MTS Help Center

Gold ticks up after Powell pledges not to raise rates quickly

 

·         Gold prices gained on Wednesday after U.S. Federal Reserve Chair Jerome Powell promised not to raise interest rates too quickly based only on the fear of coming inflation, although an uptick in the dollar kept prices in check.

·         Spot gold was up 0.1% at $1,780.06 per ounce, as of 0103 GMT.

·         U.S. gold futures were steady at $1,777.60 per ounce.

·         Powell on Tuesday reaffirmed the U.S. central bank’s intent to encourage a “broad and inclusive” recovery of the job market.

·         Gold tends to appreciate on expectations of lower interest rates, which reduce the opportunity cost of holding non-yielding bullion.

·         Benchmark 10-year Treasuries yields inched lower after Powell said there would be no Fed rate hike before recovery.

·         The Congressional testimony from Powell shows that President Joe Biden’s economic plan is working, a White House official said.

·         Meanwhile, the dollar index rose 0.1% against its rivals, making gold more expensive for holders of other currencies.

·         Bank of Japan board members agreed that the massive stimulus measures deployed by advanced nations may help quicken the pace of recovery in the Japanese and global economies, minutes of their April policy-setting meeting showed.

·         Japan’s factory activity expanded at the slowest pace in four months in June, in a sign momentum in the world’s third-largest economy was levelling out before Tokyo is set to host the Olympic Games next month.

·         Silver gained 0.2% at $25.80 per ounce, palladium eased 0.2% to $2,552.68. Platinum <XPT=> climbed 0.1% to $1,080.63.

 

·         Euro zone business activity surges by its fastest rate in 15 years

 

IHS Markit’s flash composite PMI for the euro zone, which looks at activity across both manufacturing and services, hit 59.2 in June versus 57.1 in May. A reading above 50 represents an expansion in economic activity.

 

The European Central Bank estimated earlier this month that the euro zone would grow at a rate of 4.6% this year and 4.7% next year — a stronger outlook from its March assessment.

 

However, economic uncertainty remains, notably due to the delta coronavirus variant which is leading to higher infections, and also labor market shortages — even in nations with a relatively high unemployment rate.

 

 

·         China condemns latest U.S. warship transit of Taiwan Strait

 

 

·         Bank of Japan policymakers saw prospects of quicker recovery in April

 

Minutes from the Bank of Japan’s April monetary policy meeting released Wednesday showed members agreed that stimulus measures, particularly those in advanced economies, could result in a “faster than expected” pace of recovery for Japan and other countries

 

 

·         Japan to consider tighter rules on foreign owners of domestic firms -Yomiuri

 

The Japanese government is looking at tightening regulations on foreign funds that hold stakes in domestic firms with important technology in areas such as nuclear power and defence, the Yomiuri newspaper reported on Wednesday.

 

The new rules will aim to prevent overseas funds and companies from slapping demands on Japanese companies that may weaken their competitive edge or lead to the leaking of technological expertise, the paper said, without citing sources.

 

 

Reference: CNBC, Reuters