PRECIOUS-Gold gains on sluggish dollar; U.S. jobs in focus
Gold prices rose on Friday after the dollar weakened, with investors awaiting the U.S. jobs data to gauge the Federal Reserve’s plans to start tapering asset purchases, although for the week, the metal was headed for its first decline in four.
· Spot gold rose 0.2% to $1,813.15 per ounce by 0327 GMT, and was down 0.2% on a weekly basis.
· U.S. gold futures were up 0.2% at $1,815.50.
· The dollar index fell to a one-month low, bolstering gold’s appeal to those holding other currencies. The greenback was headed for second straight weekly decline.
· “We’re seeing minor pre-positioning for people that may be wanting to take a punt into the non-farm payroll,” said Stephen Innes, managing partner at SPI Asset Management.
A weaker number “would be quite positive for gold, cause it reinforces (Fed Chair Jerome) Powell’s more cautious outlook for the U.S. economy... We could see a break below $1,800 threshold if we get a strong print,” Innes added.
· Ahead of the Labor Department’s non-farm payrolls report, due at 1230 GMT, data showed the number of Americans filing new claims for jobless benefits fell last week, while layoffs dropped to their lowest level in more than 24 years in August.
Powell had said last week if job growth continues, the central bank could start to cut its asset purchases this year, but would remain cautious in decision to raise interest rates.
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.
· Gold Price Forecast: XAU/USD points to a potential move higher, NFP awaited
Gold is hovering around $1,810, seemingly awaiting the Nonfarm Payrolls verdict. XAU/USD is at a critical juncture but in the view of FXStreet’s Dhwani Mehta, the upside appears favored.
“Investors remain cautious ahead of the critical US employment, as gold attempts a bounce amid a mixed sentiment. The US dollar is licking its wounds amid expectations of the NFP reading underscoring the market consensus of 750K in August and 943K booked in July. Gold’s fate hinges on the NFP outcome, with risks skewed to the upside while it defends the 200-Daily Moving Average (DMA).”
“Acceptance above the upward-sloping 21-Simple Moving Average (SMA) at $1813 could call for a fresh advance towards the falling trendline resistance at $1817.
“A four-hourly candlestick close above $1817 will confirm a symmetrical triangle breakout, with a test of the August highs at $1823 on the cards. Further up, the $1830 round figure will be put to test.”
“A strong cushion is seen at $1806, which is the confluence of the bullish 50-SMA and rising trendline support. If the latter gives way, then a downside breakout from the triangle will get validated, opening floors for deeper losses towards the $1793 level, where the 100 and 200-SMAs intersect.”
· SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 0.2% to 998.52 tonnes on Thursday, lowest since April 2020.
· Silver rose 0.2% to $23.92 per ounce.
· Platinum edged 0.2% higher to $1,001.36. Palladium climbed 0.3% to $2,406.65.
· China's August services activity slumps into contraction- Caixin PMI
Activity in China's services sector slumped into sharp contraction in August, a private survey showed on Friday, as restrictions to curb the COVID-19 Delta variant threatened to derail the recovery in the world's second-biggest economy.
The Caixin/Markit services Purchasing Managers' Index (PMI) fell to 46.7 in August from 54.9 in July, plunging to the lowest level since the pandemic's first wave in April 2020. The 50-point mark separates growth from contraction on a monthly basis.
· India August service activity grows at fastest pace since pandemic began
The IHS Markit Services Purchasing Managers' Index (INPMIS=ECI) rose to 56.7 in August - its strongest pace since the pandemic hit the country in March 2020 and well above the 50-level that separates growth from contraction.
· Britain's trucker shortage jams post-pandemic recovery
· Japan seen upgrading Q2 GDP on stronger business spending
Japan's economy likely grew more than initially reported in the second quarter thanks to stronger business spending, a Reuters poll showed, though a resurgence of coronavirus infections is seen weighing on growth going forward.
Separate data due next week will likely show household spending rebounded in July from a year earlier, in a sign consumer sentiment recovered somewhat before the highly infectious Delta variant spread rapidly in Japan.
Revised gross domestic product (GDP) data is expected to show Japan's economy grew an annualised 1.6% in April-June, more than a preliminary reading of 1.3% growth, the poll of 19 economists showed.
The stronger figure was in part due to an expected 2.0% rise in capital spending, a larger increase than a preliminary 1.7% gain, analysts projected. The world's third-largest economy contracted 1.0% in the first quarter.
· Fall of Japan PM Suga triggered by criticism over pandemic, failure to communicate
· Struggling Japan PM Suga steps down, setting stage for new leader
Japanese Prime Minister Yoshihide Suga said on Friday he would step down, setting the stage for a new premier after a one-year tenure marred by an unpopular COVID-19 response and rapidly dwindling public support.
Suga, who took over after Shinzo Abe resigned last September, citing ill health, has seen his support ratings sink to below 30% as the nation struggles with its worst wave of COVID-19 infections ahead of a general election this year.
Suga's decision on Friday to not run in a ruling Liberal Democratic Party (LDP) election in September means the party will choose a new leader, who will become prime minister.
· Israeli troops shoot Palestinian dead in Gaza border clashes
Israeli troops shot and killed a Palestinian along the Gaza border on Thursday as hundreds set fire to tyres and threw stones, Gaza's health ministry said.
The Israeli military said that over 1,000 Palestinians had gathered along the fortified frontier, hurling explosives and setting tyres ablaze.
- Australia announces Pfizer coronavirus vaccine swap deal with Britain
Australia will get 4 million doses of the Pfizer Inc (PFE.N) coronavirus vaccine in a swap deal with Britain, Prime Minister Scott Morrison said on Friday, days after announcing a smaller swap agreement with Singapore.
- Australian PM flags quicker reopening after COVID-19 vaccine swap with Britain
- Japan considering easing some COVID-19 emergency restrictions - media
Japan's government is considering easing restrictions on alcohol sales in restaurants and lengthening their opening hours in areas under COVID-19 state of emergency measures, local media reported on Friday.
- S.Korea extends distancing curbs ahead of thanksgiving holiday
Reference: FXStreet, CNBC, Reuters
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