continue improving and believe it may gather momentum in the coming months. Separately, the Commerce Department said new home sales fell by the most in five months in February, indicating headwinds still face the housing sector.
Natural gas shoots up as late-season blizzard roars across U.S.
Natural gas futures shot up on Tuesday as blizzard was set to roar across the northeast and hike demand for heating.
The May contract settled down 0.58% on Monday to end at $4.272 per million British thermal units. Natural gas futures were likely to find support at $4.258 per million British thermal units, Monday's low, and resistance at $4.585, the high from March 17. A powerful storm was forming over the Atlantic and poised roar across the northeastern U.S. later Tuesday, dumping heavy snow along the way. Investors snapped up the commodity on expectations that demand for natural gas will be stronger than once expected, though forecasts for a return of milder springtime temperatures in the coming days capped gains. Total U.S. natural gas storage stood at 953 billion cubic feet as of last week, the lowest for this time of year since 2003, following a smaller than expected withdrawal of 48 billion cubic feet.
Early withdrawal estimates for this Thursday’s storage data range from a decline of 36 billion cubic feet to 76 billion cubic feet, compared to a drop of 90 billion cubic feet during the same week a year earlier.
The five-year average change for the week is a decline of 7 billion cubic feet. Natural gas prices have been under heavy selling pressure in recent sessions amid concerns that the arrival of spring will bring warmer temperatures throughout the U.S. and cut into demand for heating. The heating season from November through March is the peak demand period for U.S. gas consumption. Approximately 52% of U.S. households use natural gas for heating, according to the Energy Department.
Economic Calendar
Time
|
Cur.
|
Event
|
Forecast
|
Previous
| |
Wednesday, March 26
| |||||
2:00
|
USD
|
API Weekly Crude Stock
|
5.920M
| ||
2:00
|
USD
|
API Weekly Distillates Stocks
|
-0.674M
| ||
2:00
|
USD
|
API Weekly Gasoline Stock
|
-1.410M
| ||
4:30
|
USD
|
FOMC Member Plosser Speaks
| |||
11:30
|
USD
|
FOMC Member Bullard Speaks
| |||
16:30
|
USD
|
MBA 30-Year Mortgage Rate
|
4.50%
| ||
16:30
|
USD
|
MBA Mortgage Applications (WoW)
|
-1.20%
| ||
18:00
|
USD
|
Core Durable Goods Orders (MoM)
|
0.30%
|
1.10%
| |
18:00
|
USD
|
Durable Goods Orders (MoM)
|
1.00%
|
-1.00%
| |
18:00
|
USD
|
Goods Orders Non Defense Ex Air (MoM)
|
0.60%
|
1.50%
| |
19:15
|
USD
|
Services PMI
|
54.2
|
53.3
| |
20:00
|
USD
|
Crude Oil Inventories
|
5.850M
| ||
20:00
|
USD
|
EIA Weekly Distillates Stocks
|
-3.097M
| ||
20:00
|
USD
|
Gasoline Inventories
|
-1.467M
| ||
22:30
|
USD
|
5-Year Note Auction
|
1.53%
| ||
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