· Gold prices were flat on Wednesday, holding near the key psychological level of $1,800 per ounce, as investors await the U.S. Federal Reserve’s meeting for hints on policy tapering plans.
· Fed’s policy statement is due at 1800 GMT later in the day followed by a news conference by Chairman Jerome Powell. Investors will look for cues on when the central bank will begin to taper its monetary support.
· 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 early in the third quarter.
· The International Monetary Fund on Tuesday maintained its 6% global growth forecast for 2021, upgrading its outlook for the United States and other wealthy economies but cutting estimates for developing countries struggling with surging Covid-19 infections.
· Gold Price Forecast: XAU/USD breakout is imminent, FOMC awaited
Short-term technical outlook
From a technical perspective, nothing seems to have changed much for the metal and any subsequent move beyond the $1,810 level is likely to confront a stiff resistance near the very important 200-day SMA. The mentioned barrier is currently pegged near the $1,823 area, which if cleared will set the stage for additional gains. The XAU/USD might then accelerate the momentum towards the $1,845-46 region, en-route the next major hurdle near the $$1,866 area. Some follow-through buying has the potential to lift the commodity further and allow bulls to eventually aim to reclaim the $1,900 round-figure mark.
On the flip side, weakness below the $1,800 mark might continue to find decent support near the $1,790 area. This should now act as a key pivotal point for bearish traders, which if broken decisively might prompt some aggressive technical selling. The next relevant support is pegged near the $1,765-60 region before the metal eventually drops to challenge monthly swing lows, around the $1,750 region.
· Asian currencies may weaken in third quarter, gain strength in fourth quarter: BofA Securities
· BoE set to keep full-speed stimulus despite split over inflation risk
The Bank of England looks set to keep its stimulus running at full speed next week despite two policymakers breaking ranks to suggest that its nearly 900 billion pound ($1.2 trillion) bond-buying scheme might have to end early as inflation speeds up.
Britain’s economy is rebounding quickly from its almost 10% crash of 2020, when the country suffered a higher COVID-19 death toll and longer lockdowns than most other nations.
With consumers back in shops, bars and restaurants and fuel prices leaping as the global economy fires up, inflation has sped past the BoE’s 2% target and is on course to surpass 3%.
Many investors are betting the BoE will raise interest rates before the U.S. Federal Reserve, even though the U.S. economy has already recovered its pre-pandemic size, unlike Britain’s.
Claudio Piron of BofA Securities says the export cycle will drive currency appreciation in Asia and the region’s vaccination rates will improve toward the fourth quarter of 2021.
· South Korea reports its highest Covid-19 daily count as fourth wave continues
South Korea on Wednesday reported 1,896 new Covid-19 cases for Tuesday, its highest-ever daily increase, as the country struggles to subdue a fourth wave of outbreaks fanned by the more contagious delta variant of the coronavirus.
The daily tally broke a previous record set on July 22 as infections are spreading beyond the capital Seoul and its neighboring regions where the toughest social distancing rules are in place.
· Sydney adds four weeks to lockdown as Australia COVID-19 cases grow
· U.S. concern over China nukes buildup after new silos report
The Pentagon and Republican congressmen on Tuesday aired fresh concerns about China's build-up of its nuclear forces after a new report saying Beijing was building 110 more missile silos.
· North, South Korea in talks over summit, reopening liaison office
North and South Korea are in talks to reopen a joint liaison office that Pyongyang demolished last year and hold a summit as part of efforts to restore relations, three South Korean government sources with knowledge of the matter said.
· Oil prices gain on U.S. fuel drawdown despite rising COVID-19 cases
Oil prices climbed on Wednesday after industry data showed U.S. crude and product stockpiles dropped more than expected last week, bolstering expectations that demand will outpace supply growth even amid a surge in COVID-19 infections.
Brent crude futures rose 38 cents, or 0.5%, to $74.86 a barrel at 0641 GMT, after shedding 2 cents on Tuesday in the first decline in six days.
U.S. West Texas Intermediate (WTI) crude futures were up 42 cents, or 0.6%, at $72.07 a barrel, reversing Tuesday's 0.4% decline.
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