Gold set for biggest weekly gain in over 2 months on dovish Fed stance
· Gold prices held near a two-week high on Friday, and were set for their biggest weekly gain in more than two months, on renewed signs that the U.S. Federal Reserve may not taper economic support and hike interest rates in the near term.
· Spot gold was steady at $1,827.70 per ounce, as of 0053 GMT, after having hit its highest since July 15 at $1832.40 on Thursday. Bullion was on track for its biggest weekly gain since May 21, having risen 1.5% so far.
· U.S. gold futures eased 0.2% to $1,827.70 per ounce.
· The dollar index was steady at a one-month low hit in the previous session, after the U.S. central bank said the job market still had “some ground to cover” before it would pull back on monetary stimulus.
· A weaker dollar makes gold cheaper for holders of other currencies.
· Data on Thursday showed the U.S. economy grew solidly in the second quarter, but fell short of analysts expectations.
· Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 0.6% to 1,031.46 tons on Thursday, marking the first inflow in about a month.
· Gold prices will average a little above their current level of $1,830 an ounce for the remainder of 2021 before edging lower next year as the global economy recovers and central banks begin to tighten monetary policy, a Reuters poll showed on Thursday.
· Gold Posts Big Gains This Week After Fed’s Cautious Mood
Early on Friday, the safe haven metal gold is trading close to the highest levels seen since two weeks and look all set to post the strongest weekly performance in over two months on the back of Fed’s cautious tones at the latest FOMC. At the time of writing, GOLD is trading at a little above $1,827.
Spot gold may rise to $1,842
This wave is expected to travel into a range of $1,842-$1,874
Spot gold may break a resistance at $1,832 per ounce and rise to $1,842, driven by a wave C.
This wave is expected to travel into a range of $1,842-$1,874.
The pause around $1,832 will be temporary. A retracement analysis on the fall from $1,916.40 to $1,749.20 reveals a failure of the metal to break the 50% level of $1,833 in its first attempt on July 15.
However, gold may succeed in its current attempt, as the wave C has a fierce character and may easily overcome this barrier.
· Spot gold to retest support at $1,789
Support is at $1,822, a break below which could cause a fall to $1,810. On the daily chart, the metal is riding on a wave c from $1,749.20, which is capable of travelling into $1,840-$1,897 range. In its full capacity, the wave c could extend to $1,988.
The pattern from the Nov. 30, 2020 low of $1,764.29 looks like an inverted head-and-shoulders, which will be confirmed when gold goes above $1,932.
Each reader should consult his or her own professional or other advisers for business, financial or legal advice regarding the products mentioned in the analyses.
· Another poll showed that analysts revised up their forecasts for palladium, with a chronic shortage of the metal used to reduce harmful engine emissions expected to keep prices close to record levels.
· Silver dipped 0.3% to $25.46 per ounce, palladium rose 0.4% to $2,655.21, while platinum fell 0.7% to $1,053.47
· Fed may not signal any tapering until September meeting: Former Fed aide
Danielle Dimartino Booth of Quill Intelligence, who was a former aide to ex-Dallas Fed President Richard Fisher, shares a possible taper timeline before Fed officials embark on a rate hike.
· Judy Shelton on whether Fed chair Jerome Powell should get another term
Judy Shelton, Independent Institute and former Federal Reserve Board nominee, joins ‘Squawk Box’ to discuss if billionaires should have to pay higher taxes and if she thinks Federal Reserve Chairman Powell should receive another term.
· Fiscal stimulus, vaccines likely fueled U.S. economic growth in the second quarter
· BNP Paribas posts a profit rise on retail rebound and lower provisions
French bank BNP Paribas (BNPP.PA) reported a 26.6% rise in net income in the second quarter, spurred by a rebound of French retail banking activity and as provisions for bad loans dropped back to pre-pandemic levels.
· China reports 64 new COVID-19 cases as Delta resurgence continues in Nanjing
· China July factory activity seen growing at a slightly slower pace: Reuters poll
China's factory activity likely expanded slightly less quickly in July, a Reuters poll showed on Friday, as the industrial sector's impressive recovery slowed on high raw material prices, government policies, seasonal rainfalls and rising COVID cases.
The official manufacturing Purchasing Manager's Index (PMI) is likely to edge lower to 50.8 in July from 50.9 in June, according to the median forecast of 25 economists polled by Reuters. A reading above 50 indicates expansion from the previous month.
· Japan to expand state of emergency as COVID-19 shadows Olympics
Japan's government on Friday proposed states of emergency through Aug. 31 in three prefectures near Olympic host Tokyo and the western prefecture of Osaka, as COVID-19 cases spike to records, overshadowing the Summer Games.
· Japan's output, job availability jump but COVID curbs to slow growth
Japan’s factory output jumped in June and job availability rose to the highest level in nearly a year, data showed, a sign robust overseas demand was offsetting the drag to consumption from the coronavirus pandemic.
Industrial output rose 6.2% in June after a sharp 6.5% drop in May, data showed on Friday, marking the highest growth since July last year and recovering to pre-pandemic levels.
Manufacturers surveyed by the government expect output to fall 1.1% in July but rise 1.7% in August, a sign robust global demand for machinery and cars will underpin Japan’s recovery.
Japan’s job market remains tight. An index gauging job availability rose to 1.13 from 1.09 in May, exceeding market estimates for a 1.10 reading and marking the highest level since May last year. The jobless rate fell to 2.9% from 3.0% in May.
Underscoring the fragile state of consumption, however, retail sales were up just 0.1% in June from a year earlier, compared with a median market forecast for a 0.2% gain.
Former Bank of Japan policymaker Takahide Kiuchi also expects the economy to grow around 2-3% in the current quarter instead of the initially projected double-digit expansion.
With the expected expansion, the state of emergency curbs could lead to a total loss of 2.19 trillion yen ($20 billion) for Japan’s economy, offsetting an estimated 1.67 trillion yen benefit from the Olympic Games, said Kiuchi, who is currently executive economist at Nomura Research Institute.
· North Korea's economy shrank most in 23 years amid COVID-19, sanctions - South Korea central bank
North Korea’s economy suffered its biggest contraction in 23 years in 2020 as it was battered by continued U.N. sanctions, COVID-19 lockdown measures and bad weather, South Korea’s central bank said on Friday.
Gross domestic product (GDP) in the isolated economy contracted 4.5% last year in real terms, the Bank of Korea (BOK) said on Friday, the worst since 1997 and reversing a 0.4% growth in 2019, the first expansion in three years.
· Clement Kwok, CEO and managing director of Hong Kong and Shanghai Hotels, says their business is still reeling from the travel restrictions due to the coronavirus, and he hopes recovery picks up as Hong Kong ramps up its vaccination drive.
· Malaysia’s daily new Covid cases per million people is now one of the highest globally
The Covid-19 outbreak in Malaysia has become one of the worst globally.
On a seven-day moving average basis, Malaysia recorded 483.72 confirmed Covid infections per million people on Wednesday — the eighth highest globally and top in Asia, according to the latest data compiled by online repository Our World in Data.
Meanwhile, the country’s daily reported deaths relating to Covid were around 4.90 per million people on Tuesday on a seven-day moving average basis. That’s the 19th highest globally and third highest in Asia, the data showed.
· Sydney readies for the army as lockdown fails to squash Delta outbreak
Sydney's poorest neighbourhoods on Friday braced for military enforcement of the city's toughest and longest lockdown of the COVID-19 pandemic as the infection numbers held persistently high five weeks since restrictions began.
· India reports most new COVID cases in three weeks
India reported 44,230 new COVID-19 cases on Friday, the most in three weeks, the latest evidence of a worrying trend of rising cases that has forced one state to lock down amid fears of another wave of infections.
· Philippines to place Manila area in lockdown to curb Delta variant
Reference: CNBC, Reuters, FXStreet, BRecorder
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