· Gold prices edged above $1,900 an ounce level on Friday, supported by a pullback in the dollar and lower bond yields, after data showing a rise in U.S. inflation was viewed inadequate to alter the Federal Reserve’s easy monetary policy.
· Spot gold was up 0.1% at $1,900.40 per ounce, as of 0658 GMT. Prices have risen more than 0.5% this week.
· U.S. gold futures rose 0.4% to $1,903.90 per ounce.
· Data showed U.S. consumer prices rose solidly in May, leading to the biggest annual increase in nearly 13 years, while weekly jobless claims dropped to their lowest level in nearly 15 months last week.
· “The rise in U.S. inflation failed to spark a tapering sell-off. That saw bond yields edge lower helping gold to bounce back,” said Jeffrey Halley, senior market analyst at OANDA.
· “The FOMC next week is now likely to be a non-event, and barring a sharp rise in the dollar. Gold looks set to test resistance at $1,920 early next week, as the asset price appreciation trade gains new momentum.”
· The benchmark U.S. Treasury yields dropped to a three-month low, reducing the opportunity cost of holding non-interest bearing bullion.
· The dollar index, meanwhile, fell 0.1% after hitting a near one-week high in the previous session.
· On Thursday, the European Central Bank kept its monetary policy unchanged and pledged a steady flow of stimulus over the summer.
· Focus now shifts to Fed’s June 15-16 policy meeting.
· The Fed is likely to announce in August or September a strategy for reducing its massive bond-buying program, but would not start cutting monthly purchases until early next year, according to a Reuters poll.
· Spot gold’s break above $1,911 per ounce could lead to a gain into $1,932-$1,953 range, according to Reuters technical analyst Wang Tao.
· Silver rose 0.7% to $28.16 per ounce, while platinum gained 0.3% to $1,153.82.
· Palladium was steady at $2,775.73, but was on track for a weekly decline.
· Central Bank Watch: Fed Speeches, Interest Rate Expectations Update
CENTRAL BANK WATCH OVERVIEW:
- The June FOMC meeting is under two weeks away, and it’s becoming evident that policymakers are beginning to lay the foundation for initial QE tapering efforts.
- Although interest rates hikes aren’t coming anytime soon, the timing of when the winddown of the Fed’s asset purchase program will begin will be a focal point for financial markets over the coming months.
- Tapering probably won’t start until January 2022, though the details of which will likely be announced in September or December 2021.
· Biden and G-7 leaders will endorse a global minimum corporate tax of at least 15%
President Joe Biden and leaders of the G-7 group of nations will publicly endorse a global minimum corporate tax of at least 15% on Friday, one piece of a broader agreement to update international tax laws for a globalized, digital economy.
The leaders will also announce a plan to replace Digital Services Taxes, which targeted the biggest American tech companies, with a new tax plan linked to the places where multinationals are actually doing business, rather than where they are headquartered.
For the Biden administration, the Global Minimum Tax plan represents a concrete step towards its goal of creating what it calls a “foreign policy for the middle class.”
· UK economy posts record annual jump in April, up 27.6%
Britain’s economic output in April was a record 27.6% larger than 12 months before, official data showed on Friday, an increase that reflects recent reopening and the scale of disruption to every
In April alone, output rose by 2.3%, marking the fastest growth since July, the Office for National Statistics (ONS) said, and compared with the Reuters poll consensus for a 2.2% increase.
But British economic output is still 3.7% lower than in February 2020, before the pandemic led to lockdown measures.
· China administered total of 845.30 mln doses of COVID-19 vaccines as of June 10
China administered about 20.4 million doses of COVID-19 vaccines on June 10, bringing the total number administered to 845.30 million, data from the National Health Commission showed on Friday.
· China invites Taiwanese to come to get vaccinated against COVID-19
China's government said on Friday that it welcomed Taiwanese to come and get vaccinated against COVID-19 and called on Taiwan to remove obstacles and allow its people to receive the "highly effective" Chinese shots.
· Japan's exports set for biggest monthly gain since 1980
Japan's exports likely posted their largest monthly rise in four decades in May, a Reuters poll showed on Friday, but the flattering milestone was largely reflective of a rebound in shipments from last year's pandemic-driven plunge.
Exports likely soared 51.3% in May compared to the same month a year earlier, the poll of 17 economists showed.
That would mark the sharpest monthly rise since April 1980, when shipments jumped 51.4%, a finance ministry official said. The annual uptick in exports largely reflected the recoil effect of the 28.3% plunge in May of 2020.
Imports were forecast to have jumped 26.6% year-on-year in May, which would result in a trade deficit of 91.2 billion yen ($833.7 million).
· Japan city uses tsunami lessons for COVID-19 vaccinations
· U.S. drops sanctions on former Iranian officials, step called routine
The United States said on Thursday it had removed sanctions on three former Iranian officials and two companies that previously traded Iranian petrochemicals, a step one U.S. official called routine but that could show U.S. readiness to ease sanctions when justified.
Speaking on condition of anonymity, the U.S. official said that the moves by the U.S. Treasury's Office of Foreign Assets Control (OFAC) were unrelated to efforts to revive Iranian and U.S. compliance with the 2015 Iran nuclear deal.
· Malaysia's April industrial output rises 50.1%, fastest in over decade
Malaysia's industrial production rose by a record 50.1% in April from a year ago, marking the highest rate in more than a decade, on stronger demand across all sectors, government data showed on Friday.
The production index measures factory output in manufacturing, mining and electricity generation.
The expansion in April beat the 46.1% jump forecast by 10 economists in a Reuters poll, and sharply higher than the 9.3% rise recorded in March.
The previous record for industrial production was a 20.2% spike in March 2009.
Reference: CNBC, Reuters
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