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Gold slumped to a more than four-month low on Monday, as strong U.S. jobs data bolstered expectations for an early tapering of the Federal Reserve’s economic support measures.

 

·         Spot gold shed 2.1% to $1,725.96 per ounce by 1:40 p.m. EDT (1740 GMT).

·         U.S. gold futures settled 2.1% down at $1,726.50.

 

·         SPDR GOLD HOLDINGS:

 

·         Silver was caught in gold’s slipstream and hit its lowest in more than eight months, at $22.50 per ounce. It was last down 4% to $23.35.

·         “The sell-off in gold and silver was a prototypical shake out spurred by Friday’s strong jobs report as the market then had to price in the Fed being one step closer to reducing asset purchases and potentially raising interest rates sooner previously anticipated,” said David Meger, director of metals trading at High Ridge Futures.

High Ridge’s Meger also noted economic data would continue to play a pivotal role in the gold market’s expectations of stimulus tapering.

“While the job numbers were strong, if in subsequent reports we don’t see quite the same exceptional growth or jobs increase, and some type of more transitory effect in inflation, it will confirm the fact that this was clearly an overdone move in gold,” Meger said.

 

·         Bullion slipped over 2% after data on Friday showed U.S. employers hired the most workers in nearly a year in July.

 

·         An interest rate hike would dull non-yielding bullion’s appeal versus interest-earning assets.

 

·         Adding to gold’s struggles, was the dollar index rallying to a two-week high.

 

·         Bullion slid as much as 4.4% and briefly dropped below $1,700 in early Asian trade, but recovered from those lows.

 

·         “Strengthening economies, especially in Asia are going to auger for better consumer and commercial demand for gold and silver,” potentially stemming their losses, said Jim Wyckoff, senior analyst with Kitco Metals.

 

·         Platinum fell 0.4%, to $976.13, having earlier hit its lowest since November.

·         Palladium dropped 0.9% to $2,602.66.

 

·         U.S. job openings surge to new record high, hiring increases

U.S. job openings jumped to a fresh record high in June and hiring also increased, an indication that the supply constraints that have held back the labor market remain elevated even as the pace of the economic recovery gathers momentum.

Job openings, a measure of labor demand, shot up by 590,000 to 10.1 million on the last day of June, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, on Monday.

 

·         Fed officials say tapering is near, advancing discussion on rate hike

Two Federal Reserve officials said on Monday that the U.S. economy is growing rapidly and that while the labor market still has room for improvement, inflation is already at a level that could satisfy one leg of a key test for the beginning of interest rate hikes.

 

Atlanta Federal Reserve Bank President Raphael Bostic said he is eyeing the fourth quarter for the start of a bond-purchase taper but is open to an even earlier start if the job market keeps up its recent torrid pace of improvement. Moreover, he and Richmond Fed President Tom Barkin both said they believe inflation has already achieved the Fed's 2% threshold, according to their separate assessments. That is one of two requirements to be met before rate hikes can be considered.

Their remarks are a sign that as Fed officials hold discussions about how and when to taper their asset purchases, they are also getting more detailed in their debate about what it will take to satisfy the Fed's inflation target under the new framework.

Bostic, who has already penciled in late 2022 for the start of rate hikes, pointed to the five-year annual average for the core personal consumption expenditures index, or core PCE inflation, which by his calculation reached 2% in May.

 

Fed's Barkin: Inflation likely to remain at Fed's 2% target

High inflation this year may have satisfied one of the Fed’s benchmarks for raising interest rates, though there is still room for the job market to heal before rates should rise, Richmond Federal Reserve President Tom Barkin said Monday.

Under the Fed’s current policy guidance, rates will rise “when inflation hits 2%, which I think you can argue it already has, and it looks like it is going to sustain there,” Barkin said at the Roanoke Regional Chamber of Commerce in Virginia. But “there is still room to run in the labor market.”

 

·         Goldman downgrades China growth, citing delta variant’s spread

 

Goldman Sachs has cut its 2021 China growth forecast, citing the fast spread of the highly contagious delta variant of the coronavirus that causes COVID-19, though the bank expects a rebound later in the year.

Goldman slashed its third-quarter real gross domestic product forecast to 2.3% from 5.8%, but lifted its fourth-quarter growth forecast to 8.5% from 5.8%, leaving the full-year 2021 projection at 8.3% from a previous 8.6%.

 

·         AMC says it will accept bitcoin as payment for movie tickets by year-end

 

·         Bitcoin, cryptos post 5th straight week of outflows -CoinShares data

Outflows from the world’s most popular cryptocurrency totaled $33 million in the week ended Aug. 6, compared with $19.7 million the previous week. But so far this year, bitcoin inflows remained a robust $4.2 billion.

Total crypto outflows, meanwhile, added up to nearly $26 million, although CoinShares noted that the magnitude of outflows was much less than in May and June.

Sluggishness in the crypto market was due in part to global regulatory crackdown, analysts say.

 

·         Taliban seizes several Afghan provincial capitals as U.S. nears withdrawal

 

·         U.S. says it is up to Afghans to defend country as Taliban take more territory

The United States said it was up to Afghan security forces to defend the country after Taliban militants captured a sixth provincial capital on Monday, along with border towns and trade routes.

President Joe Biden has said the U.S. military mission in Afghanistan will end on Aug. 31, arguing that the Afghan people must decide their own future and that he would not consign another generation of Americans to the 20-year war.

 

 

·         COVID-19 UPDATES:

 

·         Delta variant pushes U.S. cases, hospitalizations to 6-month high

 

·         Pentagon to seek approval to make COVID-19 vaccines mandatory

The Pentagon on Monday said that it will seek U.S. President Joe Biden's approval by mid-September to require 1.3 million military members to get vaccinated against COVID-19, anticipating full regulatory clearance for a vaccine by then.

 

·         Dr. Scott Gottlieb says the Covid delta surge may be the ‘final wave’ in U.S.

 

·         Australia's Victoria reports slight rise in local COVID-19 cases

 

·         Coronavirus: CDC urges Americans to avoid travel to France, Israel and Thailand - as it happened