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·         Gold reversed course and turned positive on Friday, popping above the key $1,900 level, after data showed U.S. consumer prices surged in April and boosted bullion’s appeal as an inflation hedge.

·         SPDR GOLD HOLDINGS:

 

·         Spot gold had risen 0.3% to $1,902.27 per ounce by 1:51 p.m. EDT (1751 GMT), having earlier dipped as much as 0.8%. It is on course for its fourth straight weekly gain, up 1.1%.

 

·         U.S. gold futures settled up 0.4% at $1,905.3.

 

·         U.S. consumer prices accelerated in the year to April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target.

 

·         “We saw a slight uptick in the personal consumption data... All these things continue to support an underlying inflationary environment that is very favorable towards gold,” said David Meger, director of metals trading at High Ridge Futures.

 

The refusal of the Federal Reserve to reduce the pace of their bond buying program or move higher on rates is also supportive for gold, although some psychological resistance at the $1,900 level and a stronger dollar is acting as a headwind, he added.

 

·         The dollar index pared gains, making gold less expensive for other currency holders, while U.S. yields edged lower, translating into reduced opportunity cost of holding bullion.

 

·         The White House unveiled a $6 trillion budget proposal that would ramp up spending on infrastructure, education and combating climate change.

 

·         The technicals are supportive, so any weakness in the prices will be looked at as a buying opportunity, Eli Tesfaye, senior market strategist at RJO Futures said.

 

If the U.S. economy recovers quickly and inflation continues to heat up, gold will be in ample demand, he added.

 

·         Elsewhere, silver was steady at $27.86 per ounce.
Platinum slipped 0.2%, to $1,176.99.
Palladium rose 0.8% to $2,827.04.

 

·         China is growing more worried about how surging commodity prices will affect business profits

The cost of raw materials as measured by the producer price index rose 6.8% from a year ago in April, the fastest pace in over three years. But consumer prices edged up just 0.9% as pork prices fell.

The global surge in commodity prices is adding another burden to China’s small businesses, many of which have barely put the coronavirus pandemic behind them.

In a sign of how severe the problem is, Chinese Premier Li Keqiang and other leaders emphasized at a meeting Wednesday they would increase support for privately run businesses — first, in the persistent issue of getting financing, and second, for coping with rising prices of raw materials.

 

·         Chinese yuan at three-year highs while U.S. dollar sits near 12-month lows. Trading the moves

Bill Baruch of Blue Line Capital and John Petrides of Tocqueville Asset Management trade the divergence in the Chinese yuan and U.S. dollar.

The rapid appreciation of China’s yuan against the U.S. dollar may have overshot and will not be sustainable, a former central bank official said in an interview with state media Xinhua News on Sunday.

The yuan has gained 1.7% so far in May to trade at three-year highs. It breached the psychologically important 6.4 per dollar level last week, but the pace of its rally has slowed after regulators signalled concerns over strong one-way bets on the currency.

The People’s Bank of China (PBOC) on Friday set the midpoint rate of the yuan at 6.3858 per dollar, the strongest since May 2018.

·         Dollar gives up gains for week as markets digest economic data

The dollar gave up gains from early on Friday as traders tidied positions ahead of month-end and a holiday weekend after seeing new economic data confirm expectations about U.S. inflation and the recovery from the COVID-19 pandemic.

The dollar index of major currencies rose as much as 0.4% during the day in a sharp rebound from 4-1/2 month lows plumbed on Tuesday before it fell back to flat for the day and the week at 89.99.

The euro was up a bare 0.05% at $1.22 on Friday afternoon, compared with a four-month high of $1.2266 earlier in the week.

The British pound was flat at $1.4199, continuing its recent struggle to stay above $1.42.

·         On Monday, the United States and Britain have public holidays.

 

·         Treasury yields fall even after stronger-than-expected jump in inflation

Treasury yields fell on Friday even after higher-than-expected inflation data.

The yield on the benchmark 10-year Treasury note dropped 2.9 basis points to 1.581% at 2:30 p.m. ET. The yield on the 30-year Treasury bond ticked 2.7 basic points lower to 2.263%. Yields move inversely to prices. One basis point equal 0.01%.

 

·         Bitcoin hovers around $40,000 after a wild week of trading

·         A key U.S. inflation gauge rose 3.1% year over year, higher than expected

A key inflation indicator rose a faster-than-expected 3.1% in April as price pressures built in the rapidly expanding U.S. economy, the Commerce Department reported Friday.

The core personal consumption expenditures index was forecast to increase 2.9% after rising 1.9% in March. Federal Reserve officials consider the measure to be the best gauge for inflation, though they watch a number of metrics.

 

·         Inflation will not be permanent, says Synovus’ Robert Nobles

Synovus CIO Robert Nobles joins ‘Closing Bell’ to express his believe that inflation is transitory and will not be permanent.

 

·         Biden’s big budget comes with a modest growth outlook for an aging country

President Joe Biden’s first budget proposal comes with a big price tag - at $6 trillion, roughly 50% higher than pre-COVID-19 federal spending - but, at least for now, projects a relatively modest long-term lift to the economy, likely reflecting concerns about the aging U.S. population.

 

·         Millions of Americans in 24 states are set to lose unemployment benefits as early as June 12

 

·         India's economy likely accelerated in Jan-Mar, before COVID-19 wave

 

·         Japan April factory output rises 2.5% month/month – govt

 

·         South Korea April factory output unexpectedly declines from March

 

·         N.Korea slams end to U.S. guidelines limiting S.Korea missile range

North Korea's state media on Monday criticised the recent termination of a pact between the United States and South Korea that capped the development of South Korea's ballistic missiles, calling it a sign of Washington's "shameful double-dealing."

 

 

·         Netanyahu’s grip on power in Israel loosens as rival moves to unseat him

 

 

CORONAVIRUS UPDATES:

 

 

·         Nearly half of Americans have at least one vaccine shot as Covid case counts fall further

CDC data shows 49.9% of the U.S. population has received at least one vaccine shot, with 40% having completed a full vaccination program.

About 1.6 million vaccine shots have been reported administered each day on average over the past week, CDC data shows.

Average daily case counts have fallen by 5% or more in 43 states and the District of Columbia over the past week, a CNBC analysis of Johns Hopkins data shows.

 

·         U.S. Covid cases near pandemic low as travel picks up for Memorial Day weekend

 

·         UK approves Johnson & Johnson’s single-dose Covid vaccine for use

 

·         In the UK, cases of the Covid variant identified in India double in one week

Cases of the Covid-19 variant first identified in India have more than doubled in England within one week, the country’s health authority said.

The number of cases of the strain had reached 6,959 by Wednesday, an increase of 3,535 cases from the previous week.

 

·            Secretary of State Antony Blinken says the U.S. and India are united in tackling Covid

 

·         WHO says Covid origin investigation is being ‘poisoned by politics’

 

·         Southeast Asian nations want to drop proposed UN call for Myanmar arms embargo