Gold holds ground above 3-month low
Gold prices rose in European trade above three-month lows on track for the first profit in three days, ahead of crucial US inflation data.
Gold Prices
Prices rose 0.9% to $1,854 an ounce, after closing down 0.9% yesterday, the second loss in a row, as the dollar index hit 20-year highs.
US Dollar
The dollar index fell 0.4% on Wednesday on track for the first loss in four sessions off 20-year highs at 104.19.
The dollar is slipping now after statements from Fed officials, which cut the chances of a 0.75% rate hike next month.
US Inflation
From the US, consumer prices are expected up 0.2%, compared to a 1.2% rise in February, while core prices are expected up 6%, slowing down from 6.5% in March.
Inflation data will play a crucial role in determining the path forward for policy decisions.
Now analysts expect gold to hold around $1,830 an ounce, and potentially fall below $1800 if inflation hit fresh record highs.
The SPDR
Gold holdings at the SPDR fell 7.25 tones to a total of 1,075 tones, the lowest since March 15.
Oil rebounds from two-week lows as dollar slips
Oil futures rose over 3% in Asian trade with US crude rebounding from April 26 lows, while Brent climbed from April 25 lows, as the dollar index gave up ground.
Markets are assessing the Chinese Covid 19 crisis which is hammering demand on oil, while traders also assess the developments in the Ukrainian crisis, and the hesitation from the EU to impose a true ban on Russian oil supplies.
As of 06:59 GMT, US crude futures due in May rose 3.28% to $102.25 a barrel, while Brent July futures rallied 3.39% to $105.15 a barrel, as the dollar index declined 0.18% to 103.73.
China's consumer prices rose 2.1% in April as expected, while producer prices rose 8%, beating estimates of 7.8%.
Chinese authorities is clamping down heavily on any opposition to its zero-covid harsh policies against the pandemic, in order to contain the crisis quickly and return to solid growth.
China's central bank has issued statements asserting full support of the economy to provide enough liquidity and underpin small businesses.
Latest World Health Organization data showed Covid 19 infections rose to 515.75 million cases, with the death toll at 6.255 million.
From the US, consumer prices are expected up 0.2%, compared to a 1.2% rise in February, while core prices are expected up 6%, slowing down from 6.5% in March.
Baker Hughes data showed US oil rigs rose by 5 rigs to 557 rigs, the highest since March 2020, while US output steadied at 11.9 million barrels.
US output is down 1.2 million bpd or 10% from a record high at 13.1 million bpd scaled in March 2020, while hitting a record low in August 2020 at 9.7 million bpd.
Wall Street rebounds after heavy losses
US stock indices rose on Tuesday after sustaining hefty losses yesterday.
S&P 500 tumbled below 4000 for the first time in over a year yesterday.
The losses came amid wild concerns about a recession in the global economy due to policies of rapid rate hikes.
Dow Jones declined as of 14:51 GMT to 32,238, while S&P 500 rose 0.1% to 3,995, as NASDAQ rose 0.4% to 11,669.
Palladium extends losses to near $2000
Palladium prices declined on Tuesday as the dollar rose against major rivals.
The decline comes as dollar strengthens to 20-year highs at 103.8, with a 0.1% gain so far.
A stronger dollar hurts palladium and other currencies and makes them costlier to holders of other currencies.
The Fed announced last week a hike of 50 basis points in interest rates to below 1%, the largest such hike since 2002,
Investors are concerned such policies are leading the world to global recession and lower demand on commodities.
China
China remained under lockdown due to a new Covid 19 infectious wave, in turn hammering trade and industrial demand.
Palladium futures due in June fell 0.4% to $2,036 an ounce as of 14:34 GMT.