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​Gold hovers near one-month low after Fed mulls earlier rate hikes

·         Gold prices pared early gains on Thursday to hover near their lowest levels in more than a month, bruised by an elevated dollar and yields after the U.S. Federal Reserve signalled it might raise interest rates sooner than expected.

 

·         Gold is often seen as a hedge against inflation, though a rate hike by the Fed will increase the opportunity cost of holding bullion and dull its appeal.

 

·         Spot gold was steady at $1,813.80 per ounce, as of 0654 GMT, having climbed up to 0.7% earlier in the session on bargain-hunting.

 

·         U.S. gold futures were down 2.6% at $1,812.20 per ounce.

 

·         “Gold was crushed overnight by a more hawkish Fed. It has staged a modest recovery in Asia, but the rally looks more like speculative dip buying and fast money short-covering, than a vote of confidence in the yellow metal,” said Jeffrey Halley, a senior market analyst at OANDA.

 

·         “The recovery in gold should be approached with caution as we have yet to see how a change in tone from the Fed will fully play out in markets. Gold’s daily close below $1,797.50 will signal a deeper correction is in prospect.”

 

·         Gold prices slipped more than 2.5% on Wednesday, hitting their lowest since May 6, after hawkish comments from Fed officials lifted the dollar to a two-month high, while U.S. Treasury yields jumped.

 

·         The Fed on Wednesday began closing the door on its pandemic-driven monetary policy with 11 of 18 central bank officials projecting at least two quarter-point interest rate increases for 2023.

 

·         “Bargain-hunting, safe-haven demand and buying the dips emerged as gold fell to $1,804, although the change in Fed’s script had benefited the dollar and Treasury yields rather than precious metals in the immediate term,” Avtar Sandu, a senior commodities manager at Phillip Futures, said in a note.

​·         Gold Price Technical Analysis

After the Fed’s announcement, the price of gold confirmed a head and shoulders formation in the sense that the market reached the pattern’s measured move. Yet, the measured move is only the minimum distance the market needs to travel after such a reversal pattern. Hence, more downside may lie ahead.

 

Bears might want to remain on the short side with a stop at $1,900 and targeting a move to $1,600 and below.

 

·         Silver was steady at $26.97 per ounce, while palladium dropped 1% to $2,770.72 and platinum was flat at $1,122.

 

 

·         French Finance Minister reaffirms he has no plans to raise taxes

 

 

·         Australian central bank cancels bond operation as banks report outages

 

The Reserve Bank of Australia (RBA) is cancelling Thursday’s operation to buy long-dated government bonds because of technical difficulties, it said, as reports circulated of internet outages at several commercial banks and major firms.

·         NZ economy surges as housing, retail drive post-COVID recovery

 

·         Asia has wary welcome for G7′s answer to Belt and Road

 

 

·         China's new home price growth stabilises in May amid raft of cooling measures

New home prices in China rose in May at the same pace as in April, official data showed on Thursday, but there were signs that government measures to cool the market were beginning to temper gains.

Average new home prices in 70 major cities grew 0.6% in May, unchanged from April, according to Reuters calculations based on data released by the National Bureau of Statistics. 

On a year-on-year basis, new home prices rose 4.9%, slightly faster than a 4.8% rise in April.

 

 

·         China disease expert says COVID-19 origins probe should shift to U.S.- Global Times 

A senior Chinese epidemiologist said the United States should be the priority in the next phase of investigations into the origin of COVID-19 after a study showed the disease could have been circulating there as early as December 2019, state media said on Thursday.

 

 

·         Taiwan May export orders seen up for 15th straight month: Reuters poll

Taiwan’s export orders likely rose in May for the 15th month in a row, a Reuters poll showed, buoyed by strong sustained demand for technology products during lockdowns as millions of people work from home and take classes remotely.

The median forecast from a poll of 10 economists expects export orders to surge 40.15% from the year-ago period. Forecasts for growth ranged from 20.5% to 45%.

 

 

·         N.Korea gives $300,000 for Myanmar in first financial aid since 2005 

North Korea has provided $300,000 to a U.N.-led humanitarian aid initiative for Myanmar, marking its first donation to other countries since 2005, U.N. data showed on Thursday.

 

·         India puts on hold proposal to cut import duty on edible oils: sources

 

·         Indonesia c.bank keeps rates unchanged for 4th straight meeting

Indonesia’s central bank held its main interest rates at a record low for a fourth straight meeting, seeking to keep monetary policy accommodative as COVID-19 cases rise, while also aiming to keep financial markets stable amid global uncertainty.

Bank Indonesia (BI) kept the benchmark 7-day reverse repurchase rate at a record low of 3.50%, as expected by all 26 economists in a Reuters poll.

 

 

Reference: CNBC, Reuters