· Gold prices retreated nearly 1% on Thursday, as the dollar strengthened while investors cautiously awaited crucial U.S. economic readings this week for more clarity on monetary policy.
· Spot gold was down 0.8% at $1,892.71 per ounce, as of 0754 GMT. Prices hit their highest since Jan. 8 at $1,916.40 on Tuesday.
· U.S. gold futures eased 0.6% to $1,898.30.
· The U.S. Labor Department is expected to release initial weekly jobless claims data later in the day, followed by non-farm payroll numbers on Friday.
· "We need to get a sense from the payrolls report on what is the immediate steer on Fed policy," DailyFX currency strategist Ilya Spivak said.
· "Yields have eased back a bit since the start of the week. But the dollar is range-bound, it hasn't been able to build momentum and hasn't fallen off ... that has been reflected in gold."
· The dollar index edged 0.1% higher against its rivals, making gold less appealing for other currency holders.
· The U.S. economic recovery accelerated in recent weeks even as a long list of supply chain troubles, hiring difficulties, and rising prices cascaded through the country, Federal Reserve officials said on Wednesday.
· Fed officials have said repeatedly they expect price pressures to be temporary and monetary stimulus to stay in place for some time.
· SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.4% to 1,041.75 tonnes on Wednesday.
· Analysts at ANZ Research said rising inflation expectations should allow gold prices to rally, likely hitting $2,000 an ounce in the second half of 2021.
Gold struggled to capitalize on the previous day's modest gains and met with some fresh supply on Thursday. The intraday downfall was sponsored by a combination of factors and dragged the XAU/USD to fresh weekly lows, around the $1,892 region during the early European session.
Investors have grown nervous about whether a surprisingly stronger US economic data could force the Fed to start tapering its bond-buying program sooner rather than later. This, in turn, prompted some short-covering move around the US dollar and exerted some pressure on dollar-denominated commodities, including gold.
The greenback was further underpinned by a modest uptick in the US Treasury bond yields. This was seen as another factor driving flows away from the non-yielding yellow metal. Bulls seemed rather unimpressed by a softer tone surrounding the equity markets, which tends to benefit safe-haven assets, like gold.
Moving ahead, market participants now look forward to Thursday's US economic docket – featuring the releases of the ADP report on private-sector employment, the Initial Weekly Jobless Claims and ISM Services PMI. This, along with the US bond yields, will influence the USD price dynamics. Apart from this, the broader market risk sentiment will also be looked upon for some short-term trading opportunities around gold.
Previous update: Gold remains pressured towards $1,900, down 0.26% intraday around $1,903, as European traders brace for Thursday’s bell. In doing so, the yellow metal takes clues from the US dollar rebound amid a quiet morning.
Technical analysis
Gold prices justify the failures to cross one-week-old horizontal resistance, around $1,910 while declining towards a confluence of 50-SMA and a fortnight-long support line, close to $1,899.
Although the descending RSI line backs the odds favoring gold’s further weakness, multiple levels marked since May 18 near $1,890-88, should restrict the yellow metal’s further declines.
Should gold bears refrain from stepping back after $1,888, May 19 low and early May tops, near $1,852 and $1,845 respectively, will be on their radars.
Meanwhile, an upside clearance of $1,910 needs a daily closing beyond $1,917 to aim for October 2020 tops surrounding $1,930. Though, any further upside won’t hesitate to direct gold buyers to the yearly top near $1,960.
· Elsewhere, silver edged 1.5% lower to $27.78 per ounce, palladium fell 0.3% to $2,849.23, while platinum slipped 0.8% to $1,180.67.
· Dollar on tenterhooks as payrolls test looms
The U.S. dollar wobbled above major support levels on Thursday, as traders awaited a batch of U.S. economic data that could set the tone at central bank meetings later this month.
Investors have bet on the dollar falling as the world recovers from the COVID-19 pandemic, but they have lately grown nervous over whether a surprisingly strong U.S. economic rebound poses a threat to a key assumption that interest rates will stay low for a long time.
The mood has kept speculators from adding much to short positions in recent weeks and has put the brakes on what a month ago seemed like a relentless downtrend.
Against the euro the dollar traded firmly at $1.2201 and it crept a fraction higher on Antipodean currencies. It rose 0.1% to buy 109.68 yen.
The dollar index, which measures the greenback against a basket of six major currencies, held at 89.946 where it has found strong support in recent sessions after falling 2% in April and a further 1.6% in May.
· U.S. Treasury yields mixed ahead of economic data
U.S. bonds yields were mixed on Thursday morning as investors looked ahead to a upcoming economic data this week.
The yield on the benchmark 10-year Treasury note rose 10 points to 1.5926% by around 2 a.m. ET. The yield on the 30-year Treasury bond dipped 11 basis points to 2.2774%. Yields move inversely to prices.
· Cryptocurrency firms not meeting anti-money laundering rules, UK regulator says
· China rushes to pull back the yuan from a three-year high
China is trying to rein in the yuan as it surges to three-year highs against the U.S. dollar.
A stronger yuan makes Chinese goods relatively more expensive to buyers overseas, and has spurred concerns about the competitiveness of Chinese exports — a major contributor to national economic growth.
· Euro zone business growth soared in May as restrictions eased -PMI
Euro zone business activity surged in May as the easing of some coronavirus related restrictions injected life into the bloc’s dominant services industry, a survey showed, echoing data on Tuesday which showed factories had their best month on record.
An acceleration of vaccine programmes across the region and a fall in reported daily cases has allowed governments to remove some measures imposed to try and stop the spread of the virus.
That meant IHS Markit’s final composite Purchasing Managers’ Index (PMI), seen as a good gauge of economic health, jumped to 57.1 last month from April’s 53.8, its highest level since February 2018.
· IMF sees Italy GDP up 4.3% in 2021, budget deficit at 11.8% GDP
The International Monetary Fund on Thursday slightly improved its growth estimates for Italy in 2021 and 2022 while increasing projections for the country’s budget deficit.
The IMF now sees Italy’s gross domestic product up 4.3% and 4% in 2021 and 2022 respectively, from an April estimate of 4.2% and 3.6%, closer to the government’s projections of growth of 4.5% this year and 4.8% next year.
The budget deficit for 2021 was revised up to 11.8% of GDP from 8.8% in April, matching the government’s estimate. The budget deficit for 2022 was seen at 6% in 2022 from 5.5%, near Rome’s projection of 5.9%.
· Russian services sector activity hits nine-month peak in May -PMI
Russia’s service sector in May showed its sharpest upturn in activity in nine months thanks to growth in new business as domestic demand conditions improved, the Markit purchasing managers index (PMI) showed on Thursday.
The index’s headline figure rose to 57.5 in May from 55.2 in April, above the 50 mark that separates expansion from contraction.
· Israel’s opposition declares new government, set to unseat Netanyahu
Israel’s opposition leader moved closer to unseating Prime Minister Benjamin Netanyahu when he officially told the country’s president that he has reached agreements with political allies to form a new government.
· China restricted imports from Australia. Now Australia is selling elsewhere
Wide restrictions that China slapped on Australian exports are not as damaging as it was feared they’d be, because Australia is finding new markets for its goods.
Tensions between the countries have soared in recent months, deteriorating sharply after Australia supported a call for a global inquiry into China’s early handling of Covid-19.
· Hong Kong’s economy is not out of the woods despite sharp rebound, says commerce secretary
Hong Kong’s economy has rebounded sharply after being hit by the Covid-19 pandemic — but it’s not out of the woods yet and some sectors are still reeling, said the city’s top trade official.
The Hong Kong economy grew 7.9% in the first quarter of 2021 compared to a year ago. It was the city’s first economic expansion after six consecutive quarters of year-on-year contraction.
· Delta Covid variant first found in India spreads to 62 countries, hot spots form in Asia and Africa, WHO says
The Covid-19 variant first detected in India in October has now spread to at least 62 countries as outbreaks surge across Asia and Africa — despite a 15% week-over-week drop in cases across the globe, according to the World Health Organization.
“We continue to observe significantly increased transmissibility and a growing number of countries reporting outbreaks associated with this variant,” the WHO said of the Delta strain, noting that further study was a high priority.
The WHO changed the name of the variant to Delta in order to simplify its scientific name, B.1.617.2. The new naming system for Covid variants, after letters of the Greek alphabet, also avoids stigmatizing countries that detect new strains.
· Taiwan appreciates Japan considering COVID-19 vaccine donations
Taiwan's Foreign Minister Joseph Wu told reporters on Thursday he appreciated Japan's consideration of donating COVID-19 vaccines and reiterated that Taiwan's exclusion from the World Health Organisation was unfair to the Taiwanese people.
· Sinovac COVID-19 vaccine to be allowed in Singapore under special access route after WHO approval
China's Sinovac COVID-19 vaccine can be administered in Singapore under the special access route after it was approved for emergency use by the World Health Organization (WHO), said the Ministry of Health (MOH) on Wednesday (Jun 2).
· Coronavirus curbs shutter thousands of Bangkok restaurants
· Indonesia cancels haj pilgrimage again due to coronavirus concerns
Indonesia has cancelled the haj pilgrimage for people in the world's largest Muslim-majority nation for a second year in a row due to concerns over the COVID-19 pandemic, the religious affairs minister said on Thursday.
· Oil rises as demand picture improves and suppliers keep supply tight
Oil prices rose for a third day on Thursday on expectations of a surge in fuel demand later this year, particularly in the United States and Europe and China, at the same time major producers are maintaining supply discipline.
Brent crude futures were up 40 cents, or 0.6%, at $71.75 a barrel by 0635 GMT, after earlier reaching the highest since September 2019. The international benchmark gained 1.6% on Wednesday.
U.S. West Texas Intermediate crude futures rose 34 cents, or 0.5%, to $69.17 a barrel. Prices earlier rose to as much as $69.40, the most since October 2018, after gaining 1.5% in the previous session.
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