Thursday, May 3, 2018

Stock & Commodities Related News.

US STOCKS-U.S.-China trade tensions, earnings set to pressure Wall St - Reuters News 
03-May-2018 09:03:32 PM 
AIG slides after lower-than-expected Q1 profit
U.S. team arrives in Beijing for trade talks
Caterpillar drops after BofA downgrade
Futures down: Dow 97 pts, S&P 6.75 pts, Nasdaq 22 pts
Adds comments, details, updates prices
By Sruthi Shankar
May 3 (Reuters) - U.S. indexes were on track to open lower on Thursday as investors remained on edge about U.S.-China trade talks, while the latest round of earnings added little cheer.
Among early decliners were AIG, which dropped 6.7 percent after the insurer reported a lower-than-expected quarterly profit.
Tesla shed 7.7 percent, extending losses from Wednesday after Chief Executive Officer Elon Musk cut off analysts asking about the company's profit potential, despite promises that production of the troubled Model 3 electric car was on track.
At 8:48 a.m. ET, Dow e-minis  were down 97 points, or 0.41 percent. S&P 500 e-minis were down 6.75 points, or 0.26 percent and Nasdaq 100 e-minis were down 22 points, or 0.33 percent.
Wall Street closed lower on Thursday, weighed down by news about potential U.S. restrictions on Chinese telecommunications companies, and after the Federal Reserve reaffirmed outlook for more rate hikes.
"We weakened post the FOMC meeting and it's a little bit of the same carrying over to today," said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. "Augmenting it is some worries about trade negotiations with China that are underway and what may come of that."
The central bank expressed confidence that a recent rise in inflation near to its target would be sustained, leaving it on track to raise borrowing costs in June, but emphasized the inflation target was "symmetric", suggesting it was not inclined to speed up its tightening plans.
The focus now shifts to trade issues between U.S. and China as a Trump administration delegation, including Treasury Secretary Steven Mnuchin, visits Beijing for negotiations.
Data showed trade deficit with China for politically sensitive goods dropped 11.6 percent to $25.9 billion, which will do little to ease tensions between the two countries.
First-quarter earnings continued to come in strong, with nearly 80 percent of the 343 S&P 500 firms that have reported so far topping profit estimates.
Despite that, the rewards to profit beats have been subdued as investors worry that earnings may have peaked, after bellwethers including Caterpillar flagged concerns about rising costs.
"Though we've come out of great earnings and economic news has been decent enough, for one to think equity prices should move higher, market participants don't seem to believe that they're being given enough good news," Luschini said.
Caterpillar was down 2.1 percent after BofA Merrill Lynch downgraded the stock to "neutral", citing slowing retail sales and peaking Class 8 truck orders.
Kraft Heinz rose 2.8percent after its quarterly profit beat expectations, benefiting from U.S. tax changes and price hikes to counter higher input costs.
(Reporting by Sruthi Shankar in Bengaluru; Editing by Shounak Dasgupta)



UPDATE 5-Oil slips as OPEC, Iran worries bump against U.S. output - Reuters News 
03-May-2018 07:37:29 PM 
Potential of new U.S. sanctions against Iran keep market on edge
OPEC cuts bolstered by Venezuelan declines 
U.S. crude oil production hits record high of 10.62 mln bpd
Analysts expect U.S. oil production to rise further
Recasts, updates prices
By Libby George
LONDON, May 3 (Reuters) - Oil prices slipped on Thursday as swelling U.S. crude inventories and record weekly U.S. production clashed with OPEC supply cuts and the potential for new U.S. sanctions against Iran.
Prices have seesawed, edging lower during Asian trading hours, then higher at the start of the day in Europe, as the market grappled with conflicting fundamental signals. 
On Wednesday, a report from the U.S. Energy Information Administration (EIA) showed a 6.2-million-barrel jump in U.S. crude inventories.
But bullish factors, including an increase in Saudi Arabia's official oil selling price to Asia, also underpinned prices, according to Commerzbank analyst Carsten Fritsch. 
"It may signal stronger-than-expected demand in Asia," Fritsch said. "This, combined with constraints in (OPEC) production, could lead to higher prices."
State-owned producer Saudi Aramco on Wednesday raised the June price for its Arab Light grade for Asian customers to a premium of $1.90 a barrel to the Oman/Dubai average, the highest since August 2014.
Additionally, the latest Reuters survey of OPEC production showed it pumped around 32 million barrels per day (bpd) in April, slightly below its target of 32.5 million bpd, due largely to plunging output in Venezuela.
Fritsch said the cuts, along with demand growth, were more than offsetting the increase in U.S. oil. 
U.S. oil production rose to a record of 10.62 million bpd, putting it ahead of Saudi Arabia, the biggest OPEC producer.

Only Russia pumps more, at around 11 million bpd.

U.S. drilling for new production is also increasing, encouraged by rising prices following OPEC's production curbs.

The May 12 deadline for U.S. President Donald Trump to decide whether to continue waiving U.S. sanctions against Iran was also buffeting downward pressure on prices. 
"Overall, we continue to trade a waiting game for the U.S. decision on Iran, waiting to have sanction headlines trigger some frenzied buying," said Olivier Jakob, managing director of energy consultancy PetroMatrix. 
Trump has all but decided to withdraw from the 2015 Iran nuclear accord by May 12, sources said, though exactly how he will do so remains unclear.
Iran re-emerged as a major oil exporter in January 2016 when international sanctions against Tehran were suspended in return for curbs on Iran's nuclear programme.
(Additional reporting by Henning Gloystein in Singapore; editing by Jason Neely and Adrian Croft)



China opens iron ore market to the world in pricing, image push - Reuters News 
03-May-2018 01:06:07 PM 
China to allow foreign investors in iron ore futures from Friday
Trading volumes on Dalian were 20 times global iron ore trade
But it has become a magnet for heavy speculative trades
Traders say it should boost arbitrage opportunities with SGX
By Manolo Serapio Jr and Muyu Xu
MANILA/BEIJING, May 3 (Reuters) - China opens trade in Dalian iron ore futures to foreign investors from Friday, aiming to boost its pricing clout for one of its top imports and hoping traders will take a market notorious for retail speculators more seriously. 
Iron ore is the second commodity China is opening to outside investors after launching crude oil futures in late March. Unlike crude oil, though, the iron ore contract on the Dalian Commodity Exchange (DCE) - launched in 2013 - has a deep pool of liquidity and major Western traders have already had access through local Chinese entities. 
With trading volumes last year that reached 20 times global iron ore trade, and 25 times volumes done in rival contracts on the Singapore Exchange, iron ore futures in China regularly sway benchmark spot pricing. Giving foreign investors direct access can only boost that influence. 
"DCE will always be a leading indicator. It has been and will always be (because of) the sheer volume of it," said Kelly Teoh, an iron ore derivatives broker at Clarkson Asia Pte Ltd.
Global commodity traders including Glencore, Trafigura and Cargill already trade Dalian futures via China-registered units, sources with knowledge of their participation say. 
Cargill said it has been trading DCE's iron ore futures since the contract launch, using it as a price reference to manage its own inventory risk. 
"The internationalization of the DCE iron ore contracts will give greater access to the global commodity community to trade in the world's biggest onshore ferrous market," Lee Kirk, managing director at Cargill Metals, said in an email. 
More global players on the DCE should lead to "more efficient pricing and increased liquidity," he said.
Officials for Trafigura and Glencore declined to comment. 
Twenty-one foreign trading agencies have so far registered at the DCE, according to the China Securities Journal, the official publication of China's top securities regulator, although the DCE has declined to name the agencies. 
The move should also boost arbitrage opportunities between Dalian and Singapore, said William Chin, head of commodities at the Singapore Exchange. 
It "will make it easier for foreign participants to take advantage of price movements across both exchanges," he said. 

MASSIVE VOLUMES
Unlike oil, gold and copper, for which prices are set in London and New York, iron ore is one of the few commodities whose global pricing takes its cue from China. 
With massive volumes of iron ore futures traded on the Dalian exchange, prices there virtually dictate the path for the physical market. In 2017, Dalian iron ore volumes reached nearly 33 billion tonnes versus global annual trade of about 1.5 billion tonnes. 
The huge volumes make the DCE a magnet for speculative retail investors, who have triggered wild price swings and prompted regulators to impose trading curbs over the past two years. 
Nev Power, former boss of world No. 4 iron ore miner Fortescue Metals Group, had criticised the speculative trade on Dalian, saying producers and users should be the main participants. 
Fortescue's new CEO, Elizabeth Gaines, who took over in February, said "it remains to be seen what impact (the internationalisation) will have on speculative trading and volatility in the market." 
"We ... support pricing mechanisms which accurately reflect supply and demand for iron ore and provide certainty for the industry," Gaines said in an email. 
Miners such as Vale, Rio Tinto, BHP Billiton and Fortescue typically don't hedge or fix prices for future sales because that means their earnings can be lower if prices increase. 
"We will have to wait and see how this develops as there has been limited use so far by the miners to hedge on SGX," said Jamie Pearce, head of commodity derivatives at SSY Futures. 
But even if miners don't join the fray, DCE's internationalisation is expected to boost its image as a venue for price discovery, participants say. 
"I expect China's iron ore futures market will be more mature and rational when more foreign investors enter the Chinese market," said Jacky Wang, chairman of Shanghai LC Assets Management Co Ltd. 
(Reporting by Manolo Serapio Jr. in MANILA and Muyu Xu in BEIJING; Writing by Manolo Serapio Jr.; Editing by Tom Hogue)



Copper market in 33,000 tonnes surplus in Jan 2018 - ICSG - Reuters News 
03-May-2018 06:47:39 PM 
LONDON, May 3, The global world refined copper market showed a 33,000 tonnes surplus in January, compared with a 14,000 tonnes surplus in December, the International Copper Study Group (ICSG) said in its latest monthly bulletin. For the first month of the year, the market was in a 33,000 tonnes surplus compared with a 37,000 tonnes surplus in the same period a year earlier, the ICSG said. World refined copper output in January was 2.05 million tonnes , while consumption was 2.02 million tonnes. Bonded stocks of copper in China showed a 28,000 tonnes surplus in January compared with a 11,000 tonnes deficit in December.



PRECIOUS-Gold climbs on Fed meeting and geopolitics - Reuters News 
03-May-2018 08:36:42 PM 
Spot gold needs to break above $1,322 -analyst
U.S. delegation in Beijing on Thursday and Friday
(Adds Julius Baer analyst, updates prices)
By Eric Onstad
LONDON, May 3 (Reuters) - Gold prices gained on Thursday after the U.S. central bank reassured investors that increases to interest rates would be gradual, with geopolitical uncertainties also providing support.
Spot gold rose for a second session, firming by 0.9 percent to $1,316.63 an ounce by 1225 GMT, while U.S. gold futures for June delivery added 0.9 percent to $1,317.30.
The U.S. Federal Reserve said that inflation on a 12-month basis was "expected to run near the committee's symmetric 2 percent objective".
"Yesterday's FOMC meeting didn't spark much fireworks, but it eased concerns over whether the Fed was going to stick to its gradual tightening policy, which I believe they are," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"The key change is they added the word 'symmetric', which was taken as a sign that they would allow inflation to overshoot, which is positive for gold."
Gold is highly sensitive to rising U.S. interest rates because it becomes less attractive compared with interest-bearing assets.
Julius Baer economists expect the Fed to shift its guidance to four rate hikes this year, from three, which will weigh on gold, said Carsten Menke, commodities analyst at the Swiss bank.
"Rising rates and a temporarily stronger dollar should bring sufficient headwinds to push prices below $1,300 over the coming months," he added.
Uncertainties were providing a supportive background for bullion, including U.S.-China trade talks and the potential U.S. withdrawal from the Iranian nuclear accord.
"Safe-haven buying has been absent of late ... But there have been some signals for the past few days that the (U.S.-China) negotiations won't be as smooth as expected. That would definitely be a focus, particularly now we have got past the FOMC meeting," said ANZ analyst Daniel Hynes.
Meanwhile, gold demand has made its weakest start to a year since 2008, the World Gold Council said on Thursday, with stagnant prices and the threat of rising interest rates leading investors to seek better returns elsewhere.
Among other precious metals, spot silver rose 1.1 percent to $16.53 an ounce, platinum climbed by 1.6 percent to $903.80 and palladium was up 1.2 percent at $971.20.

(Additional reporting by Eileen Soreng in Bengaluru Editing by David Goodman) 



METALS-Copper touches one-week high as dollar slips from four-month peak - Reuters News 
03-May-2018 08:51:53 PM 
Recasts, updates prices
By Zandi Shabalala
LONDON, May 3 (Reuters) - Copper rose on Thursday on a weaker dollar and as the market awaited cues from China-U.S. trade talks that have started in Beijing.
The world's two biggest economies have imposed import tariffs on each other's goods, including Chinese aluminium and U.S. aluminium scrap, and threatened more action in a trade dispute that has roiled metals markets.
Copper added 0.8 percent to $6,873 a tonne in official rings, close to one-week highs and marking the second straight session of gains.
"The dollar is a little weaker this morning, meaning higher metal prices, and that is what we see across the board in precious metals as well," said Julius Baer analyst Carsten Menke.
He added that trade talks between China and the United States could drag on for weeks and that the first round of talks are unlikely to yield much.

TRADE: A U.S. trade delegation arrived in Beijing on Thursday for tariffs talks, with Chinese state media saying that China will stand up to U.S. bullying if needed but that it is better to work things out at the negotiating table.
DOLLAR: The dollar index edged 0.1 percent lower, slipping from four-month highs. A weaker U.S. currency makes dollar-denominated commodities such as zinc cheaper for non-U.S. firms, which could boost demand. 
ZINC: Benchmark zinc touched a low of $3,034 a tonne but in official trading was down 0.1 percent at $3,043.
STOCKS: Headline inventories of zinc in LME-approved warehouses dropped by 225 tonnes to 236,775 tonnes. The amount of cancelled inventory - stock earmarked for delivery - was very low at 5.6 percent, LME data showed. 
ZINC TREATMENT CHARGES: The zinc industry agreed a 15 percent drop in annual zinc processing fees to $147 a tonne, miner and metals smelting company Nyrstar said, with supply dwindling in a tight market.
GLENCORE: The miner and trader said that copper output in its first quarter rose 7 percent to 345,000 tonnes and that the ramp-up of its Katanga cobalt and copper mine in the Democratic Republic of Congo was on track.
RIO TINTO: Rio Tinto's majority-owned aluminium smelter in New Zealand is expanding output after securing a new energy deal, the plant said this week, as a recovery in the price of the metal boosts interest among global producers. 
RUSAL: The chairman of En+ Group on Wednesday said he was working on implementing a plan that En+ hopes will lead to the United States lifting sanctions on the company, the biggest shareholder in aluminium giant Rusal.
PRICES: Aluminium was bid 0.8 percent higher at $2,340 a tonne, lead was bid up 0.4 percent at $2,278, tin was bid at a steady $21,110 and nickel was bid up 2.5 percent at $14,335.
(Additional reporting by Tom Daly 
Editing by Jason Neely and David Goodman)



CBOT Trends-Wheat down 5-6 cents, corn steady-down 1, soybeans mixed - Reuters News 
03-May-2018 09:29:38 PM 
CHICAGO, May 3 (Reuters) - Following are U.S. trade expectations for the resumption of grain and soy complex trading at the Chicago Board of Trade at 8:30 a.m. CDT (1330 GMT) on Thursday. 

WHEAT - Down 5 to 6 cents per bushel 
Wheat lower on profit-taking a day after the benchmark CBOT July soft red winter wheat contract reached a near nine-month top, and on beneficial rains in parts of the U.S. Plains winter wheat belt.
The USDA reported export sales of U.S. wheat in the week to April 26 at 445,100 tonnes (old and new crop years combined), in line with trade expectations.
Yield prospects for hard red winter wheat in southwest Kansas were estimated at 35.2 bushels per acre, the smallest since 2015, scouts on the second day of an annual three-day crop tour said Wednesday.
Saudi Arabia's main state wheat buying agency issued an international tender to purchase 540,000 tonnes of hard wheat.
The CBOT reported no May wheat deliveries and 86 K.C. May wheat deliveries. The MGEX reported no May spring wheat deliveries. 
CBOT July soft red winter wheat last traded down 5 cents at $5.21-3/4 per bushel. K.C. July hard red winter wheat was last down 4-1/2 cents at $5.50-3/4 and MGEX July spring wheat  was down 4-3/4 cents at $6.19-3/4 a bushel.
CORN - Steady to down 1 cent per bushel
Corn steady to lower, with the CBOT July contract consolidating near Tuesday's near nine-month high. Market underpinned by strong weekly export sales and worries about dry conditions stressing Brazil's second-crop corn. Rains in the Midwest in the last day should slow planting progress but offer welcome soil moisture.
The USDA reported export sales of U.S. corn in the week to April 26 at 1,069,200 tonnes (old and new crop years combined), in line with trade expectations.
The CBOT reported 478 deliveries against May corn futures. 
CBOT July corn last traded unchanged at $4.05 a bushel.
SOYBEANS - Mixed, down 1 cent per bushel to up 1
Soybeans mixed, seeking direction. Rains in the Midwest in the last day should slow planting progress but offer welcome soil moisture.
The USDA reported export sales of U.S. soybeans in the week to April 26 at 886,200 tonnes (old and new crop years combined), in line with trade expectations for 450,000 to 950,000 tonnes.
Through its daily reporting system, the USDA said private exporters sold 30,000 tonnes of U.S. soyoil to Peru.
China is taking extra efforts to increase its soybean output this year amid an ongoing trade spat with the United States that threatens to curb imports from its second supplier.
Deliveries against CBOT May soybeans totaled 68 contracts. The CBOT reported four May soymeal deliveries and 280 May soyoil deliveries. 
CBOT July soybeans last traded down 1/4 cent at $10.42-3/4 per bushel.

(Reporting by Julie Ingwersen)

Stock & Commodities Related News.

GLOBAL MARKETS-Asia shares stricken by trade tension, dollar holds gains - Reuters News 
03-May-2018 11:43:59 AM 
Most Asia share markets slip before Sino-US trade discussions
Dollar just off multi-month highs as Fed stays the course
Oil prices ease as inventories swell, Iran decision looms 
By Wayne Cole
SYDNEY, May 3 (Reuters) - Asian shares slipped on Thursday as hopes waned for real progress in Sino-U.S. trade talks, while the U.S. dollar consolidated recent bumper gains after the Federal Reserve reaffirmed the outlook for more rate hikes.
Souring the mood were reports the Trump administration is considering executive action to restrict some Chinese companies' ability to sell telecoms equipment in the United States. 
Talks between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are due to kick off later on Thursday.
However, a breakthrough was viewed as highly unlikely, especially as the U.S. embassy said their delegation would leave as early as Friday evening.
MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.5 percent, while South Korean stocks eased 0.4 percent.
Chinese blue chips lost 0.1 percent to be not far from an eight-month low hit in April. Japan's Nikkei was closed for a holiday, while E-Mini futures for the S&P 500 barely budged.
Wall Street had wobbled on Wednesday as the threat of U.S. restrictions on Chinese telecom companies fuelled investor concerns about worsening trade relations.
The Dow ended down 0.72 percent. The S&P 500 also lost 0.72 percent and the Nasdaq 0.42 percent.
The Fed policy meeting ended with no change, as expected, while the central bank expressed confidence a recent rise in inflation to near target would be sustained, leaving it on track to raise borrowing costs in June.
"The statement carried only modest changes in wording, but they were meaningful nonetheless, highlighting that the Fed is optimistic on the outlook and intent on continuing to raise rates at a gradual pace," said Westpac analyst Elliot Clarke.
Yet the Fed also emphasised the inflation target was "symmetric", suggesting it was not inclined to speed up its tightening plans.
"The Fed sees little reason to be concerned with inflation marginally above its 2.0 percent target, particularly after such a long period of underperformance," Clarke said.
Westpac, like the market, expects two more hikes this year.

TRUMP TO END IRAN DEAL?
The Fed statement was not quite as hawkish as some had wagered on and caused a dip in the dollar, though sentiment remained bullish given U.S. rates were still clearly heading higher while those in Europe and Japan lagged far behind.
The euro was last at $1.1979 having hit a 15-week trough at $1.1936 on Wednesday, uncomfortably close to the low for the year at $1.1915.
The dollar also scored a three-month peak on the yen at 110.05 overnight, before edging back to 109.66.
Against a basket of currencies, the dollar index was trading at 92.542, after reaching the highest since late December at 92.834.
In the Treasury market, yields dipped slightly as a quarterly refunding programme of $73 billion came in short of expectations, reducing the pressure on prices from the torrent of supply.
Oil prices slipped on swelling U.S. crude inventories and as investors remained cautious ahead of the May 12 deadline for the U.S. to ratify the Iran nuclear deal.
Reuters reported President Donald Trump has all but decided to withdraw from the 2015 Iran nuclear accord but exactly how he will do so remains unclear.
Brent crude futures fell 16 cents to $73.20 a barrel, while U.S. crude dropped 9 cents to $67.84. 
(Editing by Shri Navaratnam and Richard Borsuk)



UPDATE 3-Oil prices dip on rising U.S. crude inventories, record production - Reuters News 
03-May-2018 03:07:36 PM 
U.S. crude inventories rise to 2018 high of 436 mln barrels
U.S. crude oil production hits record high of 10.62 mln bpd
Analysts expect U.S. oil production to rise further still
OPEC output broadly inline with production cut targets
Potential of new U.S. sanctions against Iran keep market on edge
Adds U.S./Iran dispute, graphic, updates prices
By Henning Gloystein
SINGAPORE, May 3 (Reuters) - Oil dipped on Thursday, weighed down by swelling U.S. crude inventories and record weekly U.S. production that undermined efforts by OPEC to cut supplies, although potential new U.S. sanctions against Iran kept markets on the edge.
Brent crude oil futures were at $73.31 per barrel at 0654 GMT, down 5 cents from their last close.
U.S. West Texas Intermediate (WTI) crude futures were down just 1 cent at $67.92 per barrel.
Prices were pulled down by a report from the U.S. Energy Information Administration (EIA) on Wednesday showing U.S. crude inventories jumped by 6.2 million barrels to 435.96 million barrels in the week to April 27, the highest level in 2018.

"The (EIA) report showed a much larger than expected crude build for last week as well as an unexpected build in gasoline inventories," said William O'Loughlin, investment analyst at Australia's Rivkin Securities.
U.S. oil production also rose to a record of 10.62 million barrels per day (bpd), a jump of more than a quarter since mid-2016.
The United States now produces more crude than top exporter and Saudi Arabia, the biggest producer in the Organization of the Petroleum Exporting Countries (OPEC).
Only Russia pumps more, at around 11 million bpd.
The United States could surpass that level soon too, as oil firms have ramped up January to May production faster than at any other time in at least half a decade, Thomson Reuters Eikon data shows.

U.S. drilling for new production is increasing, encouraged by rising prices following OPEC's production curbs.

State-owned producer Saudi Aramco said on Wednesday it has raised the June price for its Arab Light grade for Asian customers by 70 cents a barrel versus May to a premium of $1.90 a barrel to the Oman/Dubai average, the highest since August 2014.
Overall, OPEC produced around 32 million bpd of crude in April, according to a Reuters survey, implying that its production is slightly below its target of 32.5 million bpd, due largely to plunging output in Venezuela.
BMI Research said it expects OPEC's output to remain stable around or slightly above 32 million bpd for the rest of the year.
Looming over markets, however, is the May 12 deadline by when U.S. President Donald Trump is due to decide whether or not to continue waiving U.S. sanctions against Iran.
Trump has all but decided to withdraw from the 2015 Iran nuclear accord by May 12 but exactly how he will do so remains unclear, two White House officials and a source familiar with the administration's internal debate said on Wednesday.
OPEC-member Iran re-emerged as a major oil exporter in January 2016 when international sanctions against Tehran were suspended in return for curbs on Iran's nuclear programme.

(Reporting by Henning Gloystein; Editing Christian Schmollinger and Richard Pullin)



Gold demand posts weakest start to the year since 2008 -WGC - Reuters News 
03-May-2018 12:00:00 PM 
Global gold demand falls 7 pct in Q1 to 973.5 T
Buying of gold exchange-traded funds down 66 pct
Chinese coin, bar demand slides by a quarter
By Jan Harvey
LONDON, May 3 (Reuters) - Gold demand posted its weakest start to the year in a decade, the World Gold Council said on Thursday, as prices of the metal stagnated and the threat of rising interest rates led investors to seek better returns elsewhere. 
Global gold demand totalled 973.5 tonnes in the January to March period, down 7 percent year on year and the weakest first quarter since 2008. That coincided with a period of calm in the gold market, which saw prices hold within their narrowest range of any quarter in more than a decade. 
"The rangebound gold price has certainly had an effect on investor sentiment," the WGC's head of market intelligence Alistair Hewitt said. 
"It works both ways - for people in the retail space, a price drop can be an entry point, and if the price is rising, people want to take advantage of that momentum." 
The biggest drop in demand came from the investment sector, with bar and coin consumption down by 15 percent and buying of gold-backed exchange-traded funds two-thirds lower year on year. 
Jewellery consumption was also soft, edging down 1 percent. Buying in India, the second biggest gold jewellery consumer after China, posted its third weakest quarter in a decade, falling 12 percent year on year to just under 88 tonnes. 
"A weakening rupee really pushed up the local gold price," Hewitt said. "You also had far fewer auspicious days. In Q1 last year, you had 22, and in Q1 2018 you just had seven. Auspicious days are important for weddings, and weddings are important for jewellery demand." 
Chinese jewellery demand rose 7 percent to 188 tonnes, which Hewitt attributed to strong seasonal buying and a better product range. "It really stems from (jewellers) becoming better at meeting the needs of the Chinese millennials," he said. "We're seeing more 18 carat jewellery, more 22 carat jewellery, better designs, better products."
Coin and bar demand in China was down 26 percent, however.
Central bank demand was 42 percent higher, and close to its quarterly average over the previous seven years. Russia was the biggest official sector buyer, responsible for just over a third of central bank demand. Turkey and Kazakhstan also added to reserves. 
On the other side of the market, mine supply grew 1 percent year on year to 770 tonnes. Added to a return of producer hedging - which sees mining companies selling production forward to lock in prices - that helped lift overall supply by 3 percent to 1,063.5 tonnes. 

GOLD DEMAND (T)*
Q1 2018 Q1 2017
Jewellery 487.7 491.6
Technology 82.1 78.9
Investment 287.3 394.2
- Bar and coin) (254.9) (298.2)
- ETFs and similar) (32.4) (96.0)
Central banks 116.5 82.2
TOTAL 973.5 1,046.8

* World Gold Council, Gold Demand Trends Q1 2018

(Reporting by Jan Harvey; editing by David Evans)


PRECIOUS-Gold extends gains; all eyes on U.S.-China trade talks - Reuters News 
03-May-2018 03:24:02 PM 
Spot gold may bounce again towards $1,317/oz - Technicals
U.S. delegation in Beijing on Thursday and Friday
(Updates prices)
By Eileen Soreng
BENGALURU, May 3(Reuters) - Gold prices rose for a second session on Thursday after the U.S. Federal Reserve held interest rates steady as expected at the end of a two-day policy meeting, while investors awaited U.S.-China trade talks.
Spot gold rose 0.2 percent to $1,307.05 per ounce at 0705 GMT. U.S. gold futures for June delivery rose 0.2 percent to $1,307.60 per ounce.
"The inflation numbers this week did point to a potential acceleration in those (interest) rate hikes... But after the FOMC meeting yesterday that appears to be less likely and so we're seeing assets such as gold being bought at the back of that," said ANZ analyst Daniel Hynes.
Non-yielding gold is highly sensitive to rising U.S. interest rates as it becomes less attractive compared with assets that bear interest.
The Fed left its benchmark interest rates unchanged in a target range of between 1.50 percent and 1.75 percent. The central bank raised rates in March and forecasts another two increases this year.
Investors also awaited the U.S.-China trade talks between U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He due on Thursday.
"Safe-haven buying has been absent, of late... But there have been some signals for the past few days that the negotiations won't be as smooth as expected so that would definitely be a focus, particularly now that we have gotten past the FOMC meeting," Hynes added.
A breakthrough deal to fundamentally change China's economic policies is viewed as highly unlikely during the two-day meet, though a package of short-term Chinese measures could delay a U.S. decision to impose tariffs on $50 billion worth of Chinese exports.
Asian shares slipped on Thursday as hopes waned for real progress in U.S.-China trade talks, while the U.S. dollar consolidated recent bumper gains after the Federal Reserve reaffirmed the outlook for more rate hikes this year. 
Spot gold may bounce again towards a resistance at $1,317 per ounce as it has found a strong support at $1,302, according to Reuters technical analyst Wang Tao.
Meanwhile, gold demand posted its weakest start to the year in a decade, the World Gold Council said on Thursday, as prices of the metal stagnated and the threat of rising interest rates led investors to seek better returns elsewhere.
Among other precious metals, spot silver rose 0.2 percent to $16.38 per ounce.
Platinum climbed 0.4 percent to $893.74 per ounce, while palladium was up 0.5 percent to $964.50 per ounce.

(Reporting by Eileen Soreng in Bengaluru; Editing Sherry Jacob-Phillips and Sunil Nair) 




TECHNICALS-CBOT wheat may test support at $5.17-1/2 - Reuters News 
03-May-2018 03:13:02 PM 
SINGAPORE, May 3 (Reuters) - CBOT July wheat may test a support at $5.17-1/2 per bushel, as it has failed to break a resistance at $5.31-1/4.
The resistance is provided by the 76.4 percent projection level of an upward wave C from $4.59. Working together with the resistance is another one at $5.31-3/4, the March 2 high.
It is not very clear how deep the current correction will be, while a break below $5.17-1/2 could confirm that it would extend towards $5.06-1/4.
A break above $5.31-1/4 could open the way towards the range of $5.40-3/4 to $5.53-3/4.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **
(Reporting by Wang Tao; Editing by Vyas Mohan) 



TECHNICALS-CBOT corn may hover below $4.06 - Reuters News 
03-May-2018 02:54:33 PM 
SINGAPORE, May 3 (Reuters) - CBOT July corn faces a resistance at $4.06 per bushel. It may hover below this level or retrace towards a support at $4.01.
The resistance is identified as the 61.8 percent projection level of an upward wave C from $3.81. A break above this level could lead to a gain to $4.12.
A wedge developing from the March 13 high of $4.03 has been confirmed, suggesting a target around $4.16. The resistance at $4.06 may have triggered the second pullback towards the upper trendline of the pattern. This pullback could end around $4.01.

** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **

(Reporting by Wang Tao; Editing by Biju Dwarakanath) 



TECHNICALS-CBOT soybeans may hover above $10.36-1/4 - Reuters News 
03-May-2018 02:39:53 PM 
SINGAPORE, May 3 (Reuters) - CBOT soybeans July contract found a support around $10.36-1/4 per bushel. It may hover above this level for one or two days or bounce towards a resistance at $10.55-1/2.
The support and the resistance are identified respectively as the 61.8 percent and the 23.6 percent Fibonacci projection levels of downward wave c from $10.67-1/2.
Working together with this support is another similar one established by a rising trendline. The longer the contract hovers above $10.36-1/4, the more unlikely it will break this level.
A break could cause a loss into the range of $10.17-1/4 to $10.29.
** Wang Tao is a Reuters market analyst for commodities and energy technicals. The views expressed are his own.
No information in this analysis should be considered as being business, financial or legal advice. Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses. **

(Reporting by Wang Tao; Editing by Sherry Jacob-Phillips) 



FOREX-Euro bounces off 4-month low, dollar bulls pause after Fed meeting - Reuters News 
03-May-2018 03:41:35 PM 
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Euro rises back towards $1.20
Dollar slips slightly after Fed policy decision
Commodity-linked currencies recover
By Tommy Wilkes
LONDON, May 3 (Reuters) - The euro rose off four-month lows on Thursday as the dollar's recent rally came to a halt after the Federal Reserve did little to alter market expectations for further interest rate rises this year.
Expectations of faster-than-expected rate rises in the U.S., as well as a rapid covering of positions by investors short on the dollar, has sent the greenback to its strongest level since mid-January.
But the Fed left its benchmark overnight lending rate in a target range of between 1.50 percent and 1.75 percent as had been widely expected on Wednesday.
Analysts interpreted its comments on inflation as a signal the Fed may allow prices rises beyond its target, a stance that would limit the need for the central bank to embark on a more aggressive path of monetary tightening in response to recent rises in inflation.
On Thursday the dollar index, measured against a basket of currencies, was flat was the euro rose 0.3 percent to $1.1983, off the low of $1.1938 it fell to on Wednesday.
"In the end it was not a major surprise for the market that the Fed left the key rate unchanged at the meeting without a press conference but made positive comments on the outlook and further rate hikes," Commerzbank analysts said in a note.
"The market will have to get used to the fact that in order to prevent an economic overheating interest rates in the U.S. will continue to rise," they said, predicting that rate differentials between countries would have an increased bearing on currencies and could cement euro/dollar at around $1.20. 
With the Fed's meeting out of the way, focus is shifting to U.S. jobs data due on Friday for further indications of the strength of the economy and inflation pressures.
A near-term focus for the common currency is euro zone inflation data due later on Thursday, said Mitul Kotecha, senior EM strategist for TD Securities in Singapore.
The euro could come under pressure if the data shows a slowdown in core inflation in the euro zone, Kotecha said, adding that the dollar could see further gains, at least in the near term.
The dollar has been buoyed in recent weeks by the strong U.S. economic outlook and rising Treasury yields amid signs of a relative slowdown in some other developed economies, such as those in Europe.
The dollar eased 0.1 percent to 109.68 yen, inching away from a three-month peak of 110.05 yen set on Wednesday.
Elsewhere, Norway's central bank gives its policy decision at 0800 BST, with any sign of hawkishness from the central bank set to push the crown higher. The crown has benefited from rising oil prices this year.
Commodity-linked currencies like the Canadian and Australian dollars gained sharply, with the latter rising 0.4 percent to $0.7523 cents after data showing a better-than-expected jump in the country's trade surplus for March.
The Aussie dropped to as week as $0.7473 earlier this week to hit its lowest since mid-2017.
(Additional reporting by Masayuki Kitano in SINGAPORE
Editing by Raissa Kasolowsky)