Gold gains as dollar weakens; U.S. jobs data in focus
· Gold rose on Tuesday, bolstered by a sluggish dollar, with investors now looking to U.S. non-farm payrolls data which could be the key to the Federal Reserve’s stimulus-taper decision.
· Spot gold climbed 0.5% to $1,818.46 per ounce by 0636 GMT, edging closer to the 3-1/2-week high hit on Monday. Prices were up 0.2% for the month.
· U.S. gold futures rose 0.5% to $1,820.40.
· The dollar index slipped to a more than three-week low, extending declines after Fed chief Jerome Powell’s dovish remarks at the Jackson Hole symposium last week, where he gave no clear signal on the central bank’s tapering timeline. [USD/]
· “Gold will inch higher over next couple of days... But once the report finally arrives, it could be a game changer depending on how strong or weak the non-farm numbers are,” said OCBC Bank economist Howie Lee.
· However “selling pressures will start to build once the tapering process officially kicks in.”
· The U.S. non-farm payrolls report for August is due on Friday. The market is expecting an increase of 728,000 jobs, unemployment to fall to 5.2% from 5.4%, and average hourly earnings to rise 0.4% month-on-month.
· In his remarks, Powell had said that if job growth continues, the central bank could start to cut its asset purchases this year.
· “In case of disappointing jobs numbers, gold could break above recent highs and then even $1,900 is possible,” said Hareesh V, head of commodity research at Geojit Financial Services.
· Silver rose 0.5% to $24.17 per ounce but was headed for third straight month of declines, falling 5.3%.
· Platinum gained 0.5% to $1,012.01. It was on track for fourth consecutive monthly loss, sliding 3.7%.
· Palladium rose 0.1% to $2,496.28, but was headed for its worst monthly performance in seven months, down 6.4%.
· Dollar near 2-week low, investors look to U.S. jobs data for next catalyst
The dollar hovered near two-week lows against a basket of currencies on Tuesday, as investors looked to U.S. jobs figures later this week for clues on taper timing, while the Chinese yuan shrugged off soft factory and services sector surveys.
“The payroll data will be the next highlight given the focus on the Fed’s taper. A strong reading will boost expectations the Fed will give markets prior notice in September before a formal decision in November,” said Yukio Ishizuki, senior strategist at Daiwa Securities.
Weaker jobs numbers, due to be released on Friday, could instead cement a case for later action - a pre-announcement in November with a formal decision in December.
The dollar index slipped a quarter of a percent to 92.456, its lowest level since August 6.
The euro gained 0.3% against the broadly weaker dollar, hitting a three-week high of $1.18315.
Sterling strengthened to a two-week high of $1.38010, before slipping back below $1.38.
The yen was little changed at 109.85 yen to the dollar.
· U.S. Treasury says China private equity's Magnachip purchase poses security risks
The U.S. Treasury Department said the acquisition of Magnachip Semiconductor Corp by a Chinese private equity firm posed “risks to national security”, in another hurdle for Chinese companies trying to invest abroad in critical tech industries.
· French inflation stronger than expected in August at 3-year high
French inflation accelerated more than expected in August at the fastest rate in nearly three years, a preliminary estimate from the INSEE official statistics agency showed on Tuesday.
INSEE said its index of EU-harmonised consumer prices rose 0.7% from July, giving a 12-month inflation rate of 2.4%, jumping from 1.5% in July to hit the highest since October 2018.
· Japan's July factory output slips as COVID-19 hits car production
Japan's industrial output shrank in July as car production took a hit from a coronavirus resurgence in Asia that has cast doubt over the recovery in the world's third-largest economy.
A spike in highly contagious Delta variant cases has forced governments in Asia to impose fresh lockdowns and curbs, which are causing disruptions in parts supply across the region, adding to a global chip shortage.
· Japan's defence ministry seeks fresh hike in military spending
Japan's defence ministry is seeking an annual budget increase that will add to past hikes to expand military spending over a decade by almost a sixth, as it looks to counter the growing strength of neighbouring China.
The ministry's budget proposal, released on Tuesday, seeks an increase of 2.6 percent in spending, to a record 5.48 trillion yen ($49.93 billion), for the year starting April 1.
· New Zealand COVID-19 cases drop for second day amid lockdowns
New Zealand’s government on Tuesday reported that new COVID-19 cases fell for a second day, down to 49, amid the tight lockdown the country undertook during the latest outbreak this month.
· Covid-19 lockdown extended in Australian capital amid battle against 3rd wave
The coronavirus lockdown in the Australian capital has been extended for two weeks as the country continued to battle the third wave of Covid-19 infections.
· Taliban special forces take over Kabul airport after U.S. troops pullout from Afghanistan
The Badri Special Forces have been deployed at the Kabul airport. "Security and safety is ensured at the airport," Taliban spokesman Zabihullah Mujahid told reporters at the airport.
· Oil dips on hurricane impact on U.S. refining, weak China data
Oil prices slipped on Tuesday amid concerns that power outages and flooding in Louisiana after Hurricane Ida will cut crude demand from refineries at the same time global producers plan to raise output
The prices were also weighed down by weaker manufacturing data from China, where factory activity expanded at a slower pace in August compared with the previous month.
U.S. West Texas Intermediate (WTI) crude futures were down 9 cents, or 0.13%, at $69.12 a barrel as of 0640 GMT, reversing some of Monday's gains.
Brent crude futures for October, due to expire on Tuesday, fell 8 cents, or 0.11%, to $73.33 a barrel, after gaining nearly 1% on Monday. The more active November contract was down 9 cents, or 0.12%, at $72.14 per barrel.
· Chinese stocks mixed as data shows China’s factory activity growth slowed in August
In mainland China, the Shanghai composite rose 0.45% to close at 3,543.94 while the Shenzhen component shed 0.659% on the day to 14,328.38.
China’s factory activity grew at a slower pace in August as compared with the previous month, data released Tuesday showed. The official manufacturing Purchasing Managers’ Index for August came in at 50.1, against July’s reading of 50.4.
Meanwhile, the official non-manufacturing PMI for August came in at 47.5 — its lowest reading since the height of the pandemic in early 2020.
PMI readings above 50 represent expansion, while those below that level signal contraction. PMI readings are sequential and represent month-on-month expansion or contractions.
In Japan, the Nikkei 225 rose 1.08% to close at 28,089.54 while the Topix index advanced 0.54% to finish the trading day at 1,960.70. South Korea’s Kospi jumped 1.75% to close at 3,199.27.
Elsewhere, the S&P/ASX 200 in Australia edged 0.41% higher.
MSCI’s broadest index of Asia-Pacific shares outside Japan rose 1.09%.
· Tencent and NetEase shares pare losses after China tightens gaming rules for kids
Shares of China’s second-largest gaming company NetEase fell on Tuesday after regulators dramatically cut down the amount of time children were allowed to play games.
NetEase was down about 2.9% in afternoon trade in Hong Kong. Meanwhile, rival Tencent was down more than 3% earlier in the day but turned positive later in the day.
· Apple Plans to Add Satellite Features to iPhones for Emergencies
Apple Inc.’s push to bring satellite capabilities to the iPhone will be focused on emergency situations, allowing users to send texts to first responders and report crashes in areas without cellular coverage.
· European markets nudge into positive territory on last trading day of August
The pan-European Stoxx 600 index opened 0.1% higher, with most sectors in positive territory apart from banks, insurance, utilities, travel and leisure and oil and gas.
The tentative open for European markets comes after data released on Monday showed euro zone economic sentiment eased more than expected in August, from a record high in July.
Reference: CNBC, Reuters, Finance.yahoo, Xinhua
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