· Gold prices were on the back foot on Thursday as the dollar ticked higher, with investors staying on the sidelines ahead of the European Central Bank meeting and U.S. inflation data later in the day.
· Spot gold was down 0.2% at $1,884.18 per ounce, as of 0712 GMT.
· U.S. gold futures fell 0.5% to $1,886.20 per ounce.
· The dollar index edged up slightly to trade near 90.195 against its rivals, making gold more expensive for other currency holders.
· “The market is in a wait-and-watch mode ahead of U.S. CPI and ECB outcome,” said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares.
· “If CPI data comes on a higher side, its bearish for gold as talks of tapering will increase in the market and focus will shift to Q&A session of the Federal Reserve meeting next week.”
· All eyes are on U.S. consumer price index data after last month’s report showed consumer prices increased by the most in nearly 12 years in April. Economists polled by Reuters have estimated the CPI advanced 0.4% in May.
· Investors are also tracking U.S. weekly jobless claims data, also due on Thursday, for more clues on labour market recovery in the world’s biggest economy.
· The ECB policy decision is due at 1145 GMT. The central bank is all but certain to maintain a generous flow of stimulus when policymakers meet.
· “In the near-term, technically we still see gold prices reasonably well supported. Prices will continue to push through $1,900 and grind higher,” said IG Market analyst Kyle Rodda.
· Indicative of the upbeat sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.6% on Wednesday.
· Elsewhere, silver dipped 0.4% to $27.64 per ounce, palladium eased 0.2% to $2,774.24, while platinum slipped 1.1% to $1,137.65.
The Labor Department is likely to report on Thursday that initial claims for state unemployment benefits totaled a seasonally adjusted 370,000 for the week ended June 5, compared to 385,000 in the prior week, according to a Reuters survey of economists.
That would be the lowest since mid-March 2020 when the first wave of COVID-19 infections barreled through the country, leading to closures of nonessential businesses, and mark the sixth straight weekly decline.
Inflation could also get a boost from employers raising wages as they compete for scarce workers, despite employment being still 7.6 million jobs below its peak in February 2020. There are a record 9.3 million unfilled jobs.
Though layoffs are abating, initial claims remain well above the 200,000 to 250,000 range that is viewed as consistent with healthy labor market conditions. Claims have, however, dropped from a record 6.149 million in early April 2020.
· Biden to donate 500 million Pfizer doses, urge others to join in
U.S. President Joe Biden plans to buy and donate 500 million doses of the Pfizer coronavirus vaccine to more than 90 countries, while calling on the world’s democracies to do their part to help end the deadly pandemic, the White House said.
· Biden and Johnson to agree on new ‘Atlantic Charter’ covering tech, trade and travel
The U.S. and U.K. have pledged to agree on a new “Atlantic Charter” to cement trade, travel and tech ties between the two nations.
U.K. Prime Minister Boris Johnson and President Joe Biden will meet Thursday ahead of the Group of Seven (G-7) summit that begins Friday in Cornwall, in southwest England.
· ECB to keep money taps wide open even as recovery takes hold
The European Central Bank is all but certain to maintain a generous flow of stimulus when policymakers meet on Thursday, fearing that higher borrowing costs could smother a still nascent recovery.
Recent comments from ECB President Christine Lagarde and board member Fabio Panetta suggest the June discussion effectively ended even before Thursday’s meeting, with a cut in bond purchases unlikely, even if policymakers acknowledge an improvement in growth prospects and the rapid pace of vaccinations.
Panetta flatly rejected any reduction in emergency bond buys while Lagarde said it was “far too early” to discuss tapering the bank’s 1.85 trillion euro Pandemic Emergency Purchases Programme (PEPP).
While policymakers could still opt for a different course, they usually line up behind their president and rarely make changes to proposals brought to the table by the six-member Executive Board.
· Bank of Canada holds key interest rate at 0.25 per cent
The Bank of Canada is keeping its key interest rate target on hold at 0.25 per cent.
The rate has been on hold at its rock-bottom level since the onset of the pandemic last year and the central bank has said it won’t increase the rate until the economy has recovered.
· Canada takes cautious step toward lifting border restrictions, businesses fret
Canada on Wednesday took a cautious first step toward easing COVID-19 border restrictions, saying it was prepared to relax quarantine protocols for fully vaccinated citizens returning home starting in early July.
· Weak consumption is a ‘major problem’ for China’s recovery, says analytics firm
· China FX deposit balance at historic high of $1.01 trillion at end of May
China’s foreign exchange deposits hit a new historic high of $1.01 trillion at end of May, compared with $1 trillion a month earlier and up 35.7% on the year, according to the central bank.
· S.Korea considers vaccinating workers at major companies
South Korea is considering plans to vaccinate workers at key businesses including chip and electronics firms to minimise disruptions to production, the government said on Thursday, amid global efforts to boost supply of scarce computer chips.
· Singapore to start easing Covid restrictions as daily infections fall
· Thai May consumer confidence hits record low on virus outbreak
Thai consumer confidence hit a record low in May, hurt by the country's latest and biggest coronavirus outbreak so far, which could cost the economy as much as 800 billion baht ($25.7 billion), the commerce ministry said on Thursday.
The consumer index of the University of the Thai Chamber of Commerce fell to 44.7 in May from 46.0 in April, when an outbreak emerged that has accounted for most of Thailand's overall COVID-19 infections and deaths.
Reference: CNBC, Reuters
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