【TOP1 Evening】Gold rises and Dollar hits 4-week low, Oil hits one-month highs

Gold

Gold prices rose on Thursday, boosted by a weaker dollar and a pullback in U.S. bond yields, while investors awaited U.S. weekly jobless claims and March retail sales data for further clarity on recovery in the world's largest economy.

Spot gold rose 0.66% to $1747.28 per ounce, silver rose 0.82% to $25.595 per ounce by 18:00 (GMT+8).

The dollar slipped to a four-week low against its rivals, making gold less expensive for other currency holders.

Meanwhile, benchmark 10-year U.S. Treasury yields held near a three-week low. Lower bond yields reduce the opportunity cost of holding non- interest bearing gold.   

U.S. Federal Reserve Chair Jerome Powell said on Wednesday the central bank would cut its monthly bond purchases before committing to an interest rate hike, clarifying the sequence of monetary policy adjustments are still months if not years in the future.   

"Gold is still trapped in a range trade, until we get above $1,765 per ounce the range trade holds," said Stephen Innes, chief global market strategist at financial services firm Axi.

Investors now await the release of U.S. weekly jobless claims and March retail sales data due later in the day for further clues on the recovery in the world's largest economy.

"Although gold has lost much of its appeal for investors in 2021 compared to 2020 and the technical picture has deteriorated in favour of bears rather than gold bulls, deep corrections of prices are still viewed as buying opportunities," Avtar Sandu, senior commodities manager at Phillip Futures, said in a note.

Forex

The U.S. dollar sank to a new four-week low versus major peers on Thursday as Treasury yields pulled back from last month's surge, with investors increasingly convinced by the Federal Reserve's arguments that interest rates will stay low for some time.

The U.S. dollar index fell 0.11% to 91.54 by 18:00(GMT+8).

The euro rose as high as a four-week top of $1.1989, matching the highest level since March 4, before trading mostly unchanged at $1.19735.

The dollar changed hands at 108.87 yen, after hitting a three-week low of 108.755 on Wednesday.

"The dollar has been losing steam a bit in line with falls in U.S. bond yields as the Fed has maintained its dovish stance," said Yujiro Goto, chief currency strategist at Nomura Securities.

Repeated assurances from Fed officials that it will keep interest rates low have helped stabilize U.S. bonds, especially at the short end of the market.

Meanwhile, stocks have marched higher, with the S&P 500 setting new records this week.

"Risk sentiment is improving," dragging on bond yields and the dollar, said Osamu Takashima, chief currency strategist at Citigroup Global Markets Japan.

"I believe the dollar weakening trend could continue," with a move toward 108 yen and $1.205 per euro in the very near term, he said.

A weaker U.S. dollar also saw commodity currencies supported. The Australian dollar rose at high as $0.7745 on Thursday for the first time since March 23, following a 1% rally in the previous session that saw it break out of its tight trading band over the last few weeks.

"When economic data is strong and the Fed is not turning hawkish, we could see risk-sensitive currencies gaining against both the dollar and the yen," said Nomura's Goto.

Crude Oil

Oil prices were lower on Thursday though holding near one-month highs after futures jumped in the previous as the International Energy Agency (IEA) and others upgraded forecasts for oil demand as major economies recover from the pandemic.

U.S. West Texas Intermediate (WTI) crude was at $62.886 a barrel, rose 0.21%, Brent was down to $65.991 a barrel, rose 0.08% by 18:00(GMT+8).

U.S. crude inventories were down by 5.9 million barrels last week, the Energy Information Administration (EIA) said on Wednesday, more than double analysts' expectations for a 2.9 million-barrel decline.

"We see robust stock draws even after factoring in bearish risks as refinery runs are set to rise sharply in the coming months," Citi Research analysts said in a note.

Gasoline supplied to the market last week, an indicator of U.S. consumption of the fuel, increased to 8.9 million barrels per day (bpd), the highest since August, the EIA report said.

Global oil demand and supply are set to be rebalanced in the second half of this year after the evaporation of demand in 2020 as the COVID-19 pandemic raged, according to the IEA's monthly report.

Producers may then need to pump a further 2 million bpd to meet the demand.

The Organization of the Petroleum Exporting Countries (OPEC), which has been withholding supply in tandem with other producers including Russia, this week raised its forecast for global oil demand this year.

OPEC expects demand to rise by 70,000 bpd from last month's forecast and global demand is likely to rise by 5.95 million bpd in 2021, it said.

Stocks

Stocks in Asia-Pacific were mixed on Thursday.

Nikkei 225 rose 21.70 points or 0.073%, close at 29,642.69.

S&P/ASX 200 rose 35.50 points or 0.51% to close at 7,058.60.

Hang Seng Index fell 107.69 points or 0.37% to 28,793.14.

South Korea's Kospi rose 11.95 points or 0.38% to 3,194.33.

Taiwan capitalization weighted stock index rose 210.76 points or1.25% to 17,076.73.

Europe stock markets opened higher on Wednesday,At press time: 

FTSE 100 Index rose 31.10 points or 0.45% at 6,970.68.

Germany DAX 30 rose 56.63 points or 0.37% at 15,265.78.

France CAC 40 rose 18.78 points or 0.30% at 6,227.36.

Three funds at Cathie Wood's Ark Investment Management bought shares of the biggest U.S. cryptocurrency exchange Coinbase Global Inc. on its highly anticipated trading debut Wednesday.

Coinbase's stock opened at $381 on Nasdaq and climbed to as high as $429.54 -- sending the exchange's valuation soaring above $112 billion -- before Bitcoin's drop from record highs and a broader decline in tech stocks saw its shares slipping back below the opening price.

Ark, founded by Wood in 2014, invests in companies involved with disruptive trends, which means it has a limited pool of targets in which to deploy that money. Concerns have swirled around the New York-based firm in recent months on concentration risks after a stellar year saw ETF assets surge at one point to more than $60 billion.

Ford Motor Co on Wednesday outlined another series of plant shutdowns due to the global semiconductor chip shortage, with five facilities in the United States and one in Turkey affected.

Ford said in March it expected the semiconductor shortage to cost between $1 billion and $2.5 billion. While the company has prioritized chips for its highest-profit vehicles, it has been forced at times to idle production of its top-selling F-150 full-size pickup, and it has parked some of those trucks for final assembly later when enough chips are in hand.

Industry research firm AutoForecast Solutions estimated lost production of almost 408,000 vehicles for Ford due to the shortage, with Wednesday's actions accounting for more than 91,300 of that total.

Also on Wednesday, Japan's Nissan Motor Co announced downtime in April for its plants in Smyrna, Tennessee; Canton, Mississippi, and Aguascalientes, Mexico, due to the shortage.

Industry officials have previously said the shortage would be worse in the second quarter than the first. Ford's larger U.S. rival, General Motors Co, previously said it expected the financial impact of the chip shortage to shave as much as $2 billion from profit.

It was not clear if chip supplies will recover in the third quarter and whether automakers can make up all the lost production later this year.

Focus Tonight

20:30(GMT+8): United States Continuing Jobless Claims (03/APR); Forecast:3700K, Previous: 3734K;

22:30(GMT+8): United States Retail Sales MoM(MAR), Forecast: 5.9%, Previous: -3%;