Gold eases, hovers above $1,800 on virus fears, easing taper concerns
· Gold prices eased on Tuesday but hovered above the key psychological level of $1,800, as the rising threat from increasing Delta coronavirus variant cases fanned expectations that the U.S. Federal Reserve might delay easing its accommodative stance.
· Spot gold eased 0.1% to $1,803.53 per ounce by 0650 GMT, after jumping about 1.4% on Monday.
· U.S. gold futures were flat at $1,806.30.
· The dollar index was steady after falling about 0.6% on Monday.
· The fact that gold again breached $1,800 level says that the market is still quite concerned about the Delta variant, OCBC Bank economist Howie Lee said.
· IHS Markit data showed U.S. business activity growth slowed for a third straight month in August, with the fast spreading Delta variant weakening the momentum of the rebound.
· Investors are now focused on Fed Chair Jerome Powell’s speech at the annual Jackson Hole, Wyoming, symposium as they await guidance on the central bank’s taper plans.
· Jackson Hole is likely to be a non-event, anything else would be a bonus, Lee said, adding that “if the bonus is on the dovish side then we will see gold prices pick up probably back to the $1,850 level.”
· Easing worries of an imminent tapering buoyed Asian shares on Tuesday.
· “The $1,850 level is everything for gold and if after the Jackson Hole Symposium, prices can’t make a fresh August high, bullion investors might be quick to the sidelines,” Edward Moya, senior market analyst at OANDA, said in a note.
· Holdings of SPDR Gold Trust, fell 0.5% to 1,006.66 tonnes on Monday, their lowest since April 2020.
· Gold Price Forecast: XAU/USD steps back from wall of resistance around $1,800
Gold (XAU/USD) drops 0.17% intraday to $1,802 amid a quiet session ahead of the European markets’ open on Tuesday. The yellow metal jumped the most since August 13 the previous day but lacks the fundamentals to cross the sturdy barrier to the north. That said, the mixed news and a light calendar in Asia add to the gold’s slower grind to the south.
Given the light calendar ahead of the speeches from the Jackson Hole Symposium, gold prices may rely on second-tier factors like US data and geopolitics for fresh impulse. However, covid updates and vaccine news gain a little more importance.
However, sustained trading beyond the horizontal area comprising the late June lows, around $1,752-55, coupled with the bullish MACD signals, keep gold buyers hopeful.
In addition to the stated resistance line, 100 and 200-DMAs around $1,810-12 also challenge the gold bulls, a break of which will underpin the rally to the mid-July highs close to $1,835.
Meanwhile, the $1,800 threshold and the latest swing lows around $1,775 can entertain gold sellers during further weakness, ahead of $1,755-52 support.
Though, a clear downside break of $1,752, also breaking the $1,750 round figure, will aim for the monthly low of around $1,688. During the fall, the $1,800 round figure may offer an intermediate halt.
Overall, gold prices remain on the way to recovery but await a strong fundamental to cross the key hurdles.
· Silver fell 0.3% to $23.59 per ounce, while platinum rose 0.2% to $1,015.41.
· Palladium gained 0.4% to $2,410.42. Prices climbed 5.5% in the previous session, the biggest one-day gain since May 2020.
· The EU is reportedly considering support for production of rare earth magnets used in EVs
· U.S. and German relations at a crossroads as Afghanistan crisis unfolds
After four years of tension under former President Donald Trump, the relationship between the United States and Germany was already at a crossroads. Now, experts say the ongoing crisis in Afghanistan could add fuel to the fire.
· German consumers, state spending drive stronger-than-expected recovery in Q2
Private consumption and state spending drove a stronger-than-expected economic recovery in Germany in the second quarter following an easing of COVID-19 curbs, the Federal Statistics Office said on Tuesday, in a revision to an earlier estimate.
Gross domestic product grew by 1.6% on the quarter from April to June adjusted for price, seasonal and calendar effects, the office said, slightly up from its previous estimate of 1.5% GDP growth.
· Kamala Harris says Asia won’t have to choose between the U.S. and China
· S.Korea set to curb Google, Apple commission dominance
South Korea is likely to bar Alphabet Inc's (GOOGL.O) Google and Apple Inc (AAPL.O) from charging software developers commissions on in-app purchases, the first such curbs by a major economy that could hurt the tech giants' lucrative revenue streams.
· South Korea seen raising rates as financial risks grow - Reuters poll
South Korea is expected to raise interest rates on Thursday, making it the first major central bank in Asia to do so in the pandemic era as surging household debt and home prices threaten financial stability.
· RBNZ considered a 50 bps rate hike - assistant governor
The Reserve Bank of New Zealand kept interest rates steady last week mostly because it would have been hard to communicate the case for a hike on the same day the country was locked down, Assistant Governor Christian Hawkesby said on Tuesday.
Hawkesby, speaking in an interview with Bloomberg, also said policymakers considered a 50 basis point hike. “A 50 basis point move was definitely on the table in terms of the options that we actively considered,” he said.
· New Zealand reports highest jump in Covid-19 cases since April 2020
Authorities reported 41 new Covid-19 cases on Tuesday, taking the total number of infections in the country to 148, the Director General of Health Chief Ashley Bloomfield said at a news conference. That is the most new cases since April 2020, according to a graphic on the Ministry of Health website.
· Australia pandemic panel backs reopening targets despite Sydney outbreak
Australia can proceed with its reopening plans when the country reaches 70%-80% vaccination levels, the government's pandemic modelling adviser said, even as some states hinted they may not ease border curbs if Sydney fails to control its Delta outbreak.
· Israel's COVID-19 vaccine boosters show signs of taming Delta
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