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Gold prices held slightly above the key $1,750 mark on Thursday as expectations of an early taper of the Federal Reserve’s asset purchases eased, offsetting a firmer dollar and yields.

·         Spot gold was steady at $1,750.91 per ounce by 1:46 p.m. EDT.

·         U.S. gold futures settled 0.1% down at $1,751.80.

 

·         Gold rose 1.3% on Wednesday after data showed U.S. consumer price increases in July were in line with economists’ estimates and down from June.

 

·         “If prices can continue to trade sideways in the near-term, that would suggest that the recent spike lower is probably a near-term bottom,” Jim Wyckoff, senior analyst at Kitco Metals, said.

 

·         The U.S. Labor Department also reported that initial jobless claims dropped in the latest week and U.S. producer prices jumped by a record 7.8% in the 12 months through July.

 

·         Investors were also focused on U.S. President Joe Biden’s spending plans. The U.S. Senate on Wednesday approved a $3.5 trillion budget plan that followed the chamber’s passage on Tuesday of a $1 trillion infrastructure bill.

 

·         “Fiscal policies should work in tandem with monetary tapering to support gold because both suggest inflationary pressures ahead,” Wyckoff said.

 

·         Gold Heads for Second Weekly Loss as Traders Assess Dollar, Fed

 

·         Elsewhere, silver fell 1.6% to $23.14 per ounce.

 

·         “Silver’s investment demand is projected to rise in the second half of 2021, along with an expected increase in industrial demand, led by growing solar panel capacity which is likely to exceed 150 Gigawatts globally in 2021,” Michael DiRienzo, executive director of Silver Institute, said.

·         Platinum was up 0.2% at $1,019.30.

·         Palladium dropped 0.2% to $2,631.69.

 

·         TREASURIES-Yields steady after 'normal' 30-year bond auction

The benchmark 10-year yield rose as high as 1.379% after the auction and was last at 1.3607%.

 

·         Dollar rises after U.S. producer prices surge

The U.S. dollar advanced against a basket of currencies on Thursday, after data showed producer prices posted their largest annual increase in more than a decade in the 12 months through July, suggesting inflation pressures remain strong.

The dollar index , which measures the greenback against a basket of six rivals, was 0.1% higher at 93.019.

 

·         Bitcoin slipped 2.6% to $44,348.59, a day after touching a near 3-month high.

 

·         S&P 500 and Dow clinch new records as stocks end day higher

U.S. stocks edged higher on Thursday, pushing both the Dow Jones Industrial Avera

ge and S&P 500 to fresh records during an otherwise tame session.

The Dow rose 14.88 points to 35,499.85, a record close for the blue-chip index. The S&P 500 climbed 0.3% to 4,460.83, also a record. The Nasdaq Composite outperformed with a gain of 0.3% to end the day at 14,816.26.

 

 

·         Federal Reserve could start to limit stimulus as soon as this year, says Daly

Top central bank official points to strong recovery in US economic activity and consumer spending

The Federal Reserve could start “dialling back” its pandemic levels of monetary support for the US economy by the end of the year given the strength of the economic rebound, according to a top official at the US central bank.

In an interview with the Financial Times, Mary Daly, president of the San Francisco Fed, expressed confidence that the robust recovery in household and business activity would continue to gather momentum as more people returned to work and consumer spending remained buoyant, setting the stage for a policy pivot in the coming months.

 

·         EXCLUSIVE Fed's Barkin: U.S. "closing in" on taper, but could still take a few months

It may take a few months more for the U.S. job market to recover enough that the Federal Reserve can reduce its crisis-era support for the economy, according to Richmond Federal Reserve Bank President Thomas Barkin, who added a centrist voice to the open debate about when to trim the central bank's $120 billion in monthly bond purchases.

 

·         Fed’s George backs ending bond-buying

Kansas City Fed President Esther George said the standard for reducing the bond-buying program may have already been met by the current spike in inflation, recent labor market improvements and the expectation for continued strong demand. "I support bringing asset purchases to an end under these conditions," George said during a virtual seminar organized by the National Association for Business Economics.

 

·         Fed's Kaplan says central bank should start tapering in October

Dallas Fed President Robert Kaplan, in an interview with CNBC, said the U.S. central bank should announce its timeline for beginning to reduce its massive bond purchases next month and start tapering them in October.

 

·         Fed framework gives rise to mash-up of views, averaging strategies

The Federal Reserve's new approach to monetary policy, meant to provide a clear path for the central bank to reach its inflation target, has led for now to a conflicting array of interpretations as officials turn perhaps sooner than anticipated to a debate about when to raise interest rates.

It is almost foregone that in coming months the central bank will begin reducing its pandemic emergency support by trimming its $120 billion in monthly bond purchases. What's less certain by far is the timing and pace of any subsequent interest rate increase, a more consequential step that will hinge on which view of inflation wins out.

 

·         Yellen warns Congress again on U.S. debt limit as Republicans balk

U.S. Treasury Secretary Janet Yellen on Monday again urged Congress to raise the national debt limit through bipartisan action, as more Republicans balked at the prospect of raising the federal government's borrowing capability.

Yellen, in another notice to U.S. lawmakers, warned of economic harm if the debt ceiling is not raised or suspended before the nation's borrowing capability is exhausted in October.

Failure to increase or suspend the statutory debt limit - now at $28.5 trillion - could trigger another federal government shutdown or a debt default.

 

·         Canada PM Trudeau planning snap election, seeks approval for COVID response - sources

 

·         Taliban advance on major Afghan cities as U.S., UK troops to aid evacuations

U.S. deploying 3,000 troops to help evacuate Afghan embassy staff as Taliban advances

 

·         Oil prices end slightly lower, but within well-worn range

Crude oil futures ended slightly lower Aug. 12, but remained within a well-worn range as traders continued to assess the demand concerns stemming from the rapid spread of the coronavirus delta variant.

NYMEX WTI front-month crude settled 16 cents lower at $69.09/b, while ICE front-month Brent settled at $71.31/b, down 13 cents.

 

·         The International Energy Agency Aug. 12 lowered its estimate of 2021 demand growth to 5.3 million b/d from 5.4 million b/d, and cut its second-half 2021 demand estimate by 600,000 b/d to 98.15 million b/d.

The IEA pointed to a 120,000 b/d drop in July demand because of the coronavirus resurgence in China, Indonesia and elsewhere in Asia.

 

·         OPEC said Aug. 12 it was keeping its global demand forecasts for 2021 and 2022 unchanged, and that oil demand should remain higher than supply over the coming months.

 

 

·         COVID-19 UPDATES:

 

·         U.S. works with vaccine makers on booster dose for some -CDC director

The U.S. Food and Drug Administration is working with vaccine makers Pfizer Inc (PFE.N) and Moderna Inc (MRNA.O) to allow certain vulnerable people to receive a third booster shot of their COVID-19 vaccines to improve their immune response, the director of the U.S. Centers for Disease Control and Prevention said on Thursday.