MTS Help Center

Gold rebounds after steep selloff as dollar rally stalls

Gold on Monday clawed back some losses from its biggest weekly percentage drop since March 2020, as a pause in the U.S. dollar’s rally helped restore the metal’s allure.

·         Spot gold was up 1.1% at $1,782.83 per ounce by 1:48 p.m. EDT (1748 GMT), while U.S. gold futures settled up 0.8% at $1,782.90.

 

·         “People are using the correction to buy gold, at these price levels, there is value to hold positions in gold, especially for the long run,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago

 

Streible, however, predicted gold would drift above $1,800 an ounce, citing an “overbought” dollar, the Fed’s continued bond purchases and interest rates that will not rise anytime soon.

 

·         Gold prices fell 6%, or $113 an ounce, last week as the U.S. Federal Reserve signaled it would soon start tapering its asset purchases and could start raising interest rates in 2023.

 

But the dollar index has retreated from 2-1/2-month highs, prompting investors to turn to gold, which fell for six straight sessions before Monday’s bounce.

 

U.S. 10-year Treasury yields also rose from a four-month low, raising non-yielding bullion’s opportunity cost. .

 

·         Bank of America Global Research said that given a more hawkish Fed, the risk of rising real rates would keep gold prices capped into the end of the year.

 

·         Market participants will listen now to congressional speeches from a number of U.S. central bank officials, including Fed Chair Jerome Powell, who is due to speak on Tuesday.

 

·         SPDR GOLD HOLDINGS:

 

·         Commerzbank expects gold to rise to $2,000/oz by end of 2021 – Reuters

Commerzbank expects inflation concerns to lift the gold price up to $2,000/oz by the end of the year, as reported by Reuters.

Commerzbank also sees silver price rising to $30 per troy ounce end-2021 and forecasts palladium at $2,800 per troy ounce.

Commerzbank think ETF investor flow will be important for gold moving forward

 

·         In other precious metals, platinum rose 2.5% to $1,060.05 per ounce, while palladium climbed 4.5% to $2,575.24 after tumbling more than 11% last week.

 

·         Global palladium markets have been in deficit this year due to rebounding economic growth and tighter emissions standards that boosted demand from automobiles. Another negative factor has been supply glitches at Russia’s Nornickel.

 

·         Analysts at trading firm Heraeus said, however, that supply chain disruptions in automobiles could ease the tightness in palladium markets.

 

·         Elsewhere, silver rose 0.6% to $25.95 an ounce.

 

 

·         Powell notes economic improvement, but says the pandemic remains a risk

Federal Reserve Chairman Jerome Powell said in testimony prepared for delivery to Congress this week that the economy is growing but faces continued threats from the coronavirus pandemic.

 

·         POWELL Due to testify on the Fed’s emergency lending programs and current policies before the House Select Subcommittee on the Coronavirus Crisis, via satellite;

 

·         Biden expected to meet with lawmakers this week to discuss latest infrastructure proposals

President Joe Biden expects to meet with lawmakers this week as a group of Democrats and Republicans try to forge an infrastructure plan that could get through Congress with bipartisan support, White House press secretary Jen Psaki said Monday.

 

·         Biden, Congress divided on how to pay for infrastructure

 

·         China’s central bank urges Alipay and banks to crack down on crypto speculation

China’s central bank on Monday said it had urged several payment firms and banks to clamp down on cryptocurrency speculation, adding to calls from Beijing for restrictions on bitcoin and other digital currencies.

 

·         Cramer says he ‘sold almost all’ of his bitcoin, fearing China has had it with crypto

CNBC’s Jim Cramer said Monday he’s offloaded most of his bitcoin holdings, expressing concerns around the recent crackdown on crypto mining by the Chinese government and bitcoin’s role in some ransomware attacks.

“Sold almost all of my bitcoin. Don’t need it,” Cramer said on “Squawk on the Street,” more than two months after he first indicated he trimmed his position and paid off a home mortgage with those profits.

The price of bitcoin fell more than 6% on Monday to roughly $33,000 per token, around a two-week low. The move lower follows a report in the Chinese Communist Party-backed Global Times newspaper that said more than 90% of the country’s mining capacity is shut down after authorities in the province of Sichuan closed “many mines” located there.

 

·         Sluggish household income growth is holding back Chinese consumer spending, says Barclays

 

·         Biden administration slaps sanctions on Belarus after it forcibly diverted passenger jet to arrest opposition journalist

 

·         CORONAVIRUS UPDATES:

 

 

WHO says delta is the fastest and fittest Covid variant and will ‘pick off’ most vulnerable

 

Reference: CNBC, Reuters, Worldometers