Gold and silver trader higher leading in to the European session despite suffering heavy losses post FOMC

Gold is trading 0.41% higher after losing ground following the FOMC event last night. Silver is also positive and has moved 0.46% higher and trades above the $27/oz psychological level. In the rest of the commodities markets, copper is 1% higher while spot WTI trades 0.36% in the black.

After inheriting a negative handover from Wall Street, bourses in the Asia Pac area struggled. The Nikkei 225 (-0.90%), ASX (-0.40%) and Shanghai Composite (0.01%) all struggled.

In FX markets, the USD rallied on Thursday but heads into the EU open -0.08% lower. The biggest mover is once again NZD/USD which trades just over half a percent higher. Bitcoin is only marginally higher leading into the last trading day of the week.

The FOMC was more hawkish than some analysts had been expecting last night and this moved up expectations of tapering and rate hikes. The dot plot now sees a rate lift-off in 2023 (median) with 7 dots seeing a hike in 2022 (prev 4) and 13 in 2023 (prev 7)

In terms of overnight news, the RBA said its bond market operation was canceled overnight due to a technical glitch.

China's NDRC says has preliminary success curbing price surges in commodity prices.

Australian May Employment Change +115.2K (expected +30K) & Unemployment Rate: 5.1% (expected 5.5%). New Zealand GDP for Q1 2021 (sa) 1.6% q/q (expected +0.5%).

RBA Gov Lowe said it is premature to be considering ending bond buying.

BoC Gov Macklem says economic recovery is making good progress. Macklem added the BoC is taking the recent strength of the CAD into account.

Following events last night, JP Morgan says they continue to expect Fed interest rate hike lift-off in 2023, taper in early 2022.

U.S. Treasury Sec Yellen says the U.S. may decouple from China to some extent.

U.S. President Biden warned Russian President Putin against the nation carrying out more cyberattacks against the nation.

Looking ahead to the rest of the session highlights include EU CPI, rate decisions from Turkey and Switzerland, U.S. initial jobless claims, Philly Fed manufacturing data. We could also hear from U.S. treasury secretary Yellen, ECB's Elderson, ECB's Lane, German Buba's Balz and German Buba's Mauderer.
 

By Rajan Dhall

For Kitco News

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