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Gold see-saws in tight range as focus stays on U.S. labor data

Gold traded within a narrow range on Wednesday, as investors largely looked past a slew of U.S. economic readings to focus on key labour data that could influence the Federal Reserve’s tapering plans.

· Spot gold was down 0.1% at $1,812.55 per ounce by 1:50 pm EDT.

· U.S. gold futures settled down 0.1% at $1,816 an ounce.

· Bullion largely tracked moves in the dollar, which retreated after the ADP National Employment Report showed U.S. private employers hired far fewer workers than expected in August, but subsequently pared some of those losses on data showing an uptick in manufacturing.

· The greenback’s moves influence gold since it makes bullion cheaper or expensive for those holding other currencies.

· While gold did get a little boost from the dollar’s initial retreat, “the trend suggests it’s getting exhausted,” said Bob Haberkorn, senior market strategist at RJO Futures.

Also, the boost gold got from the Fed last week after Chair Jerome Powell said that although tapering could begin this year, the central bank would take a cautious approach to raising interest rates, is starting to die out, thanks to expectations for a strong number in Friday’s jobs data, Haberkorn added.

· Economists polled by Reuters predicted the U.S. non-farm jobs report for August on Friday would show payrolls increased by 750,000.

· Gold will continue to consolidate until the labour market report, said Edward Moya, senior market analyst at OANDA in a note.

· Stronger U.S. data could boost the dollar and in turn weigh on gold prices, analysts said.

· Data showed holdings of the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, slid to their lowest level since April 2020 on Tuesday.

· Meanwhile, silver rose 1% to $24.13 per ounce, having hit an over three-week high.

· Platinum eased 1.2% to $1,000.01 and palladium fell 0.8% to $2,447.44.

· Private payrolls increase by just 374,000 in August, far short of the 600,000 estimate, ADP says

U.S. companies created far fewer jobs than expected in August as the Covid resurgence coincided with cutbacks in hiring, according to a report Wednesday from payroll services firm ADP.

Private payrolls rose just 374,000 for the month, well below the Dow Jones estimate of 600,000 though above July’s 326,000, which was revised downward slightly from initial 330,000 reading.

“The delta variant of COVID-19 appears to have dented the job market recovery,” said Mark Zandi, chief economist at Moody’s Analytics, which works with ADP on the report. “Job growth remains strong, but well off the pace of recent months. Job growth remains inextricably tied to the path of the pandemic.”

· Construction spending rises in July amid abroad gains

U.S. construction spending picked up in July, lifted by gains in both private and public sector projects.

The Commerce Department said on Wednesday that construction spending increased 0.3% after being unchanged June. Construction spending rose 9.0% on a year-on-year basis in July.

· U.S. manufacturing activity rises; shortages linger

U.S. manufacturing activity unexpectedly picked up in August amid strong order growth, but a measure of factory employment dropped to a nine-month low, likely as workers remained scarce.

The ISM said its index of national factory activity inched up to 59.9 last month from a reading of 59.5 in July. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. Economists polled by Reuters had forecast the index falling to 58.6.

· U.S. consumer watchdog proposes small business lending data rules

The U.S. Consumer Financial Protection Bureau (CFPB) on Wednesday proposed new requirements for financial institutions to collect and report data on small businesses’ access to credit in a bid to boost transparency and fair lending.

· TREASURIES-Yields steady as U.S. payrolls data awaited

· Bundesbank said ECB should prepare for end of PEPP

German Bundesbank President Jens Weidmann said euro zone inflation risks overshooting ECB projections and the central bank should prepare for the end of its 1.85 trillion euro Pandemic Emergency Purchase Program (PEPP).

The ECB is scheduled to hold a policy meeting on Sept. 9.

· Ether rose as high as $3,791.28 on the day, its highest level since May 16.

· India’s economic growth will slow to around 6% for next few quarters: DBS

India’s latest GDP growth figure is largely due to low-base effect, says Radhika Rao of DBS. The economy will face longer-term scarring for the labor market and consumption.

· Shares end at new peaks, dollar slips on Delta concerns

World stock markets closed at new highs on Wednesday as investors looked beyond weak economic data that weighed on the dollar to focus on the likely continuation of massive central bank stimulus measures.

· Ida's devastation shocks as fuel shortages hinder recovery

Storm damage from Ida astounded officials on Wednesday a full three days after the powerful hurricane pounded southern Louisiana, as reconnaissance flights revealed entire communities devastated by winds and floods.

· Taliban wrestle with Afghan economy in chaos, humanitarian crisis

Afghanistan's new Taliban rulers struggled to keep the country functioning on Wednesday after the final withdrawal of U.S. forces, with foreign donors alarmed about an impending humanitarian crisis.

· U.S. relationship with Taliban unclear after end of Afghanistan War, senior defense and diplomatic officials say

Secretary of Defense Lloyd Austin said Wednesday it was not yet clear what kind of relationship, if any, the Pentagon would have with the Taliban in Afghanistan after Western forces spent 20 years fighting the Islamist militant group.

· COVID-19 UPDATES:

· WHO says it is monitoring a new Covid variant called ‘mu’

The World Health Organization is monitoring a new coronavirus variant called “mu,” which the agency says has mutations that have the potential to evade immunity provided by a previous Covid-19 infection or vaccination.

Mu — also known by scientists as B.1.621 — was added to the WHO’s list of variants “of interest” on Aug. 30, the international health organization said in its weekly Covid epidemiological report published late Tuesday.

The variant contains genetic mutations that indicate natural immunity, current vaccines or monoclonal antibody treatments may not work as well against it as they do against the original ancestral virus, the WHO said. The mu strain needs further study to confirm whether it will prove to be more contagious, more deadly or more resistant to current vaccines and treatments.

· Covid vaccines remain ‘stunningly effective,’ even as delta concerns grow

Covid-19 vaccines are still “stunningly effective” despite fears that immunity may dwindle over time, experts say.

There have been some concerns about the efficacy of Covid-19 vaccines after a number of recent studies indicated a growing number of so-called “breakthrough” Covid cases among the fully vaccinated. The studies have, however, shown that the fully vaccinated are still highly protected against severe infection, hospitalization and death caused by the virus.

Reference: CNBC, Reuters, Worldometers