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Gold and silver edge higher leading into the European open

 

·         Gold and silver are trading higher after both metals had a good Asian session. The yellow metal is 0.20% up trading at $1906/oz while silver trades at $27.94/oz. In the rest of the commodities complex, copper has moved 0.14% in the black along with spot WTI which trades 0.27% higher.

 

·         The risk sentiment was pretty poor as the Nikkei 225 fell -0.99% and the ASX dropped -0.25% but the Shanghai Composite (0.14%) bucked the trend to stay positive.

 

·         WSJ on Biden's infrastructure discussions extending into June. Biden administration says talks over infrastructure would need to show a "clear direction" toward agreement by the time Congress returns from recess on June 7 signaling that Democrats might be preparing to go it alone.

 

·         On the coronavirus front, Vietnam has reportedly found a new COVID-19 variant, combines UK and Indian strains.

 

·         The China regulator says will further crackdown on market manipulation. Mainly focusing on the commodities markets.

 

·         New Zealand says it is supporting Australia in the trade dispute with China.

 

·         Looking ahead to the rest of the session markets could be quiet as the U.S. and U.K. are both off for a public holiday. Elsewhere we are due to get German CPI and comments from  German Buba Vice President Buch.

 

 

Gold eyes biggest monthly rise in ten on soft dollar, inflation risk

 

·         Gold prices rose on Monday and were headed for their biggest monthly jump since July 2020, boosted by a weaker U.S. dollar and lower bond yields, while growing inflationary pressure also lifted demand for the metal.

 

·         Spot gold was up 0.1% at $1,905.14 per ounce by 0637 GMT, while U.S. gold futures gained 0.2% to $1,908.80. Spot prices have risen nearly 7.7% so far this month.

 

·         Most markets will be closed in the United States and Britain on Monday for public holidays.

 

·         “Gold is pretty much drawing its strength from inflation fears and some inclination of the yields,” said Stephen Innes, managing partner at SPI Asset Management.

 

·         “The dollar is staying weaker, that’s fairly supportive. Gold bulls now have their eyes set on $2,000, and most are thinking it’s going to go quite a lot higher.”

 

·         The dollar index eased 0.1% against its rivals, while the U.S. 10-year Treasury yield fell to 1.593% on Friday , reducing the opportunity cost of holding non-interest bearing gold.

 

·         Data on Friday showed U.S. consumer prices surged in April, with a measure of underlying inflation blowing past the Federal Reserve’s 2% target and posting its largest annual gain since 1992.

 

·         Gold, often used as a hedge against inflation, has benefited from recent data showing a rise in prices in the United States and Britain.

 

·         Investors’ focus this week will be on U.S. payrolls data due on Friday, with median forecasts suggesting they will show an increase of 650,000.

 

·         Spot gold, riding on a wave C from the May 13 low of $1,808.44, may test resistance at $1,919 per ounce, a break of which could lead to a gain into the $1,932-$1,953 range, Reuters technical analyst Wang Tao said in a report on Monday.

 

·         Palladium was up 0.4% at $2,837.38 per ounce, but was set for its first monthly decline in four. Platinum climbed 0.4% to $1,181.76.

 

·         Silver gained 0.1% to $27.91 and was heading for its largest monthly gain since December.

 

·         I'm very bullish on bitcoin price, but I am keeping my 5% gold allocation - Kevin O' Leary

 

As the crypto space sees wild price swings, Kevin O'Leary, chairman of O'Shares ETFs and star of Shark Tank, says he is very bullish on bitcoin, but there's one looming issue that needs to be solved before prices can head to $100k.

 

There is a heated debate around the sustainability and ESG aspects of bitcoin mining, and bitcoin will be "stuck in a rut" until this is resolved, O'Leary told Michelle Makori, editor-in-chief of Kitco News.

 

·         U.S. dollar net short position hits largest since late February - CFTC, Reuters data

U.S. dollar net shorts climbed this week to the highest level since late February, according to calculations by Reuters and Commodity Futures Trading Commission data released on Friday.

The value of the net short dollar position rose to $27.89 billion in the week ended May 25, from net shorts of $15.07 billion the previous week. U.S. dollar net short contracts rose for a sixth straight week.

 

·         Biden’s defense budget aims to curb China, gives troops 2.7% raise

U.S. President Joe Biden’s $715 billion Department of Defense budget includes a 2.7% pay raise for troops and shifts billions in spending from old systems to help pay to modernize the nuclear arsenal to deter China.

 

·         U.S. administers 294.9 mln doses of COVID-19 vaccines - CDC

 

·         China reports surge of new COVID-19 cases in Guangzhou city, triggering flight cancellations

 

·         Goldman Sachs to double property investments in Japan - source

 

·         Taiwan's new COVID-19 cases slow but restrictions to stay in coming weeks

 

·         Australia's Victoria COVID-19 cluster swells to 51, next few days 'critical'

 

·         Vietnam's business hub Ho Chi Minh City will begin social distancing measures for 15 days starting from May 31.

Reference: CNBC, Reuters, Kitco