Gold dips in Asia after Fed hike, but steady dollar offers support

Gold dips in Asia after Fed hike, but steady dollar offers support.

Gold dipped in Asia as a widely expected interest rate hike by the Federal Reserve provided room for caution, but the dollar failed to respond sharply giving room for support. Overnight, Gold prices came under pressure on Wednesday, after the Federal Reserve raised interest rates for the second time this year and maintained its outlook of three total rate hikes for this year. The Federal Reserve increased its key interest rate by 0.25% to a 1.00%-1.25% range on Wednesday, and surprise investors as it maintained its outlook of three total rate hikes for 2017, despite the recent dip in job creation and inflation. The central bank said it expects that a tightening labor market will lift inflation to the 2% target over the medium term. Fed chair Janet Yellen echoed these remarks in a press conference following the rate decision. “Employment is near its maximum level and the committee expects inflation to move and stabilize around 2% over the next couple of years” Yellen said.

The bullish comments on inflation and additional rate hikes lifted the Dollar into positive territory against a basket of global currencies, pushing the precious metal to session lows.

SHFE Zinc to Consolidate at Highs.

The market will continue to absorb Fed rate hike news today, weighing on LME zinc. The Bank of England’s interest rate decision will be eyed today. ILZSG reported Wednesday deficit in global zinc market expanded to 92,400 tonnes in April 2017. Supply in March is revised to 72,700 tonnes deficit, wenhua.com reported.

LME Lead to Edge down.

International Lead and Zinc Research Organization (ILZSG) announced on June 14 that global lead supply deficit narrowed to 6,200 tonnes in April from 53,800 tonnes seen in March. China Motive Battery Market Reports Tight Supply, and to Ease in Mid and Late June, SMM ReportsIn China’s domestic market, spot lead should trade at RMB 16,950-17,100/mt on Thursday..

Oil prices struggle on doubts OPEC can rein in oversupply.

Oil Oil prices wallowed near their lowest levels in seven months early on Thursday, hurt by high global inventories and doubts over OPEC's ability to implement production cuts.oth benchmarks are hovering near levels last reached in late November last year when production cuts led by the Petroleum Exporting Countries (OPEC) were first announced in an effort to prop up prices. "For OPEC, an oversupply headache became a migraine," said Jeffrey Halley, senior market analyst at futures brokerage OANDA in Singapore. However, some OPEC members including Nigeria and Libya have been exempt from cutting, and their rising output undermines efforts led by Saudi Arabia.

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