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Gold set for worst week since March, pressured by high yields

· Gold fell on Friday, on track for its worst week since March, as an uptick in U.S. Treasury yields and a logjam over a U.S. stimulus bill to help the coronavirus-hit economy dented the metal's allure.

· Spot gold dipped 0.5% to $1,943.18 per ounce by 2:02 p.m. EDT (1453 GMT) and U.S. gold futures settled down 1% at $1,949.80.

· After hitting a record peak of $2,072.50 on Aug. 7 and rising over the previous nine weeks, bullion declined 4.5% this week.

· "The gold market had been in a parabolic state, so when you throw a little pickup in yields along with the impasse on the stimulus bill, it was going to see a bit of a retracement," said David Meger, director of metals trading at High Ridge Futures.

"We might have gone a little too far, too fast, and we believe the market is in need of a pause, a consolidation. And that's exactly what we are seeing."

· Poor economic data from far and wide, including disappointing U.S. retail sales, also did not help safe-haven gold.

· The benchmark U.S. 10-year Treasury yield hovered near seven-week highs, while hopes for a fresh round of U.S. coronavirus relief faded as Congress went into recess.

Higher yields increase the opportunity cost of holding non-yielding assets such as bullion, which has climbed over 28% so far this year.

· "We're going to hit the all-time highs again on the likelihood of a substantial stimulus package and the possibility of chaos around the election is going to drive people into a flight to safety," said Jeffrey Sica, founder of Circle Squared Alternative Investments.

· Among other metals, silver shed 4.7% to $26.24 per ounce, set to snap a nine-week winning streak, down 7.2% so far.

· Platinum fell 1.6% to $941.79 and palladium eased 2.4% to $1,949.40.

· U.S. manufacturing output rises strongly in July, but still below pre-pandemic levels

U.S. factory output increased more than expected in July, boosted by a surge in motor vehicle production, though activity remained below its pre-COVID-19 pandemic peak.

The Federal Reserve said on Friday that manufacturing production rose 3.4% last month after advancing 7.4% in June. The third straight monthly gain left factory output about 8% below its level in February. Economists polled by Reuters had forecast manufacturing output would increase 3.0% in July.

While businesses have reopened, new coronavirus cases continue to spread across the country, keeping a lid on demand.

· Trump says ready to move on coronavirus aid, blames Democrats for holdup

President Donald Trump said on Friday that he is ready to move stimulus money into a U.S. economy hard hit by the coronavirus crisis, but blamed Democrats for holding up a deal in talks that broke down a week ago.

The Republican-led Senate and Democratic-controlled House of Representatives went into an informal recess after last week’s negotiations ended with the parties $2 trillion apart. However, the leaders of both parties said they could recall their members with 24 hours notice if a deal emerged.

At a Friday news conference, Trump said he was prepared to provide Americans with direct payments as well as rental assistance and money for small businesses, state and local governments.

· Democrats step up pressure on postal service cuts ahead of election

U.S. Democrats on Sunday stepped up their efforts to rein in a cost-cutting campaign by President Donald Trump’s appointed postmaster general that has stoked fears about holding up mail-in ballots ahead of the November election.

Top Democrats in Congress called on Postmaster General Louis DeJoy and another top postal official to testify this month at a hearing on a wave of cuts that has slowed mail delivery around the country, alarming lawmakers ahead of the Nov. 3 election when up to half of U.S. voters could cast ballots by mail.

At least six Democratic state attorneys general were in discussions about what legal means they might pursue to stop changes to the Postal Service that could affect the election outcome, the Washington Post reported, citing interviews with multiple attorneys general.

Congressional Democrats called on DeJoy, a Trump donor, and Postal Service Chairman Robert Duncan to testify at an Aug. 24 hearing of the House of Representatives Committee on Oversight and Reform.

DeJoy did not respond to a request for comment.

· Coronavirus Updates:

U.S. coronavirus death toll hits 173,000 ahead of fall flu season

The United States surpassed 173,000 coronavirus deaths on Sunday, according to a Reuters tally, as health officials express concerns over COVID-19 complicating the fall flu season.

Deaths rose by 483 on Sunday, with Florida, Texas and Louisiana, leading the rise in fatalities.

The United States has at least 5.5 million confirmed cases in total of the novel coronavirus, the highest in the world and likely an undercount as the country still has not ramped up testing to the recommended levels. Cases are falling in most states except for Hawaii, South Dakota and Illinois.

France plans masks at work as daily COVID-19 cases surpass 3,000

France is to propose that masks be worn in shared workspaces as the country grapples with a rebound in coronavirus cases that rose again in the past 24 hours to over 3,000.

Italy closes nightclubs as coronavirus cases rise among young

Italy is to shut discos and clubs and make it compulsory to wear a mask outdoors in some areas during the night-time in the first reimposition of restrictions as cases of coronavirus pick up across the country, especially among younger people.

New Zealand's COVID-19 outbreak grows, as Australian cases ease

A new coronavirus outbreak in New Zealand is still growing, health officials said on Sunday, with the country that had an early triumph over the pandemic recording 13 new cases and putting the September general election in question.

After stifling the virus earlier this year before it became a public health crisis and after 102 days without new infections, an abrupt resurgence last week in Auckland prompted an immediate lockdown of the country’s largest city.

Sunday’s numbers bring New Zealand’s total active cases to 69, providing more ammunition to a conservative opposition that wants to delay a Sept. 19 general election, which opinion polls show Prime Minister Jacinda Ardern’s Labour Party winning.

Ardern is expected to resist a delay but has said she will decide by Monday.

In neighbouring Australia, which has also been struggling with a resurgence of the coronavirus in two of its largest states, New South Wales and Victoria, there were signs of a further downward trend.

Mexico president says COVID-19 vaccine expected to be ready early next year

Mexican President Andres Manuel Lopez Obrador expects to be able to put a COVID-19 vaccine into use in the country during the first quarter next year, he said in a video on Twitter on Sunday.

His government has struck a partnership with Argentina and pharmaceutical company AstraZeneca Plc to produce a vaccine for distribution throughout Latin America.

· British home sales hit record after lockdown, Rightmove says

Britons bought and sold a record number of homes between mid July and early August as pent-up demand from the coronavirus lockdown and a desire to leave London bucked the usual summer slowdown, industry data showed on Monday.

Property website Rightmove, which says it is used by 90% of British estate agents, reported the highest number of home sales agreed since it began tracking the data more than 10 years ago, with transactions more than 20% higher than the previous record.

· Peru's economy contracts 18.06% in June on coronavirus impact

Peru’s economy contracted 18.06% in June versus the same period a year earlier, the South American country’s government said on Saturday, the fourth straight month of contraction due to the impact of the novel coronavirus pandemic.

Peru, the world’s no. 2 copper producer, imposed a strict lockdown in March, though has recently looked to reopen key sectors of the economy.

The June drop is less severe than the 18.15% contraction analysts had estimated in a Reuters poll, and a step up from the 32.75% GDP decline in May.

In the first half of the year, the economy contracted 17.37% compared with the same period last year, Peru’s official INEI statistics body said, while it dropped 7.25% in the 12 months to June.

· US-China trade deal review postponed as China ramps up farm, energy purchases

The United States and China have delayed a review of their Phase 1 trade deal initially slated for Saturday, sources familiar with the plans told Reuters, citing scheduling conflicts and the need to allow time for more Chinese purchases of U.S. exports.

No new date for the initial six-month compliance review between U.S. Trade Representative Robert Lighthizer, U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He has been agreed, the sources said.

The officials were expected to hold a videoconference on Saturday, the six-month anniversary of the trade deal’s Feb. 15 entry into force as the coronavirus pandemic began spreading globally.

One source familiar with the talks said the delay was related to a conference of senior Communist Party leaders at the seaside town of Beidaihe on China’s northeast coast. The postponement did not reflect any substantive problem with the trade deal, the source said, adding: “The new date has not been finalized yet.”

· China must guard against rebound in shadow lending, banking regulator warns

China must guard against any rebound in off-balance sheet lending in the so-called shadow banking sector, and must dispose of non-performing assets as soon as possible, the head of the country’s banking and insurance regulator said on Sunday.

· Biggest Thai protest in years puts pressure on government

More than 10,000 Thai protesters chanting “down with dictatorship” and “the country belongs to the people” rallied in Bangkok on Sunday in by far the biggest anti-government demonstration since a 2014 coup.

There were cheers for student calls to curb the monarchy’s powers - once a taboo subject - as well as demands for the departure of former junta leader Prime Minister Prayuth Chan-ocha, a new constitution and an end to the harrasment of opposition activists.

Students have led protests almost daily for the past month, but Sunday’s demonstration drew a broader crowd in the Southeast Asian country, which has experienced decades of protests punctuated by military coups.

“We want a new election and a new parliament from the people,” student activist Patsalawalee Tanakitwiboonpon, 24, told the crowd. “Lastly, our dream is to have a monarchy which is truly under the constitution.”