Gold listless as resilient dollar curbs safe-haven buying
Gold was subdued in volatile trade on Tuesday as the dollar strengthened, curbing inflows into the safe-haven metal despite some concerns over a surge in COVID-19 cases.
· Spot gold was little changed at $1,811.51 per ounce by 1:33 p.m. ET, while U.S. gold futures settled up 0.1% to $1,811.40.
· “We’ve seen volatility in gold pick up quite a bit and that has knocked out some of the long positions,” said Bart Melek, head of commodity strategies at TD Securities, also attributing gold’s decline to a weaker dollar.
· The U.S. dollar scaled a 3-1/2-month high, denting gold’s allure.
· A surge in coronavirus cases in the United States and other countries however spurred some safe-haven buying of bullion in recent sessions, with gold rebounding as much as 1.7% from Monday’s one-week trough.
· “A lot of people in the gold market have taken their eyes off the ball this year, but if we get more bad news on the COVID front and equities weaken, you could get just that flight- to-safety buy in a market that can wake up pretty quick,” said Bob Haberkorn, senior market strategist at RJO Futures.
· Meanwhile, data on Tuesday showed Swiss gold exports to India edged higher last month, while shipments to mainland China fell.
· “Physical demand has scope to buffer the downside for gold as central banks remain net buyers and in light of pent up consumer demand as India’s stores reopen,” said Suki Cooper, analyst at Standard Chartered.
· Elsewhere, platinum fell 0.4%, to $1,070.46 per ounce, while palladium rose 1.9% to $2,645.30.
· This quarter could be the least supportive quarter for platinum and palladium group metals as supply returns and U.S. and European auto production slows due to semiconductor shortages, Cooper said.
· Silver shed 1% to $24.96.
· U.S. infrastructure deal teeters after Republicans reject IRS funding
The White House and U.S. congressional negotiators are scrambling to salvage a $1.2 trillion bipartisan infrastructure deal after Republicans balked at funding to enforce existing tax laws - a key way to pay for the plan - leaving both sides searching for a way forward.
· U.S. housing starts rise in June, while building permits fall sharply
U.S. homebuilding increased more than expected in June, though expensive lumber, as well as shortages of labor and land, continued to constrain builders’ ability to fully take advantage of robust demand for housing.
Housing starts rose 6.3% to a seasonally adjusted annual rate of 1.643 million units last month, the Commerce Department said on Tuesday. Data for May was revised down to a rate of 1.546 million units from the previously reported 1.572 million units.
Permits for future homebuilding fell 5.1% to a rate of 1.598 million units in June.
· ADB trims developing Asia's 2021 economic growth forecast to 7.2%
Developing Asia’s economic growth this year will be slightly lower than previously projected, the Manila-based Asian Development Bank said on Tuesday, citing the resurgence of COVID-19 infections in countries.
· CORONAVIRUS UPDATES:
· Delta variant behind more than 80% of U.S. cases, Fauci says
The Delta variant of the coronavirus is the cause of more than 80% of new U.S. COVID-19 cases, but the authorized vaccines remain more than 90% effective in preventing hospitalizations and deaths, said top U.S. infectious disease expert Anthony Fauci during U.S. Senate hearing on Tuesday.
Reference: CNBC, Reuters, Worldometers
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