Gold retreated over 1% on Tuesday and is on course for its biggest intraday drop in a month, as a buoyant dollar and higher yields took the shine off the metal.
· Spot gold dropped 1.4% to $1,797.49 per ounce by 2:22 pm ET, and was set for its worst day since Aug. 9.
· U.S. gold futures settled 1.8% lower at $1,800.40 an ounce.
· The dollar jumped 0.5% against its rivals, making gold more expensive for holders of other currencies.
· “The gold market is seeing some retracement,” with the dollar likely to advance further and pressure the metals, said Daniel Pavilonis, senior market strategist at RJO Futures.
Gold scaled a 2-1/2 month peak on Friday after a surprisingly soft U.S. payrolls report boosted speculation that the U.S. Federal Reserve might push back the tapering of its bond purchases.
But “the reality is they (Fed) want to start to taper it off, so the (gold) market is going to look to position itself ahead of it actually happening,” Pavilonis added.
· The Federal Open Market Committee is scheduled to next meet on September 21-22.
· Gold is considered a hedge against inflation and currency debasement, which is caused by massive stimulus measures.
· Further denting bullion’s appeal, benchmark 10-year yields also rose to their highest since mid-July, increasing the opportunity cost of holding non-interest bearing bullion.
· “In addition, the market is also starting to get a bit nervous because of another failed attempt to break above this key area of resistance around the $1,835 level,” said Saxo Bank analyst Ole Hansen.
Investors are also looking at 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.
· Silver slid 1.6% to $24.42 per ounce, platinum fell 2.6% to $995.60. Palladium slipped 2.1% to $2,365.00.
· U.S. workers are changing jobs more often and demanding better wages -NY Fed survey
Expectations about the labor market also continued to improve, with the expected likelihood of receiving a job offer in the next four months and the wages expected for that offer both rising, according to the report.
The share of workers who became unemployed in the previous four months dropped to 0.4% in July from 10.5% in July 2020 and is now below the 0.5% seen in November of 2019 before the pandemic. The percentage who moved to a new employer rose to 5.9% in July from 4.4% a year earlier.
· Japan's Q2 GDP revised up to annualised 1.9% growth
Japan’s economy grew an annualised clip of 1.9% in the second quarter, better than the initial estimate of a 1.3% gain, revised government data showed, confirming a gradual recovery from the COVID-induced slump.
The revised figure for gross domestic product (GDP) released by the Cabinet Office on Wednesday compared with economists’ median forecast for a 1.6% annualised growth in a Reuters poll.
· IAEA says Iran is stonewalling as talks on nuclear deal hang in balance
The U.N. atomic watchdog on Tuesday criticised Iran for stonewalling an investigation into past activities and jeopardising important monitoring work, possibly complicating efforts to resume talks on the Iran nuclear deal.
· Taliban name new Afghan government, interior minister on U.S. sanctions list
· Biden says he is sure China will try to work out arrangement with Taliban
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· Biden to outline plan to curb coronavirus Delta variant as cases grow
President Joe Biden on Thursday will present a six-pronged strategy intended to fight the spread of the highly contagious coronavirus Delta variant and increase U.S. COVID-19 vaccinations, the White House said on Tuesday.
On Wednesday, Biden is scheduled to meet with White House COVID-19 advisers.
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