Gold prices climbed to a one-month peak on Thursday after U.S. Federal Reserve Chair Jeremy Powell soothed investor fears by reassuring that he was in no rush to tighten policy, lifting the metal’s appeal as an inflation hedge.
· Spot gold was up 0.3% at $1,832.23 per ounce, as of 0752 GMT. Earlier in the session, bullion hit a peak of $1,833.65, its highest since June 16.
· U.S. gold futures climbed 0.4% to $1,832.90.
· Powell stuck to the view on Wednesday that the current price increases are transitory and the Fed expects to continue its bond-buying until there is “substantial further progress” on jobs, with interest rates pinned near zero likely until at least 2023.
His comments came on the heels of a robust U.S. producer prices data.
Large stimulus measures tend to support gold, which is often considered a hedge against inflation and currency debasement.
Powell’s comments muted the dollar, while benchmark 10-year U.S. Treasuries yields fell, reducing the opportunity cost of holding bullion, which pays no return.
· “We are not saying that there is no strong momentum in the economy, but there is suddenly a question can such growth rate sustain,” Hitesh Jain, lead analyst at Mumbai-based Yes Securities, said.
“As long as the balance sheet remains in an expansionary mode and interest rate being so low, gold still has the potential to move towards $2,000 by the end of this year,” Jain added.
· On the technical front, spot gold may test a resistance at $1,833 per ounce, a break above could lead to a gain at $1,853, according to Reuters technical analyst Wang Tao.
· Elsewhere, silver rose 0.4% to $26.34 per ounce.
· Platinum hit a one-month peak of $1,142.35 per ounce and was last up 0.9% at $1,138.66 per ounce.
· China's share of bitcoin mining slumped even before Beijing crackdown, research shows
The country's share of the power of computers connected to the global bitcoin network, known as "hash rate," fell to 46% in April this year from 75.5% in September 2019, according to the data from the Cambridge Centre for Alternative Finance.
In the same period, the United States' share of hash rate jumped to 16.8% from just over 4%, making it the second-largest producer of bitcoin. Kazakhstan's share also rose to around 8%, with Russia and Iran the other major producers.
· China says U.S. and Beijing should try to implement Phase 1 trade deal – ministry
China and the United States should work together to create the atmosphere and conditions to push for the implementation of the Phase 1 trade deal, Gao Feng, spokesman for China’s commerce ministry, said on Thursday.
Gao was speaking at news conference, answering a question about whether China was implementing the Phase 1 trade deal.
· China's economic recovery loses some steam, investors eye more policy easing
China’s economy grew slightly more slowly than expected in the second quarter, weighed down by higher raw material costs and new COVID-19 outbreaks, as expectations build that policymakers may have to do more to support the recovery.
Gross domestic product (GDP) expanded 7.9% in the April-June quarter from a year earlier, official data showed on Thursday, missing expectations for a rise of 8.1% in a Reuters poll of economists.
Growth slowed significantly from a record 18.3% expansion in the January-March period, when the year-on-year growth rate was heavily skewed by the COVID-induced slump in the first quarter of 2020.
Retail sales and industrial output grew more slowly in June, the latter dragged by a sharp fall in motor vehicle production, while NBS data also showed a cooling in China’s housing market, a key engine of growth.
· China June home price growth slows for first time since Nov
· Indian and Chinese foreign ministers discuss border standoff
The foreign ministers of India and China met in Tajikistan on Wednesday with New Delhi stressing that a military standoff along a mountainous border area was profoundly disturbing their ties, and warning that any unilateral change in the status quo by Beijing was unacceptable.
CORONAVIRUS UPDATES:
· HSBC sees Singapore as a standout among Southeast Asia’s markets as region grapples with Covid
As most of Southeast Asia continues to grapple with Covid, Singapore stocks are a standout regionally, according to HSBC Private Banking & Wealth Management’s James Cheo.
· Indonesia is bracing for worsening Covid outbreak as cases spike
· Covid cluster at hotel hosting Olympic athletes raises concerns as Tokyo cases surge
A Covid-19 cluster at a Japanese hotel where dozens of Brazilian Olympic team members are staying raised new concerns about infections at the Tokyo Games, as the host city recorded its highest number of new cases for six months.
Just over a week before the opening ceremony, the spreading infections highlight the risks of staging the world’s biggest sports event during a pandemic even without spectators in sports venues.
· South Korea reports 1,600 new Covid cases as it tackles outbreak on military vessel
· UK hiring surged in June as economy reopened - ONS
Reference: Reuters, CNBC
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