MTS Help Center

· Gold edged higher on Friday after stagnant U.S. consumer spending tempered bets for early monetary policy tightening by the Federal Reserve, setting bullion on track for its first weekly gain in four.

· Spot gold inched 0.1% higher to $1,776.96 per ounce by 01:07 p.m. EDT, adding about 0.8% for the week thus far.

· U.S. gold futures were little changed at $1,782.80.

· “Gold has benefited from the lower-than-expected inflation print as concerns at the margin have eased over a sooner-than-expected timetable for tapering,” said Suki Cooper, an analyst at Standard Chartered.

The $1,770 per ounce level is a support in the near term, Cooper said, with resistance at the 100-day moving average.

· Data earlier showed the personal consumption expenditures (PCE) price index, the Fed’s preferred inflation measure, was below expectations in May. The data initially weighed on the dollar, but the currency has since steadied, slowing gold’s advance.

· “The market is taking a more sanguine view of the inflation prospects, tempering earlier expectations that inflation was going to more quickly become problematic,” said Kitco Metals senior analyst Jim Wyckoff.

· Gold prices posted sharp losses last week after the Fed projected rate increases as soon as 2023, prompting a sell-off of non-yielding bullion.

· Although prices have stabilized since then, bullion is still on shaky ground given mixed signals from the Fed, analysts said.

· Two Fed officials warned on Thursday that inflation could rise more than policymakers expected in the near term. They spoke after Fed chief Jerome Powell said inflation would not be the only factor determining interest rate decisions.

· “Importantly, from a technical perspective we have formed a bearish pattern on the gold chart that suggests maybe some downside selling pressure next week after this week’s pause,” Wyckoff said.

· Platinum advanced 1.3% to $1,106.50 per ounce.

· Palladium slipped 0.1% to $2,637.60.

· Silver rose 0.3% to $26.01.

· Fed's Kashkari says inflation will be temporary, workers will return

Minneapolis Federal Reserve President Neel Kashkari on Friday said he expects recent high inflation readings will not last and Americans will return to the labor market in large numbers in the fall.

"We should see a lot more labor supply in the fall," Kashkari said in a virtual event hosted by the Minnesota Council of Nonprofits and the Minnesota Council of Foundations, once the three main factors holding back labor supply - the closures of schools and daycare facilities, fear of the coronavirus, and extra unemployment benefits authorized by Congress - have faded.

· US annual Core PCE inflation rises to 3.4% in May as expected

Inflation in the US, as measured by the Personal Consumption Expenditures (PCE) Price Index, was 0.4% in May, the US Bureau of Economic Analysis reported on Friday. On a yearly basis, the PCE Price Index edged higher to 3.9% from 3.6%, compared to analysts' estimate of 4%.

More importantly, the annual Core PCE Price Index, the Federal Reserve's preferred gauge of inflation, rose to 3.4% in May, matching the market consensus.

Further details of the publication revealed that the Personal Income declined by 2% in the same period while Personal Spending remained unchanged on a monthly basis.

Market reaction

With the initial reaction, the greenback started to weaken against its rivals and the US Dollar Index was last seen losing 0.22% on the day at 91.60.

· Inflation looks bad now, but it’s pretty much sticking to the script

Markets took little notice of the Friday PCE reading, pushing stocks mostly higher and government bond yields up only slightly.

“It was right down the strike zone,” Mark Zandi, chief economist at Moody’s Analytics, said of Friday’s Commerce Department release. The PCE level is “consistent with the idea that the surge in inflation will be transitory, that it’s related to the reopening of the economy and some of disruptions that are resulting from that quick reopening.”

In the near term, at least, that notion that inflation is going to fade at some point is of cold comfort to those who’ve gotten socked with higher costs.

· UK inflation pressure could keep on building in 2022 - BoE's Haldane

· Britain could face food shortages due to lorry driver crisis

· China industrial profits rise 36.4% y/y in May, weaker than April

· China's industrial profit growth slows amid high raw material prices

· Iran's recovery seen as modest with return to original nuclear deal - IIF

· CORONAVIRUS UPDATES:

· FDA adds warning about rare heart inflammation to Pfizer, Moderna Covid vaccines

· WHO urges fully vaccinated people to continue to wear masks as delta Covid variant spreads

· Germany seeks to ban British travellers from EU - The Times

Germany will attempt to ban British travellers from the European Union regardless of whether or not they have had a COVID-19 vaccine, The Times reported on Monday.