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Gold inched higher on Monday as a weaker dollar and lower U.S. Treasury yields bolstered its appeal, while investors awaited data due this week that should help them assess the pace of economic recovery in the United States.

·         Spot gold was up 0.1% at $1,882.83 per ounce at 1:42p.m. EDT (1742 GMT). Last week it reached its highest since Jan. 8 at $1,889.75.

·         U.S. gold futures settled up 0.4%, at $1,884.5.

·         SPDR GOLD HOLDINGS:

·         A tick lower in the dollar and U.S. yields is acting in gold's favour, Bob Haberkorn, senior market strategist at RJO Futures said, adding stronger equity markets were providing a counterweight.    

·         The dollar was down 0.2%. U.S Treasury yields fell to the lowest in nearly two weeks, reducing the opportunity cost of holding non-interest paying bullion.            

·         Investors await to hear this week if Federal Reserve speakers will stick to a patient policy. They are also waiting for data, including on U.S. gross domestic product, jobless claims and durable goods.

·         "If (the data) comes out substantially better than expected, that would probably be bearish for gold, because the likelihood of a Fed taper (of its bond-buying programme) will be sooner rather than later," Haberkorn said, adding if the data is worse-than-expected, gold could trade north of $1,900 fairly quickly.

·         A crash in bitcoin also supported gold prices, analysts said.                

·         "Gold prices are very strong at these levels. There are any number of things to scare investors into wanting to buy gold, but we also have a situation where in Europe, U.S. and Canada, where the vaccines are starting to have a positive effect," said Jeffrey Christian, managing partner of CPM Group.

 

"The economies are reopening and economic activity is strong ... Maybe gold prices could back off a little bit."

·         Palladium fell 1.8% to $2,734.45 per ounce.

·         Silver gained 0.8% to $27.75 per ounce.

·         Platinum rose 0.7% to $1,174.31 per ounce.

 

·         U.S. Senate Republicans to meet on White House infrastructure talks

U.S. Senate Republicans are due to meet on Tuesday to determine their next steps on bipartisan infrastructure talks following last week's White House offer to pare down President Joe Biden's sweeping $2.25 trillion proposal to $1.7 trillion.

One of the lawmakers, Senate Republican Conference Chairman John Barrasso, said on Monday the group of six lawmakers would hold a Tuesday morning meeting, as they approach an unofficial end-of-May White House deadline to show progress in the talks.

Senator Shelley Moore Capito, of West Virginia, who is leading the Republican infrastructure effort, said her negotiating team would discuss possible next steps but offered no details about options.

 

·         U.S. Treasury deputy chief sees G7 backing for 15%-plus global minimum tax

U.S. Treasury Deputy Secretary Wally Adeyemo said he expects strong backing from G7 peers for Washington's proposed 15%-plus global minimum corporate tax, which should help solidify support in the U.S. Congress for domestic corporate tax legislation.

That support may be voiced at an in-person meeting of G7 finance ministers in London on June 4-5, Adeyemo said.

 

·         U.S. home prices to keep racing ahead with risks to upside

U.S. house prices will continue to race ahead this year, at nearly twice the pace predicted just three months ago, according to a Reuters poll of analysts who said risks to that already upbeat outlook were skewed to the upside.

A strong recovery so far from the pandemic, ultra-low interest rates, massive fiscal support and continued demand for more living space as millions continue to work from home will push house prices higher this year, they said.

If realized, it would be the fastest annual house price inflation rate since 2013.

 

·         Fed’s Lael Brainard pushes digital dollar as central bank currency race heats up

Federal Reserve Governor Lael Brainard pressed the case for a digital dollar, saying Monday that a cryptocurrency backed by the central bank could provide a variety of benefits.

 

·         Fed's Bostic: Crypto, stablecoins an 'area we cannot ignore'

The rapid development of cryptocurrency and digital finance generally is “an area we cannot ignore,” Atlanta Federal Reserve President Raphael Bostic said on Monday while pointing to volatility in technologies like bitcoin and their shortcomings as a substitute for traditional currencies like the dollar.

“It is moving fast. The crypto space in particular right now if you characterized it – it is an extremely volatile market and I don’t think its characteristics right now are conducive for them to be currency. The stablecoins get closer but there is still more to be done,” Bostic said in an online discussion with a Florida-based real estate institute.

 

·         China’s latest move to tighten crypto regulation is not new, says HSBC

 

·         Bitcoin’s trading action lately is wild even by crypto’s standards and the drama is not over yet

 

·         Belarus faces sanctions backlash over jetliner ‘state piracy’

 

·         EU leaders discuss repercussions for Belarus after Ryanair ‘hijack’

Outraged European leaders are gathering in Brussels on Monday to discuss how to punish Belarusian authorities, after the forced landing of a Ryanair flight and subsequent arrest of a journalist on board.

 

·         EU leaders agree on Belarus sanctions after plane diversion

 

·         EU says tensions with UK stem from Brexit, not N.Ireland protocol

The European Union's tensions with former member Britain are not due to problems with the Northern Ireland protocol agreed by both sides, but Brexit itself, the head of the bloc's executive said on Tuesday.

 

·         UN nuclear watchdog says it has agreed with Iran to extend monitoring agreement for one month

 

·         Singapore’s economy grew 1.3% in the first quarter, beating expectations

 

 

·         CORONAVIRUS UPDATES:

·         Two doses of Covid vaccines provide effective protection against variant found in India: Study

A new study has found that two doses of either the Pfizer-BioNTech or AstraZeneca-University of Oxford vaccine give effective protection against the Covid variant first discovered in India, however it underscored the need for two doses, as both vaccines were significantly less effective after only one shot.

The study, led by Public Health England, also found that two doses of one of those vaccines were similarly as effective at protecting against the variant that first emerged in the U.K. and has since become a dominant strain in the West.

·         Gottlieb says there’s growing circumstantial evidence that Covid may have originated in a lab

Evidence that Covid-19 originally leaked from a Wuhan, China, virology lab is growing, Dr. Scott Gottlieb told CNBC on Monday, pointing to reports that three researchers from the lab sought hospital care with a Covid-like illness in November 2019.

 

·         White House says cannot confirm report on COVID-19 origins, needs more information

 

·         U.S. reports lowest number of new COVID-19 cases in nearly a year

The United States last week reported the lowest number of new COVID-19 cases in nearly a year, with new infections dropping 26% from the previous seven days to just under 180,000, according to a Reuters analysis of state and county data.

Deaths from COVID-19 fell 5% to 3,969 in the week ended May 23, the fewest deaths in a week since March 2020.

About 39% of the country's population has been fully vaccinated as of Sunday, and 49% has received at least one dose of a COVID-19 vaccine, according to the U.S. Centers for Disease Control and Prevention.