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Gold prices ticked higher on Monday, propped up by a weaker dollar and US bond yields, though an uptick in risk appetite took some shine off the safe-haven metal.

·         Spot gold rose 0.1% to $1,816.01 per ounce by 1:44 pm EDT (1744 GMT), having hit a session low of $1,804.49, while US gold futures settled up 0.3% at $1,822.20.

 

·         Restoring some of gold’s appeal, the dollar index fell 0.1% against its rivals and benchmark US 10-year Treasury yields dropped to a near two-week low.

 

·         Focus now shifts to July’s US non-farm payroll numbers, due on Friday, expected to shed more light on the health of the labour market.

 

·         “The non-farm jobs report is likely to be the main focal point for gold traders, as it could impact the Fed’s decision on the timeline of tapering quantitative easing,” said Fawad Razaqzada, analyst with ThinkMarkets.

 

“It is also worth keeping a close eye on the COVID situation, for if the situation gets bad, it could negatively impact growth and in turn the Fed’s policy, potentially causing the dollar to weaken and supporting gold.” But, limiting bullion’s gains, the US S&P 500 index rose and wasn’t far off record highs.

 

·         “There’s a slight lesser need for safe havens as the equity markets are surging once again,” said David Meger, director of metals trading at High Ridge Futures.

 

“However, the underlying premises post (the) Federal Reserve meeting is an environment that is conducive to the yellow metal moving forward.” Fed Chair Jerome Powell last week said the job market still had “some ground to cover” before it could pull back its support to the economy, propelling gold prices to a two-week high.

 

·         Elsewhere, silver was steady at $25.47 per ounce, platinum rose 0.8% to $1,057.30, and palladium gained 0.8% to $2,681.57.

 

·         U.S. manufacturing growth cooling; bottlenecks starting to abate

U.S. manufacturing activity grew at a slower pace in July for the second straight month as raw material shortages persisted, though there are signs of some easing in supply-chain bottlenecks.

The survey from the Institute for Supply Management (ISM) on Monday showed a measure of prices paid by manufactures fell by the most in 16 months, while the supplier deliveries index retreated further from a 47-year high touched in May.

The ISM's index of national factory activity fell to 59.5 last month, the lowest reading since January, from 60.6 in June. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. Economists polled by Reuters had forecast the index would be little changed at 60.9.

 

·         U.S. construction spending inches higher in June

U.S. construction spending rose by 0.1% in June, the Commerce Department said on Monday, as an increase in private projects was offset by a fall in public sector building.

Construction spending, which accounts for less than 4% of U.S. gross domestic product, increased by 8.2% on a year-on-year basis in June after falling 0.2% in May, data showed.

 

·         Fed Governor Waller sees reduction in bond purchases possibly starting in October

The Federal Reserve could begin slowing down its bond purchases as early as October under a scenario central bank Governor Christopher Waller set out to CNBC in a Monday interview.

 

Should the August and September jobs report show growth in the 800,000 range, that would get the U.S. economy near its pre-pandemic level and, Waller said, meet the Fed’s benchmark for when it starts tightening policy.

 

·         Some Republican U.S. senators snipe at $1 trillion bipartisan infrastructure bill

The U.S. Senate will try to complete work this week on a $1 trillion infrastructure investment bill that would bring long-awaited improvements to roads, bridges and mass-transit systems, even as some Republicans began complaining about the details.

Following long weekend sessions, senators on Monday began voting on amendments to the 2,702-page bill.

But battles already were shaping up.

Republican Senator Pat Toomey said in a statement that the bill's proposed tax reporting regime for cryptocurrencies was overly broad and unworkable. He said he plans to offer an amendment to change it.

 

·         U.S. Treasury suspends government retirement, health fund payments as debt limit resets

U.S. Treasury Secretary Janet Yellen on Monday took additional steps to preserve the federal government's borrowing capacity under a reinstated debt limit, suspending some investments in government employee retirement and health benefits funds.

The Congressional Budget Office has estimated that the extraordinary measures could claw back more than $340 billion in borrowing capacity under the limit. CBO said these actions, combined with the Treasury's current cash balance of about $459 billion, would allow the government to avoid a payment default into October or November as a partisan fight unfolds over a new suspension or increase in the debt cap.

Yellen warned Congress in late July that a critical date could be Oct. 1, when the government faces $150 billion in mandatory payments as the 2022 fiscal year starts.

 

·         Banks eased lending standards for businesses, households in Q2, Fed survey shows

Loan officers at U.S. banks reported easing standards and terms on business loans in the second quarter as the economy revved up on the back of wider reopenings and rising coronavirus vaccination rates.

The officers also said in the Federal Reserve survey released on Monday that there was greater demand for business loans from firms of all sizes.

 

·         China quietly sets new 'buy Chinese' targets for state companies - U.S. sources

China's government quietly issued new procurement guidelines in May that require up to 100% local content on hundreds of items including X-ray machines and magnetic resonance imaging equipment, erecting fresh barriers for foreign suppliers, three U.S.-based sources told Reuters.

 

·         Iran warns of response if security threatened after ship attack -TV

Iran will respond promptly to any threat against its security, the foreign ministry said on Monday, after the United States, Israel and Britain blamed Tehran for an attack on an Israeli-managed tanker off the coast of Oman.

Tehran has denied any involvement in the suspected drone attack on Thursday in which two crew members - a Briton and a Romanian - were killed.

 

·         CORONAVIRUS UPDATES:

 

 

·         Delta variant surges across U.S. South; political leaders clamp down again

 

·         CDC rebuffs Biden bid to reinstate COVID-19 eviction moratorium

 

·         CDC says 7-day average of daily U.S. Covid cases surpassed peak seen last summer

 

·         U.S. cases and deaths from COVID-19 rise, so do vaccinations -U.S. officials

 

·         Covid, Professor Of Molecular Genetics: 'Epsilon Variant Not Yet Widespread, Delta Really Tough'

 

·         What is the newly found COVID-19 'Epsilon variant' in Pakistan? - Details inside

New Epsilon variant found in Pakistan in its fourth wave amid the surge of COVID-19 cases

Medical experts in Pakistan believe the Epsilon variant to be vaccine resistant and have declared it as the new threat for vaccinated people who might get infected again. The variant is considered highly infectious and as transmissible as the Delta variant.