Gold prices eased on Friday but remained on track for a fourth straight week of gains helped by U.S. Federal Reserve’s assurance to keep its accommodative monetary policy for economic recovery.
· Spot gold fell 0.3% to $1,823.66 per ounce by 0725 GMT, having hit $1,833.65 on Thursday, its highest since June 16. Bullion is up 0.8% this week.
· U.S. gold futures fell 0.2% to $1,825.40.
· “There has been a constant decline in yields even though inflation is moving up. It is an indication that maybe the global economy has seen the best and is going to slow down going forward... Because of that, gold looks attractive to us,” said Kunal Shah, head of research at Nirmal Bang Commodities in Mumbai.
“I don’t expect gold to go down below $1,800 in the near-term and it has the potential again to test $1,900.”
· Fed Chair Jerome Powell faced questions about inflation and banking regulation in a hearing before the Senate Banking Committee on Thursday, and repeated his pledge of “powerful support” to complete the U.S. economic recovery, sending U.S. Treasury yields to a one-week low.
· Lower interest rates decrease the opportunity cost of holding non-yielding gold, which is also considered a hedge against inflation that could result from widespread stimulus measures.
· Making gold expensive for holders of other currency, the dollar was headed for its best weekly gain in almost a month.
· Elsewhere, palladium rose 0.2% to $2,735.66 per ounce, but was headed for its first weekly decline in four.
· “We believe palladium has likely peaked this year and should trade lower into 2022,” UBS analyst Giovanni Staunovo said in a note, adding palladium auto catalyst demand might take a hit as a result of substitution from palladium to platinum.
· Platinum fell 0.6% to $1,131.50 per ounce, but was up 2.6% for the week.
· Silver fell 0.6% to $26.18 per ounce.
· ECB policymakers set for showdown on policy path
European Central Bank policymakers are set for a showdown next week as they chart a new policy path amid growing fears of a third wave of coronavirus infections.
· No evidence yet that it’s time for a 3rd booster, says former FDA director
· South Korea weighs tighter restrictions as Covid-19 cases surge
· Japan’s Suga risks becoming short-term leader as country struggles with Covid surge, Olympics
· New Zealand inflation rises by most in a decade
CPI rose a higher than expected 1.3% in the quarter ending June from 0.8% in the first quarter, according to data released by Statistics New Zealand on Friday, taking annual inflation to 3.3%, the highest since June 2011 and past the RBNZ’s target inflation band of 1%-3%.
· The G-20’s global crackdown could create a new kind of tax haven
The pact, championed by the OCED, is expected to put in place a minimum global corporate tax rate of 15%.
The aim is for world leaders to finalize the deal at an October summit in Rome.
Alex Cobham, chief executive of the Tax Justice Network, has described discussion and agreement on the OECD’s global corporate minimum tax as “historic,” but one that fails to deliver fair and effective reform.
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