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Gold prices slipped as much as 1.7% on Monday, as some investors feared the U.S. Federal Reserve may outline a path for scaling back its expansive monetary policy at a two-day meeting this week.

·         Spot gold fell 0.7% to $1,863.98 per ounce by 1:43 p.m EDT (1743 GMT) after hitting its lowest level since May 17 at $1,848.49.

·         U.S. gold futures settled 0.7% down at $1,865.9.

·         Phillip Streible, chief market strategist at Blue Line Futures in Chicago, said there could have been some liquidation in gold ahead of the Fed’s policy meeting, which begins on Tuesday.

 

“There’s the possibility that the Fed may indicate that they’re going to start tapering, which should weigh on gold,” Streible said.

·         The Fed is already in the process of “expunging” liquidity from the system and that should also weigh on gold, he added, referring to last week’s surge in the Federal Reserve’s reverse repurchase volume.

·         Market participants will also scrutinize the Federal Reserve’s evolving outlook on unemployment, inflation and economic growth, as well as the likely date of a first rate hike.

·         “We see risks for further weakness in prices as (Fed) taper talk saps interest in the yellow metal at a time when flows are not particularly supportive,” TD Securities analysts said in a note.

·         Speculators reduced their net long positions in COMEX gold in the week ended June 8.

·         But Commerzbank expects inflation concerns to push gold to $2,000 an ounce by the end of the year, adding that inflation could remain at a very high level into the third quarter, prompting the Fed to reduce bond purchases by around the fourth quarter.

 

However, “this does not imply an earlier initial rate hike,” supporting gold, the bank said in a note.

·         Elsewhere, silver was down 0.1% at $27.87 per ounce.

·         Palladium fell 0.7% to $2,755.39.

·         Platinum rose 1.3% to $1,164.54.

 

·         Bitcoin soars above $40,000 after Tudor Jones endorsement, Musk’s about-face on accepting crypto

Bitcoin’s price hopped over $40,000 on Monday following bullish comments by billionaire hedge fund manager Paul Tudor Jones.

“I like bitcoin as a portfolio diversifier. Everybody asks me what should I do with my bitcoin? The only thing I know for certain, I want 5% in gold, 5% in bitcoin, 5% in cash, 5% in commodities,” Tudor Jones said on CNBC’s “Squawk Box” on Monday.

The cryptocurrency began its latest surge on Sunday after Tesla CEO Elon Musk said the electric vehicle maker could accept bitcoin transactions again in the future.

 

·         All-star investor Rich Bernstein warns bitcoin is a bubble, sees oil as the most ignored bull market

Bernstein, who has spent decades on Wall Street, calls oil the most ignored bull market.

WTI crude oil is trading around its highest levels since October 2018. It settled at $70.88 on Monday and is up 96% over the past year.

Bitcoin may be up 13% over the past week, but it’s still down 35% over the past two months.

 

·         Fed to announce QE taper in Aug or Sept on rising inflation concerns

 

The Federal Reserve is likely to announce in August or September a strategy for reducing its massive bond buying program, but won’t start cutting monthly purchases until early next year, a Reuters poll of economists found.

A significant number of Fed watchers also said the central bank would wait until later in the year before announcing a taper, now the main focus for markets fretting over rising inflation as an end to the pandemic in the United States is in sight.

 

 

·         Fed tiptoes towards the taper stage months before the curtain call

For the second time in less than a decade, the Federal Reserve is getting ready to launch a thorny debate over how and when to sunset a massive asset-purchase program that helped cushion an economy battered by crisis but left it with a mountain of bonds that may linger on its balance sheet for years to come.

The last forecasts, released in March, showed that most policymakers did not expect a liftoff on rates before 2024. Analysts expect no change on that front this week.

 

 ·         Jamie Dimon says JPMorgan is hoarding cash because ‘very good chance’ inflation is here to stay

JPMorgan Chase has been “effectively stockpiling” cash rather than using it to buy Treasuries or other investments because of the possibility higher inflation will force the Federal Reserve to boost interest rates, Dimon said Monday during a conference. The biggest U.S. bank by assets has positioned itself to benefit from rising interest rates, which will let it buy higher-yielding assets, he said.

“We have a lot of cash and capability and we’re going to be very patient, because I think you have a very good chance inflation will be more than transitory,” said Dimon, longtime JPMorgan CEO.

 

U.S. Senate Republicans to discuss details of new infrastructure plan

U.S. Senate Republicans are due to hear details on Tuesday about a bipartisan proposal to revitalize America's roads and bridges, which lawmakers believe could win support from the caucus as a part of President Joe Biden's sweeping infrastructure plan.

 

 

U.S. Senate Republicans to discuss details of new infrastructure plan

U.S. Senate Republicans are due to hear details on Tuesday about a bipartisan proposal to revitalize America's roads and bridges, which lawmakers believe could win support from the caucus as a part of President Joe Biden's sweeping infrastructure plan.

Members of a bipartisan Senate group will discuss the proposal with Republican senators at their weekly policy lunch, Republican lawmakers and aides said on Monday evening.

It proposes to spend $974 billion over five years, or $1.2 trillion over eight years, a source familiar with the package said. That is below Biden's current $1.7 trillion proposal and it is unclear whether it can gather enough support to pass the 50-50 Senate.

Senator John Thune, the chamber’s No. 2 Republican, told reporters that he expects Republican support for the proposal.

Reference: Reuters

 

U.S. Senate confirms Biden appointee seen as Supreme Court contender

Democrats overcame Republican opposition on Monday as the U.S. Senate voted to confirm federal judge Ketanji Brown Jackson, seen as a possible future Supreme Court nominee for President Joe Biden, to an influential appellate court.

 

·         Republican McConnell would block a Biden Supreme Court pick in 2024

U.S. Senate Minority Leader Mitch McConnell said on Monday that President Joe Biden would not get a Supreme Court nominee confirmed in 2024 if Republicans regain control of the chamber and a vacancy arises during that presidential election year.

 

·         Biden warns Putin ahead of summit: Navalny’s death would hurt Russia’s standing

President Joe Biden issued a warning to Russian President Vladimir Putin ahead of their Wednesday summit that the death of jailed Russian opposition leader Alexei Navalny would hurt Russia’s relationships with the rest of the world.

 

·         Erdogan sticks to his position on Russian missile deal after meeting with Biden

 

 

·         NATO adopts tough line on China at Biden’s debut summit with alliance

 

·         NATO to respond to China’s ‘coercive behavior,’ says Beijing does not share its values

NATO Secretary General Jens Stoltenberg said Monday the military alliance plans to toughen its stance toward China, while recognizing the need to work with Beijing on some global issues.

Speaking as he arrived in Brussels, Belgium, for a one-day NATO summit, the organization’s chief said: “The message is that, of course, there are opportunities in our relationship with China. For instance, on arms control and climate change we need to talk to China. At the same time, what we have seen over now several years is a significant military buildup by China, investing heavily in new military capabilities, including nuclear capabilities and also more advanced weapon systems.”

 

·         Outgoing U.N. aid chief slams G7 for failing on vaccine plan

 

 

·         CORONAVIRUS UPDATES:

 

 

·         U.S. COVID-19 deaths cross painful 600,000 milestone as country reopens

 

·         WHO says Covid is spreading faster than the global distribution of vaccines

 

·         Novavax says its Covid vaccine is 90% effective, plans to submit data to FDA in third quarter

 

Refrence: CNBC, Reuters, Worldometers