· Gold prices fell on Tuesday, pressured by a resilient dollar and global equities hitting a record high on rising hopes of the U.S. Federal Reserve maintaining an accommodative policy in the near term.
· Spot gold fell 0.3% to $1,817.51 per ounce by 654 GMT, while U.S. gold futures were down 0.8% at $1,819.20.
· “Many of the fundamentals are still weighing on gold prices ... People are optimistic about the global economic outlook,” said Hareesh V, the head of commodity research at Geojit Financial Services.
· “Investors are likely to reduce their safe haven assets like gold and reinvest in some risky assets.”
· A disappointing U.S. jobs data last week ignited expectations the Fed may delay tapering asset purchases and kept bullion near a 2-1/2-month high, but also drove investors to stock markets.
· Aiding the risk-on sentiment was Chinese trade data that showed both exports and imports grew much faster than expected in August.
· The dollar index inched up 0.1%, making gold less appealing to those holding other currencies.
· Investors are also keeping an eye on the European Central Bank’s meeting on Thursday, where it is likely to debate winding back stimulus measures as the euro zone economy roars back to life.
· “We’ve got the two biggest central banks probably moving towards taper, but they’re still going to be quite dovish as far as raising interest rates... I continue to think this is what’s supporting gold when it drops,” said Stephen Innes, managing partner at SPI Asset Management.
· Some investors view gold as a hedge against inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.
· Gold Price Forecast: XAU/USD to extend the bounce towards $1916/32 on a move beyond $1835 – SocGen
Gold is retreating towards $1815, having failed to find acceptance above $1830. According to strategists at Société Générale, XAU/USD needs to erode the $1835 to see further gains.
Initial support seen at the $1790/80 zone
“A move beyond $1835 can result in an extended bounce towards $1885 and June peak of $1916/1932.”
“First support is at $1790/1780, the 38.2% retracement of the bounce.”
· Silver fell 0.6% to $24.53 per ounce, platinum eased 0.3% to $1,015.55 and palladium inched down 0.1% to $2,407.91. (Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V, Devika Syamnath and Ramakrishnan M.)
· BoE's Saunders says interest rates may rise next year
The Bank of England may need to raise interest rates next year if growth continues and inflation becomes stickier, Bank of England policymaker Michael Saunders said on Tuesday.
· UK PM Johnson to hike taxes to pay for social care
Prime Minister Boris Johnson will address lawmakers on Tuesday on his plans to fix Britain's social care system though many in his own party are furious that he wants to pay for it by hiking taxes in aclear breach of his election pledges.
· UK house prices jump as market strength persists: Halifax
British house prices rose sharply last month in a further sign of strong momentum in the market even after the partial withdrawal of tax breaks on property purchases, a survey from mortgage lender Halifax showed on Tuesday.
House prices rose by 0.7% in August, the biggest month-on-month rise for three months and following a 0.4% rise in July, Halifax said.
· German factory output rebound suggests bottlenecks easing
German industrial output rose more than expected in July after three monthly drops, data showed on Tuesday, in a sign that factories are slowly overcoming supply bottlenecks which have been holding back a recovery in Europe’s biggest economy.
The Federal Statistics Office said industrial output, including construction and energy, increased by 1.0% on the month after a revised decline of -1.0% in June. A Reuters poll had pointed to a rise of 0.9%.
Output in manufacturing alone jumped by 1.3% as factories churned out more capital and consumer goods. Construction output rose 1.1% while production in the energy sector fell 3.2%.
· China's economy gets welcome boost from surprisingly strong Aug exports
Shipments from the world’s biggest exporter in August rose 25.6% year-on-year, picking up speed from a 19.3.% gain in July, customs data showed on Tuesday, pointing to some resilience in China’s industrial sector.
Analysts polled by Reuters had forecast growth of 17.1%.
· Japan's July household spending rises less than expected
Household spending rose 0.7% year-on-year in July, after a revised 4.3% fall in June, government data showed on Tuesday. That was weaker than a median market forecast for a 2.9% gain in a Reuters poll.
· Japan minister Kono may gain rival camp's support in PM race
· RBA rate decision
The Reserve Bank of Australia announced Tuesday its decision to hold steady on the cash rate target.
In a statement, the Australian central bank’s governor Philip Lowe also said the RBA will purchase bonds at a rate of 4 billion Australian dollars (about $2.98 billion) a week until at least February 2022.
· Malaysia will start treating Covid as ‘endemic’ around end-October, trade minister says
Malaysia will start treating Covid-19 as an endemic disease around the end of October, the country’s International Trade and Industry Minister Mohamed Azmin Ali said Tuesday.
Malaysia has been struggling to tame a surge in daily Covid-19 cases, which led the government to impose multiple rounds of lockdowns. The country’s central bank last month downgraded its forecast for 2021 economic growth to 3% to 4%, from 6% to 7.5% previously.
· India 'prepares for the worst' ahead of possible COVID-19 third wave
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