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Palladium extends record run, gold dips on strong U.S. data

Palladium extended its blistering rally to an all-time high within striking distance of $3,000 on Friday on supply concerns and bets for improving demand, while gold pulled back on strong U.S. economic data.

·         Palladium hit a record high of $2,925.14 per ounce and was poised for a second straight weekly gain. It was up 0.4% to $2,849.18 per ounce.

  

·         Many analysts expect a further run towards $3,000 as automakers ramp up purchases of the metal, worsening a supply shortage. “We’re expected to outstrip supply for multiple years out,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

 

·         Both palladium and platinum are used as emissions reducing catalysts in automobiles but palladium is used more in gasoline engines.

 

·         Platinum climbed 2% to $1,226.93 per ounce and was headed for its best week in six.

 

·         Spot gold , meanwhile, fell 0.4% to $1,777.24 per ounce, giving up initial gains that were driven by a weaker dollar and subdued U.S. yields.

 

·         U.S. gold futures settled 0.2% lower at $1,777.8 per ounce.

 

·         Data showed U.S. factory activity powered ahead in early April, giving a lift to Wall Street, while a rebound in new home sales exceeded expectations in March.

 

·         Although prices were lower on Friday, underlying factors such as safe-haven inflows due to the pandemic, the likelihood of rising inflation, lower interest rates for longer and supportive technicals make the case for holding gold, said Michael Matousek, head trader at U.S. Global Investors.

 

·         Silver fell 0.6% to $26.02 per ounce.

 

·         Over $200 billion wiped off cryptocurrency market in a day as bitcoin plunges below $50,000

 

·         Markets now are looking toward next week’s meeting of the U.S. Federal Reserve to review monetary policy and the economy.

Fed Chair Jerome Powell is expected to echo Thursday’s message from European Central Bank President Christine Lagarde that scaled back some expectations for a withdrawal of monetary easing. Lagarde said talk of the ECB phasing out emergency bond purchases was premature.

Powell’s remarks could put more downward pressure on Treasury yields and limit any bounce of the dollar.

 

·         The Fed is unlikely to hint at policy changes next week, even with a stronger economy

Federal Reserve officials next week are likely to paint a robust picture on the economy while simultaneously not even hinting at policy changes ahead.

Investors increasingly have come to trust central bankers when they say that even with the economy running at its hottest pace in nearly 40 years, they won’t start taking away policy accommodation until it’s clear the recovery is on solid ground.

·         ·         Pivotal U.S. Senate Democrat wants 'more targeted' infrastructure bill

Democratic Senator Joe Manchin on Sunday said he opposes using a maneuver that would enable his party to pass U.S. President Joe Biden's $2.3 trillion infrastructure proposal without Republican support, saying he favors a smaller and "more targeted" bill.

"More targeted," Manchin, a key vote in the closely divided Senate, told CNN's "State of the Union" program, referring to a bill that would incorporate internet broadband, roads and water infrastructure needs.

Asked if he would back another bill with other related spending through a process called reconciliation, Manchin said "no."

 

·         U.S. lifts pause on use of Johnson & Johnson Covid vaccine, clearing way for states to use doses

 

·         European Union will let vaccinated Americans visit this summer – official

 

·         Thailand will slow the issuance of travel documents for foreign nationals from India due to the outbreak of a coronavirus variant called B.1.617, said Taweesin Wisanuyothin, a spokesman for the government's COVID-19 taskforce.

 

·         Hong Kong-Singapore air travel bubble to start on May 26 - Bloomberg News

 

·         Japan promises safe Olympics after unveiling new emergency measures

Japanese Prime Minister Yoshihide Suga on Friday promised to ensure a safe Tokyo Olympics this summer, after announcing a new state of emergency for Tokyo, Osaka and two other prefectures.

The measures will go into effect from April 25 to May 11, raising questions about Japan's ability to host the Olympics amid a resurgent coronavirus.

·         Merkel urges Germans to stick to stricter coronavirus rules

 

·         UK economy set to grow faster than the U.S. this year -Goldman

Britain looks set to see faster economic growth than the United States this year as the country races ahead with its vaccination programme after its slump in 2020, Goldman Sachs said on Sunday.

The bank said in a note to clients that it now expects British gross domestic product to grow by a "striking" 7.8% this year, "above our expectations for the U.S."

A Reuters poll of analysts published on April 13 showed an average forecast for growth of 5.0% in the UK, the world's fifth-biggest economy in 2021. The International Monetary Fund has projected a 5.3% expansion.

But since those forecasts were made there have been signs of an acceleration in the pace of recovery with the country now having given a first coronavirus vaccine to more than half of its total population.

The note did not provide a comparison forecast for U.S. economic growth this year. In February, Goldman said it expected U.S. GDP would grow by 6.8% in 2021 as President Joe Biden pushed ahead with a huge fiscal stimulus programme.

 

·         Biden to visit UK, Belgium for G-7 and NATO meetings in first overseas trip as president

 

·         Israel and Palestinians clash on Gaza border as Jerusalem Ramadan violence flares

 

·         Turkey says it will respond in time to 'outrageous' U.S. genocide statement

U.S. President Joe Biden's declaration that massacres of Armenians in the Ottoman Empire constituted genocide is "simply outrageous" and Turkey will respond over coming months, Turkey's presidential spokesman said on Sunday.

Biden broke on Saturday with decades of carefully calibrated White House comments over the 1915 killings, delighting Armenia and its diaspora but further straining ties between Washington and Ankara, both members of the NATO military alliance.

 

·         ASEAN changed Myanmar statement on release of political detainees - sources

A draft statement circulating the day before a Southeast Asian leaders' summit on the Myanmar crisis included the release of political prisoners as one of its "consensus" points, said three sources familiar with the document.

But in the final statement at the end of Saturday's meeting, the language on freeing political prisoners had been unexpectedly watered down and did not contain a firm call for their release, two of the sources said.