OVERNIGHT

Asian stocks along with gold was down as investors started to digest the possibility of a June interest rate hike by the Fed while the dollar rallied Thursday. The prospect to higher interest rates is usually a negative for gold as is a stronger dollar.

The South Korean Kospi shed 0.5% and the Australian market joined in the downturn giving up 0.6% while the MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.8%. Gold isn't the only investment hurt by a stronger dollar as emerging markets have to go through the dollar for many of their transactions as many commodities go through the greenback one of which is oil also down.

The yen hit a three week low against the dollar given the outlook for a possible rate hike in June by the Fed partly on the basis of  the weaker yen only to later give some of its early gains back. According to a Reuters report here is what the Fed notes said:

The Fed minutes noted Fed officials said it would be appropriate to raise interest rates in June if economic data points to stronger second-quarter growth as well as firming inflation and employment. Up to this point many investors had discounted any such Fed action and were no doubt caught off guard.

China and its struggles continue to weigh on markets as it proved to be for years the big fat whale swimming past that everyone came to count on for their sustenance. The dollar index, DYX, stayed just below a a seven-week high of 95.27.  

The Wall Street Journal reported:

SINGAPORE—Expectations that the U.S. could increase interest rates in June drove the dollar sharply higher against major Asian currencies Thursday, with the Chinese yuan at its weakest level since February and the Japanese yen giving up much of its recent strength.
The U.S. dollar index rallied to a two-month high, as the market was caught off-guard by the hawkishness of the Federal Reserve, which concluded that a rate increase in June was a distinct possibility, according to minutes of their April policy meeting released in the U.S. on Wednesday.

Many traders had earlier discounted the possibility of an interest-rate increase in June, but the latest Fed minutes, along with a batch of strong economic data, have changed that view.
Asian currencies are falling to multi-month lows as traders adjusted positions to reflect the interest-rate expectations. The Indonesian rupiah hit a three-month low, as did Thailand’s baht, while the South Korea won, the Philippine peso and the Singapore dollar hit two-month troughs versus the U.S. unit.

High-yield currencies in emerging markets are likely to be vulnerable to further weakness, said Tareck Horchani, senior sales trader at Saxo Capital Markets in Singapore.