Gold firmed near the key $1,800 level on Tuesday, as the dollar softened and U.S. real yields plunged, though gains were limited by investor caution ahead of a Federal Reserve meeting that could provide details on stimulus tapering.
· Spot gold rose 0.2% to $1,800.46 per ounce by 02:39 p.m. EDT (1839 GMT).
· U.S. gold futures settled little changed at $1,799.8.
· Dollar edges lower as investors await Fed meeting outcome
The greenback was 0.263% lower at 92.362at 2:15 p.m.ET
The euro edged up 0.26%, changing hands at $1.1833 versus the greenback, while sterling gained 0.55% to $1.38925 as early data seemed to show an ebb in surging COVID-19 cases in Britain in spite of the removal of many social curbs last week.
· TREASURIES-U.S. yields sink on growth fears; focus on Fed policy update
U.S. Treasury yields tumbled on Tuesday as risk appetite languished amid lingering concerns about high inflation and the fast-spreading Delta coronavirus variant that could thwart global economic growth.
In late afternoon trading, the U.S. 10-year Treasury yield slid to 1.239% from 1.276% late on Monday.
U.S. 30-year yields dropped to 1.891% from Monday's 1.925%.
· The precious metal has been confined to a tight trading range in recent weeks after briefly crossing $1,830, failing to capitalise on subdued U.S benchmark Treasury yields.
“Gold has to be looked at from a cross asset perspective and not just from bonds, and with strong returns in equity markets that impede capital flows into gold,” said Bart Melek, head of commodity strategies at TD Securities.
“To break out higher, there has to be some negativity and that is right now only being manifested in bond yields,” Melek said, while adding that weaker economic readings ahead would likely push gold prices higher again.
· Investors are keeping a watch on how the Fed balances accelerating inflation with the increased economic threat of the Delta coronavirus variant, in its two-day policy meeting beginning on Tuesday.
· Lukman Otunuga, senior analyst at FXTM, also said in a note that gold could remain range-bound until the Fed meeting.
· “A hawkish central bank could deliver a heavy blow to zero-yielding gold. However, a meeting filled with doves may boost the precious metal’s allure, possibly sending prices higher.”
· Elsewhere, silver slipped 1.8% to $24.71 per ounce, platinum shed 1.1% to $1,052.96 and palladium fell 1.8% to $2,609.14.
· U.S. consumer confidence at 17-month high; business spending on equipment strong
U.S. consumer confidence inched up to a 17-month high in July, with households' spending plans rising even as concerns about higher inflation lingered, suggesting the economy maintained its strong growth clip early in the third quarter.
The Conference Board said its consumer confidence index ticked up to a reading of 129.1 this month, the highest level since February 2020, from 128.9 in June. Economists polled by Reuters had forecast the index would fall to 123.9.
Consumers' inflation expectations over the next 12 months dipped to 6.6% from 6.7% last month. The Conference Board survey places more emphasis on the labor market. The University of Michigan's survey of consumers showed sentiment falling in early July because of inflation concerns.
· U.S. home prices rose in May at fastest pace in nearly 17 years - S&P/Case-Shiller
U.S. single-family home prices in 20 key urban markets rose in May from a year earlier at the fastest pace in nearly 17 years, a closely watched survey said on Tuesday.
The S&P/Case Shiller composite index of 20 metropolitan areas gained 17.0% through the 12 months ended in May, the largest annual price increase since August 2004. A Reuters poll of economists had forecast a 16.4% increase.
On a month-to-month basis, the 20-city composite index rose 1.8% from April. Economists polled by Reuters had been expecting a 1.6% increase.
· The Fed could sound more worried about the virus and less ready to tighten policy
· IMF warns that inflation could prove to be persistent and central banks may need to act
· IMF raises growth forecasts for rich nations, dims outlook for developing world
· McConnell says all U.S. Senate Republicans will vote no on $3.5 trln budget bill -Fox News interview
U.S. Senate Minority Leader Mitch McConnell said on Thursday all Republicans in the chamber will vote no on a potential $3.5 trillion budget bill Democrats are working on.
· Oil prices steady as virus spread counters tight supplies
Oil prices held steady on Tuesday ahead of the release of U.S. inventory data as investors worried that global demand could be dented by surging COVID-19 cases, even though supplies are tightening and vaccination rates rising.
U.S. crude oil, gasoline and distillate inventories fell last week, according to two market sources, citing American Petroleum Institute figures on Tuesday. U.S. crude prices settled slightly lower and pared losses after the API report.
The API data showed crude stocks fell by 4.7 million barrels for the week ended July 23 and gasoline inventories fell by 6.2 million barrels and distillate stocks fell by 1.9 million barrels, according to the sources, who spoke on condition of anonymity.
Official inventory data is due from U.S. Energy Information Administration on Wednesday.
Brent futures slipped 2 cents to settle at $74.48 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 26 cents, or 0.4%, to settle at $71.65. That was the first decline for Brent in six days.
· CORONAVIRUS UPDATES:
According to Our World in Data, 13.81% of the global population is fully vaccinated against Covid-19 and 13.46% are partially inoculated. This shows the stark difference between advanced and developing economies.
· Centene says COVID-19 costs could rise in coming quarters as Delta poses threat
Centene Corp on Tuesday became the latest U.S. health insurer to warn of higher COVID-19 costs in the coming quarters due to the impact of the Delta variant, which has become the dominant coronavirus strain globally.
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