Gold heads for weekly fall as dollar rises
· Spot gold drops as dollar offsets support from lower US bond yields
· Gold prices edged lower on Friday, heading for their first weekly decline in five, as a stronger dollar made bullion more expensive for holder of other currencies and offset support from lower US bond yields and weak economic data.
· Spot gold was down 0.2% at $1,803.33/oz, at 3.14am GMT. Bullion is down 0.4% this week. US gold futures fell 0.1% to $1,803.90/oz.
· “Gold being a go to alternative for paper currency and with seeing the dollar bit higher is the catalyst that is nudging gold back,” said DailyFX currency strategist Ilya Spivak.
· The dollar index held close to a three and a half month peak against its rival and was heading for its second straight weekly rise.
· Risk appetite in wider financial markets for most of this week was fragile due to worries over the coronavirus Delta variant affecting global economic recovery, sending investors to take refuge in the dollar.
· “We expect gold to remain range bound in the coming weeks. However, inflation will remain a key driver of gold prices in the coming months, supporting prices in the near term,” Fitch Solutions said in a note.
· Focus now shifts to next week’s US Federal Reserve meeting for more clues on monetary policy.
· The European Central Bank on Thursday pledged to keep interest rates at record lows for even longer and warned that the rapidly spreading Delta variant poses a risk to the eurozone’s recovery.
· Offering some respite to gold, yields on US Treasuries eased after an auction of $16bn in 10-year Treasury inflation-protected securities was bid at a record low.
· Data showed the number of Americans filing new claims for unemployment benefits rose to a two-month high last week.
· Gold Price Forecast: XAU/USD’s bearish potential to remain intact, focus on weekly close
Gold bears yearn for a sustained break below $1799-$1796 support area, where the 21-Daily Moving Average (DMA) and 100-DMA intersect.
A daily closing below that level is needed to revive the bearish momentum.
Although, gold price may find immediate support at Thursday’s low of $1793, below which the $1790 round number could be challenged.
Acceptance below the latter could trigger a drop towards the July lows of $1767.
The 14-day Relative Strength Index (RSI) remains below the 50.00 level, suggesting that the downside risks continue to persist.
On the flip side, minor resistance awaits around $1809, intraday’s and Thursday’s highs.
The 200-DMA at $1824 will continue to guard the upside. Ahead of that the July 21 high of $1814 could test the bullish commitments en-route the critical 200-DMA hurdle at $1823.
· Silver slipped 0.5% to $25.34/oz and was set for its third weekly fall. Palladium rose 0.3% to $2,725.19/oz and platinum was flat at $1,092.64/oz.
· Rapid German recovery triggering inflation bottlenecks - PMI
The German economy continued its strong recovery in July with IHS Markit’s flash composite Purchasing Managers’ Index (PMI) hitting its highest level in nearly a quarter of a century, creating inflationary bottlenecks.
The flash composite PMI clocked a reading of 62.5 from 60.1 in June.
Activity in the service sector was expanding very strongly, with the services index standing at 62.2, up from 57.5, its highest level since 1997. Manufacturing growth was also robust, with the index standing at 65.6, although this was only a three-month high.
· Delta variant is one of the most infectious respiratory diseases known, CDC director says
The delta Covid variant is one of the most infectious respiratory diseases ever seen by scientists, the director of the Centers for Disease Control and Prevention said Thursday.
The variant is highly contagious, largely because people infected with the delta strain can carry up to 1,000 times more virus in their nasal passages than those infected with the original strain, according to new data.
· Australia tightens Sydney lockdown in 'national emergency' COVID-19 scare
Australia's New South Wales state on Friday reported its biggest daily rise in new COVID-19 cases this year, prompting a tighter lockdown in Sydney in what state officials called a "national emergency" that has already derailed a broad economic rebound.
State Premier Gladys Berejiklian also raised the likelihood that stay-home orders for the country's biggest city would be extended beyond the current end-date of July 30.
· Singapore retailers are reeling from further Covid measures as sales drop 70% for some
· Philippines to bar travel from Malaysia, Thailand to curb Delta's spread
The Philippines will ban the entry of travellers coming from Malaysia and Thailand in a bid to prevent the spread of the highly transmissible Delta COVID-19 variant, the presidential spokesperson said on Friday.
· Asia Pacific U.S. seeks 'reliable, predictable' way forward with N. Korea
The United States is seeking a "reliable, predictable and constructive" way to secure progress in stalled denuclearisation talks with North Korea, U.S. Deputy Secretary of State Wendy Sherman said on Friday.
Reference: CNBC, Reuters, Business Day, FXStreet
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