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* Gold offered for the first time in July, reverses from three-week top.

* Covid woes, indecision over central bank measures weigh on risk appetite.

* ECB special meeting, US Jobless Claims will be the key.

 

Gold rallied over $15 from the daily swing lows and moved back above the $1,810 level, or closer to multi-week tops during the early European session. Worries about the economic fallout from the spread of the highly contagious Delta variant of COVID-19 took its toll on the global risk sentiment. This was evident from a steep decline in the US equity futures, which provided a goodish lift to the traditional safe-haven asset – gold.

The risk-off flow was reinforced by an extension of the steep decline in the US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond dropped below the 1.30% threshold, or multi-month lows on Thursday, which forced investors to unwind their US dollar bullish bets. This, in turn, was seen as another factor that acted as a tailwind for dollar-denominated commodities, including gold.

 

That said, indications that the Fed is moving towards tightening its monetary policy as soon as this year should help limit any deeper losses for the greenback. The June FOMC meeting minutes released on Wednesday revealed the Fed officials agreeing on the need to be ready to act if inflation or other risks materialize. This suggests that QE tapering discussions could begin in the coming months, which should keep a lid on any runaway rally for the non-yielding gold.

Amid these plays, World Health Organization (WHO) official Mike Ryan warned, per The Guardian, of ‘epidemiological stupidity’ of early Covid reopening.

Elsewhere, the latest FOMC minutes marked upside risk to inflation while also rejecting immense pressure to act immediately. Following the minutes, Atlanta Federal Reserve President Raphael Bostic said, per Reuters, “A new rise in coronavirus infections driven by the more virulent Delta variant could cause consumers to "pull back" and slow the US recovery.”

It’s worth noting that geopolitical tension in the Middle East and Sino-American tussles also heavy the market’s mood.

Looking forward, weekly US Jobless Claims may entertain gold traders but major attention will be given to the European Central Bank’s (ECB) Special Meeting as policymakers jostle over inflation target. Above all, risk catalysts are crucial to watch for near-term direction.

Following that, a horizontal from late March area around $1,756 will be in the spotlight.

Alternatively, a daily closing beyond the 200-day EMA level of $1,808 will need validation from May 13 low surrounding $1,809 to aim for May 10 top of $1,845.

 

Overall, gold bulls seem to have tired and hence sellers may return should the latest risk-off mood prevail for long.

 

·         Gold Futures: Extra gains should not be ruled out

 

Gold now looks to the 200-day SMA

Wednesday’s uptick in gold prices came amidst the continuation of the uptrend in open interest, which is indicative that further upside should not be ruled out. That said, and following the re-test of the $1,800 mark per ounce troy, the yellow metal now faces the next target at the 200-day SMA near $1,830.

 

·         Gold Violates Double Top Level – Is it Going After $1,828?

S3 1,777.75

S2 1,790.64

S1 1,797.18

Pivot Point: 1,803.53

R1 1,810.07

R2 1,816.42

R3 1,829.31

 

·         UK house prices rise by most since 1988, but activity begins to cool- RICS

 

·         UK PM Johnson's new COVID gamble worries some scientists

British Prime Minister Boris Johnson plans to reopen England's economy from coronavirus lockdown on July 19, but if he does so, it won't be without disquiet from some of the scientists whose advice he has followed thus far.

Despite one of the world's highest vaccination rates, Britain is facing a new wave of COVID-19. Johnson is taking a gamble: rather than shutting the country down, he is aiming to live with the virus in what is a world-first test case of the ability of vaccines to protect from the Delta variant.

·         France's Le Maire: still sees 2021 French economic growth at 5%

French Finance Minister Bruno Le Maire on Thursday said he still targeted economic growth of 5% this year and urged the French people to get a COVID-19 jab, saying he would not want a worsening COVID situation to derail France’s economic recovery.

·         EXCLUSIVE Turkey's banks set for capital healing after pandemic battle –sources

·         Sydney sees worst pandemic day of 2021 two weeks into lockdown

 

Australia's New South Wales (NSW) state on Thursday reported its biggest daily rise in locally acquired cases of COVID-19 this year as officials struggle to stamp out a growing cluster of the highly infectious Delta variant.

The spike in cases after two weeks of a hard lockdown in Sydney, Australia's largest city, raised the prospect of a further extension in restrictions, with officials blaming illegal family visits for a continuing rise in infections3

·         China says measures against Ant to be imposed on other payment firms

China’s central bank said on Thursday that measures against Alibaba’s Ant Group will also be imposed on other payment service companies.

·         Japan to declare Covid state of emergency for Tokyo, casting a shadow over Olympic

Japan’s government is set to declare a state of emergency for Tokyo through August 22 amid a new wave of infections, a key minister said on Thursday, casting a shadow over the Olympic Games.

Japan’s economy minister Yasutoshi Nishimura, who is heading the government’s coronavirus response, said the state of emergency is set to begin on July 12.

·         Organisers to ban Olympic spectators as Tokyo declares coronavirus emergency-report

 

 

·         Japan service sector mood up but renewed COVID curbs cloud outlook

 

 

·         BOJ to offer zero rate, long-term loans in climate scheme - sources

Japan’s central bank will likely offer zero interest, long-term funds to commercial lenders that provide loans or investment for activities aimed at combating climate change, said sources familiar with its thinking.

·         Thai authorities propose tighter curbs as COVID-19 deaths climb

Thailand's health ministry said on Thursday it had proposed new travel curbs and tighter restrictions in high-risk areas to contain COVID-19 cases, as the country reported a daily record of 75 deaths from the coronavirus.

·         Thai consumer confidence hits record low in June amid virus outbreak

Thai consumer confidence dropped to a record low in June, dented by the country's biggest coronavirus outbreak up to date, a survey showed on Thursday.

The outbreak has seen the most infections and deaths so far and the Southeast Asian country reported on Thursday a daily record of 75 new fatalities and 7,058 cases. read more

The consumer index of the University of the Thai Chamber of Commerce fell to 43.1 in June from 44.7 in May.

Thailand's slow vaccine rollout and sluggish economic recovery combined with political uncertainty has also undermined consumer confidence, university president Thanavath Phonvichai told a briefing.

·         Taiwan to offer further $5 bln in loans to support domestic investment

Taiwan's Cabinet said on Thursday the government plans to offer a further T$150 billion ($5.34 billion) in loans as part of a programme to encourage the island's companies to keep investing at home.

 

·         N.Korea reshuffle signals military policy not top priority now, analysts say