【Market Evening】Oil holds above $75, Gold dips as dollar firms
Asian markets dip lower on lackluster data from China, Japan;Oil holds above $75 on U.S. inventories and gas prices; Dollar sluggish as traders bide time before Fed meeting while kiwi jumps.

Gold dips as dollar firms
Spot gold prices eased on Thursday as a firmer dollar dented the metal’s allure for holders of other currencies, while investors awaited the U.S. Federal Reserve’s meeting for guidance on its timeline for stimulus withdrawal and interest rate hikes.
Bullion is viewed as a hedge against the inflation and currency debasement likely from widespread stimulus. The Fed’s tapering could tackle both those conditions, diminishing gold’s appeal.
Spot gold fell 0.61% to $1782.50 per ounce and spot silver fell1.18% to $23.53 per ounce by 17:30(GMT+8).
“Central banks want to reduce the emergency accommodation, it’s not needed anymore ... That’s going to be negative for gold over the medium term,” Stephen Innes, managing partner at SPI Asset Management said.
“We will have to start pricing in higher interest rates at some point in the next six months.”
The Federal Open Market Committee is due to meet on Sept. 21-22 amid growing number of policymakers signalling support for winding up the central bank’s bond-buying programme from this year.
Hareesh V, the head of commodity research at Geojit Financial Services said gold prices could see a choppy trade in the run-up to the Fed meet.
Dollar drifts as traders cast gaze toward FOMC for taper clues
The dollar drifted near the middle of its range of the past month versus major peers on Thursday, as traders looked to next week’s Federal Reserve policy meeting for indications on how soon the U.S central bank will start to taper stimulus.
The New Zealand dollar jumped after the economy grew at a much faster pace than expected, reinforcing the view that the central bank will start lifting interest rates despite a recent outbreak of the coronavirus.
The kiwi was 0.23% higher at $0.7125, after briefly surging as much as 0.47%.
The US dollar index, which measures the currency against six rivals, was at 92.483, little changed from Wednesday.
It reached a two-week high of 92.887 at the start of the week, only to drop to a one-week low at 92.321 on Tuesday after a softer-than-expected inflation report. Its low for the month was 91.941, hit on Sept. 3, when payrolls data disappointed.
“We’re waiting for the FOMC next week - that remains the key focus,” said Shinichiro Kadota, senior FX strategist at Barclays in Tokyo. “I don’t think the dollar is going to go too far in either direction (before that).”
The Federal Open Market Committee’s (FOMC) two-day policy meeting ending Sept. 22 should provide some clarity on the outlook for both tapering and eventual interest rate hikes.
Tapering typically lifts the dollar as it suggests the Fed is one step closer to tighter monetary policy.
It also means the central bank will be buying fewer debt assets, in effect reducing the number of dollars in circulation and increasing the currency’s value.
The dollar bought 109.33 yen, little changed from Wednesday, when it slid to a six-week low of 109.110.
The euro was flat at $1.1816, consolidating between the month’s high and low of $1.1909 and $1.17705.
The yen’s strong performance on Wednesday may have been helped by foreign flows into Japanese stocks with the Nikkei reaching a multi-decade high this week, as well as covering of short positions, Kadota said.
Oil holds above $75
Oil held above $75 a barrel on Thursday, within sight of a multi-week high hit a day earlier, supported by a big drop in U.S. crude inventories and surging European natural gas prices.
Brent crude oil price rose 0.12% to $75.09 a barrel while U.S. West Texas Intermediate crude oil price was at $72.36 a barrel, up 0.05% by 17:30(GMT+8).
U.S. crude inventories fell by 6.4 million barrels last week, more than the 3.5 million-barrel drop analysts expected, with offshore oil facilities still recovering from the impact of Hurricane Ida last month.
Brent has rallied 46% this year, supported by supply cuts by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, plus some recovery from last year's pandemic-related collapse in demand.
"The recovery from the destruction caused by the coronavirus is genuinely under way," said Tamas Varga of oil broker PVM. "Generally speaking, the world is on the mend."
Oil is also finding support from a surge in European power prices, which have soared because of factors including low gas inventories and lower than normal gas supply from Russia.
Benchmark European gas prices at the Dutch TTF hub have risen by more than 250% since January.
The price surge and impact on oil "is a situation that I believe will get much worse before it gets better", said Jeffrey Halley, analyst at brokerage OANDA.
Weighing on oil were signs of a resumption of recovery efforts in the U.S. Gulf after Hurricane Nicholas, which was downgraded to a tropical depression.
Asian markets dip lower
Stocks were mostly lower in Asia on Thursday after Japan and China released data that were weaker than expected.
Nikkei 225 fell 0.62% to 30,323.34.
South Korea KOSPI fell 0.74% to 3,130.09.
S&P/ASX 200 rose 0.58% to close at 7,460.20.
Taiwan capitalization weighted stock rose 0.43% to 17,278.70.
Hang Seng Index fell 1.46% to 24,667.85.
Japan reported that its exports rose 26.2% in August from a year earlier, but that was well below forecasts for a rise of about 34.0%, Marcel Thieliant of Capital Economics said in a commentary.
Relative weakness in vehicle exports might reflect shortages of semiconductors and other components that have prompted some manufacturers to cut output, he noted.
China reported its retail sales grew an anemic 2.5% in August, down from 8.5% in July, while factory output slowed to 5.3% from 6.4% the month before.
It was the slowest growth in output since May 2020.
“Yesterday’s China data were a real shock,” RaboResearch Global Economics & Markets said in a report. “This is hardly what one calls a robust consumer recovery,” it said.
Casino stocks slumped following reports of a possible crackdown on the industry by Chinese officials in Macau, the former Portuguese colony and gambling center.
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