· Gold prices were little changed on Wednesday as investors awaited a key U.S. jobs report for clues on when the Federal Reserve might start reducing its pandemic-era stimulus measures.
· Spot gold was steady at $1,814.01 per ounce by 0343 GMT, while U.S. gold futures eased 0.1% to $1,816.00.
· The dollar index clawed 0.1% higher, but hovered closer to a more than three-week low hit on Tuesday.
· “A print above 1 million jobs will put the taper back front and center and be bearish for gold. Whereas a number around 700,000, or lower, will alleviate those concerns and be supportive of gold,” said Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA.
· Gold “lacks the momentum to trade meaningfully away from the 100 and 200-day moving average zone,” he added.
· Economists polled by Reuters see nonfarm payrolls increased by 750,000 in August.
· A strong recovery in the labor market is a crucial prerequisite for Fed’s decision on tapering.
· Last week, Fed Chair Jerome Powell acknowledged in his remarks at the Jackson Hole symposium that tapering could begin this year, but it will remain cautious in its decision to raise interest rates.
· His comments were deemed dovish and sent gold up 1.4% on Friday.
· While gold is considered a hedge against inflation and currency debasement, caused by massive stimulus measures, lower interest rates also reduce the opportunity cost of holding non-yielding bullion.
· “The lack of follow through in gold (after Jackson Hole symposium) is very telling of the fact that the market recognizes that the direction for policy is now starting to wind back stimulus,” said DailyFX currency strategist Ilya Spivak.
· Indicative of sentiment, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2% to 1,000.26 tons on Tuesday, its lowest level since April 2020.
· Gold Price Forecast: XAU/USD eyes acceptance above $1817 for further upside, US ADP, ISM in focus
Gold price enjoyed good two-way businesses on Tuesday, initially rising as high as $1819 after the US dollar index reached a fresh four-week low amid the extension of Fed Chair Jerome Powell’s led bearish momentum. However, the dollar bulls jumped back on the bids and attempted a rebound after the US CB Consumer Confidence slumped to 113.8 in August vs. 124 expected.
Gold price is trying to extend Tuesday’s rebound, holding the higher ground above $1800 ahead of the critical US ADP jobs data and ISM Manufacturing PMI. The US economic releases will be closely eyed for fresh hints on the strength of the recovery while Friday’s Nonfarm Payrolls will be the main event risk. The Fed’s guidance on tapering hinges on Friday’s employment report.
A four-hour candlestick closing above the falling trendline resistance at $1817 will confirm the upside breakout, recalling the buyers for a test of the four-week highs of $1823.
Gold bulls will then target the $1830 round number, above which the pattern target measured at $1839 will come into play.
The Relative Strength Index (RSI) remains flatlined but well above the midline, suggesting that a move higher remains in the offing.
Alternatively, the upward-sloping 21-Simple Moving Average (SMA) at $1812 is likely to offer immediate support to gold price.
If the selling pressure accelerates, then the rising trendline support at $1805 will be put at risk.
A sustained move below the latter could validate a triangle breakdown, exposing the bullish 50-SMA at $1801.
The horizontal 200-SMA at $1793 will be the level to beat for gold bears.
· Silver fell 0.2% to $23.85 per ounce, while platinum eased 0.3% to $1,009.88. Palladium rose 0.3% to $2,475.25.
· UK house prices unexpectedly pick up in August - Nationwide
British house prices rose by 2.1% month on month in August after a subdued 0.6% increase in July, despite the phasing-out of a tax break for purchases in England and Northern Ireland, figures from mortgage lender Nationwide showed on Wednesday.
House prices in August were 11.0% higher than a year ago, a bigger increase than the 10.5% rise Nationwide recorded in July and bucking economists’ expectations in a Reuters poll for a slowdown to 8.6%.
· German retail sales plunge in July, signalling weak start to Q3
German retail sales fell by far more than expected in July after two months of sharp increases, data showed on Wednesday, in a first sign that a consumer-driven recovery in Europe’s largest economy might be loosing some steam in the third quarter.
The Federal Statistics Office said retail sales dropped 5.1% on the month in real terms after a revised jump of 4.5% in June and an increase of 4.6% in May. The July reading missed a Reuters forecast for a fall of 0.9%.
· Australia's economy slowed in Q2 ahead of lockdown downturn
Figures from the Australian Bureau of Statistics out on Wednesday showed gross domestic product (GDP) rose 0.7% in the June quarter. That was a step down from 1.9% in the March quarter, but topped forecasts of 0.5% and avoided analysts’ worst fears of a negative outcome.
Annual growth was the fastest in modern history at 9.6%, but only because the pandemic caused a severe contraction in the June quarter last year, which was dropping from the calculation.
That painful pattern was playing out again as strict stay-at-home rules in Sydney, Melbourne and Canberra are set to see the economy shrink 2-3% or more this quarter.
· Asia factories hit by pandemic supply chain disruptions
Asia’s factory activity lost momentum in August as a resurgence in coronavirus cases disrupted supply chains across the region, raising concerns faltering manufacturing will add to the economic woes caused by slumping consumption.
Manufacturing activity in August expanded at a slower rate in Japan, South Korea and Taiwan as chip shortages and factory shutdowns disrupted production, in a fresh sign of the lingering impact of the pandemic, surveys showed on Wednesday.
· China's factory activity contracts for first time since April 2020
China's factory activity slipped into contraction in August for the first time in nearly 1-1/2 years as COVID-19 containment measures, supply bottlenecks and high raw material prices weighed on output in a blow to the economy.
The slowdown in the manufacturing sector underscores the fragility of the ongoing economic recovery and the impact of strict coronavirus curbs in the country, backing expectations Beijing will roll out more support measures to revitalise growth.
The Caixin/Markit Manufacturing Purchasing Managers' Index (PMI) fell to 49.2 last month, from 50.3 in July, breaching the 50-mark that separates growth from contraction.
· Deutsche Bank lowers China’s GDP forecast to 8.2% for 2021
Tuan Huynh of Deutsche Bank International Private Bank says the bank has slashed China’s economic outlook for 2021 to 8.2% from 8.7%, citing weakness in the Chinese economy that has persisted for some months.
· BOJ's deputy governor warns against premature monetary tightening
The Bank of Japan must avoid reducing stimulus even if rising raw material costs push up inflation, deputy governor Masazumi Wakatabe said, reinforcing expectations it will fall behind major counterparts in dialling back crisis-mode policies.
An advocate of aggressive monetary easing, Wakatabe also said the BOJ was unlikely to follow suit when the U.S. Federal Reserve enters a tightening cycle given Japan’s low inflation.
Unless accompanied by strong domestic demand, cost-push inflation alone will not generate a sustained pick-up in prices toward the central bank’s 2% target, Wakatabe said on Wednesday.
· Japan's Aug factory activity growth slows on resurgence of COVID-19 - PMI
Japan's factory activity expanded at a slower rate in August as a resurgence of coronavirus cases in Asia disrupted supply chains across the region, sinking overseas orders into contraction for the first time in seven months.
Manufacturers withstood the pandemic's hit in part thanks to their positive outlook for the coming twelve months, even as the highly infectious COVID-19 Delta variant is pushing countries in Asia-Pacific back into lockdown mode.
The final au Jibun Bank Japan Manufacturing Purchasing Managers' Index (PMI) in August eased to 52.7 on a seasonally adjusted basis from 53.0 in the previous month, and up slightly from a 52.4 flash reading.
· S.Korea Aug exports extend boom but Delta remains a risk
South Korea's exports accelerated in August, towed by solid demand for memory chips, petrochemicals and other major items, with the trade ministry seeing only a limited impact from the coronavirus Delta variant across the region.
Exports rose 34.9% in August from a year earlier, accelerating from 29.6% in July but falling short of 35.7% growth predicted in a Reuters survey.
Imports soared 44.0% from a year earlier, the fastest growth since May 2010 and quicker than a 38.1% rise in July. That brought the trade balance to a $1.67 billion surplus.
· Indian factory growth slipped in August, job cutting returned
Indian factory activity expanded at a slower pace last month as persistent pandemic-related weakness weighed on demand and output, forcing firms to cut jobs again following a brief recovery in July, a private survey showed on Wednesday.
The Manufacturing Purchasing Managers’ Index, compiled by IHS Markit, fell from July’s three-month high of 55.3 to 52.3 in August, but stayed above the 50-level that separates growth from contraction on a monthly basis.
· India's August power output rises 16.1%, coal-fired power by 23.7%
· Covid could trigger a spike in dementia cases, says Alzheimer’s experts
· China says first batch of BioNTech shots to arrive in Taiwan on Thursday
· Japan finds another Moderna vial suspected to contain foreign substance
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