· Gold prices edged higher on Friday due to a pullback in the dollar, though gains were curbed as data showing a rise in US inflation fanned fears of a sooner-than-expected rate hike.
· Spot gold was up 0.2 per cent at $1,829.61 per ounce by 10.26am UAE time. US gold futures rose 0.2 per cent at $1,827.40.
· The metal traded flat for the week.
· The dollar index was down 0.1 per cent against its rivals, making gold cheaper for other currency holders.
· “Inflation is not necessarily bad for gold, however, it’s bad if the central banks start to act on it, and the market is getting a little bit jittery thinking that this could bring forward the US Federal Reserve’s taper a little bit,” Stephen Innes, managing partner at SPI Asset Management, said.
· Key US economic readings this week showed a bigger-than-expected rise in consumer prices and weekly jobless claims dropping to a 14-month low, intensifying concerns over rising inflation and prospects of a rise in interest rates.
· Higher interest rates increase the opportunity cost of holding bullion.
· “Right now we haven’t had any inclination that the Fed is about to move anytime soon, I think gold still remains relatively supported,” Mr Innes said, adding that strong economic data still remains a key concern.
· The US central bank has pledged to keep interest rates low until the economy reaches full employment, and inflation is on track to “moderately” exceed the 2 per cent level for some time.
· “We’ll need some more clarity in terms of how persistent inflation is. If it turns out to be transitory, yields will remain lower,” Harshal Barot, a senior research consultant for South Asia at Metals Focus, said.
· Investors now await US retail sales data due later in the day.
· Elsewhere, palladium gained 1.8 per cent to $2,914.28 per ounce. Silver rose 0.1 per cent to $27.09, while platinum was up 0.9 per cent at $1,216.69.
· Fed's Bullard says its a judgement call on whether inflation is transitory
· Fed's Barkin: Ability to "unclog" labor market critical to recovery
Getting people off the sidelines of the economy and into jobs has become a critical issue in keeping the U.S. recovery on track, Richmond Federal Reserve president Thomas Barkin said Thursday.
"We have frictional challenges matching open jobs to available workers," Barkin said, citing child care challenges, lingering health fears, and the impact of ongoing federal unemployment benefits as challenges. "The question of how to unclog the labor market is going to be a critical one."
· Acceleration in U.S. price growth this year will have “only transitory effects on underlying inflation,” Fed Vice Chair Richard Clarida said Wednesday
· Fed's core PCE inflation concern threshold is 2.8% - economists
The Federal Reserve’s preferred inflation gauge would have to hit a high of 2.8% to discomfort U.S. policymakers, according to a Reuters poll which also suggested the central bank would tolerate that rate for three months at least before it acts.
· Reuters median forecast has the Federal Reserve to begin taper early in 2022
* US core PCE price index at 2.8% would cause discomfort at the Federal Reserve, median forecast of 41 economists shows
* US GDP to grow 6.5% in 2021, 4.1% in 2022 (vs 6.2%, 4.0% in April poll)
* Federal Reserve to start tapering its monthly asset purchases in Q1 2022, said 31 of 51 economists
· Singapore coronavirus cases could burst hopes for Hong Kong travel bubble
A travel bubble between Hong Kong and Singapore set to open on May 26 has a "high chance" of being postponed, a Hong Kong official said on Friday, which would be the second time the plan to allow visits between the cities has been called off.
· Mainland China reports first local COVID-19 cases in more than 3 weeks
· India’s COVID cases above 24 million as mutant spreads across globe
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