BULLION – Bullion counter may trade on negative path as gold prices slipped to a two-week low on Thursday after the U.S. Federal Reserve delivered a 25-basis-point rate cut as expected but ruled out a lengthy easing cycle, sending the dollar to a two-year peak. Policymakers moved the U.S. central bank’s benchmark overnight lending rate to a target range of 2.00% to 2.25%, citing concerns about the global economy and muted U.S. inflation. However, Fed Chair Jerome Powell, speaking in a news conference after the release of the central bank’s statement, characterized Wednesday’s rate cut as “a mid-cycle adjustment to policy”, a sign to markets that further sharp cuts were not imminent. U.S. Treasuries reacted to Powell’s remarks by flattening the yield curve as the front-end of the market scaled back on prior expectations for at least a 100 basis points of easing in the near-term. U.S. and Chinese negotiators ended a brief round of trade talks on Wednesday with little sign of progress and agreed to meet again in September, prolonging an uneasy truce in a year-long trade war between the world’s two largest economies. The U.S. Mint sold 5,500 ounces of American Eagle gold coins in July, up 10% from the previous month, according to the latest data.
ENERGY– Crude oil may trade on negative path as oil prices fell more than $1 on Thursday, declining for the first time in six days, after the U.S. Federal Reserve dampened hopes for a string of rate cuts and Sino-U.S. trade talks ended without progress. The drop came despite a bigger-than-expected decline in inventories in the U.S. and a drop in crude production among OPEC members, along with Libya cutting exports, typically bullish drivers for the market. Meanwhile, U.S. crude oil stockpiles fell for the seventh straight week, declining to their lowest levels since November even as production rebounded and net imports increased, the Energy Information Administration said on Wednesday. Crude inventories fell 8.5 million barrels in the week ended July 26, far exceeding analysts expectations for a decrease of 2.6 million barrels. Libya state-owned National Oil Corp declared force majeure on loadings of crude from the country largest oil field on Wednesday. U.S. natural gas futures rose 4.5% on Wednesday, recovering from a three-year low touched the previous day as investors covered short positions..
BASE METAL – Base metals may trade on sideways to weaker path. Pressure on China’s factories eased a little in July due to growth-boosting steps from the government, but overall manufacturing activity remained in contraction, a private survey showed on Thursday. London copper prices slipped to a three-week low on Thursday after Federal Reserve Chairman Jerome Powell said the U.S. central bank’s first rate cut since 2008 was not the start of a long easing cycle, while Sino-U.S. trade talks appeared to have made little progress. U.S. and Chinese negotiators ended a round of trade talks with little sign of progress and agreed to meet again in September, prolonging an uneasy truce in a year-long trade war between the world’s top two economies. A Chinese billionaire has been indicted by a grand jury on charges he schemed with the aluminum company he founded to evade $1.8 billion of tariffs by smuggling huge amounts of the metal into the United States, federal prosecutors said on Wednesday.
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