· Gold prices held near two-week lows on Thursday, pressured by a stronger U.S. dollar, while investors awaited a policy decision by the European Central Bank (ECB) due later in the day.
· Spot gold was unchanged at $1,789.39 per ounce by 0054 GMT, after touching its lowest level since Aug. 26 at $1,781.30 in the previous session.
· U.S. gold futures eased 0.1% to $1,790.80.
· The dollar was buoyed by cautious risk sentiment, denting the bullion’s appeal for those holding other currencies.
· ECB’s policy decision is due at 1145 GMT and it is expected to take a token step towards unwinding the pandemic-era emergency economic aid while still signaling copious support for years to come.
· Meanwhile, several Federal Reserve policymakers on Wednesday signaled that the U.S. central bank remains on track to trim its massive asset purchases this year, despite the slowdown in jobs growth seen in August and the impact a resurgence in Covid-19 cases.
· Non-yielding gold tends to gain in a low interest-rate environment, while some investors also view the metal as a hedge against higher inflation that could follow stimulus measures.
· The U.S. economy “downshifted slightly” in August as the renewed surge of the coronavirus hit dining, travel and tourism, the Fed reported Wednesday.
· The World Platinum Investment Council (WPIC) said on Thursday it now expects the global platinum market to be in surplus this year as mine supply ramps up and investment demand falls.
· Gold Price Forecast: XAU/USD sets the stage for further losses towards $1,750
Gold price is nursing losses near two-week lows of $1782. The $1,775 area holds the key for XAU/USD bulls, as FXStreet’s Haresh Menghani notes.
“Weakness towards the next relevant support, around the $1,775-74 region, remains a distinct possibility. A convincing break below will set the stage for a deeper retracement towards the $1,750 support zone.”
“Bulls might now wait for a sustained strength back above the $1,800 round-figure mark before placing fresh bets. XAU/USD might then climb back to the $1,821-22 resistance zone, above which a fresh bout of a short-covering move should pave the way for a move back towards challenging the $1,832-34 hurdle. Some follow-through buying will negate any near-term negative bias.”
Gold prices stay depressed around a two-week low after breaking 200-SMA and an ascending trend line from August 16.
It should be noted that the gold bears may find it tough to conquer the stated horizontal support, which if broken will make the metal vulnerable to visit August 10 lows near $1,717 and then the $1,700 threshold.
Meanwhile, the support-turned-resistance line near $1,792, followed by the 200-SMA around $1,795 and the $1,800 round-figure, could challenge the commodity’s recovery moves.
Even if the gold buyers manage to regain the $1,800 mark, a horizontal area surrounding $1,854 becomes the key hurdle to the north.
· Platinum dropped 0.4% to $975.78 per ounce while silver fell 0.1% to $23.94.
· Palladium eased 0.2% to $2,245.89. Prices fell to their lowest level since Feb. 2 at $2,213.95 on Wednesday.
· Dollar little changed, euro steady ahead of ECB decision
The dollar was supported on Thursday as doubts over the global economy’s strength subdued risk sentiment, while the euro steadied ahead of a European Central Bank policy meeting later in the day that is expected result in a reduction in stimulus.
The dollar index remained flat at 92.664, after three consecutive days of rises.
The euro steadied to around $1.1819, following a three-day retreat from Friday’s two-month high of $1.1909.
The European Central Bank is expected to reduce stimulus on Thursday, taking a token step towards unwinding the emergency economic aid it put in place during the pandemic.
Analysts polled by Reuters see ECB bond buying under its pandemic emergency purchase programme (PEPP) falling to possibly as low as 60 billion euros a month from the current 80 billion, before a further fall early next year and the scheme’s end in March.
But at the same time, the ECB is expected to signal copious support for years to come, even after PEPP expires.
· China's yuan inches higher, but policy divergence seen weighing
China's yuan edged higher against the U.S. dollar on Thursday, lifted by a stronger official fixing, but traders expect gains will be limited as central banks elsewhere in the world start to scale back pandemic emergency stimulus programmes.
The People's Bank of China set the yuan's daily midpoint
rate at 6.4615 per dollar prior to the market open,
firmer than Wednesday's fix of 6.4674.
Spot yuan opened at 6.4630 per dollar and strengthened to 6.4606 around midday. The offshore yuan was barely changed at 6.4588.
· UK lawmakers back tax hike to pay for health, long-term care
British Prime Minister Boris Johnson has won a vote in Parliament for a big tax hike designed to pay for short-term health requirements arising from the coronavirus pandemic, as well as for long-term care needed by Britain’s growing older population
· Profit at bid target Morrisons falls 37% on COVID hit
British supermarket group Morrisons, at the centre of a bid battle between two U.S. private equity firms, on Thursday reported a 37.1% fall in first-half profit, hurt by COVID-19 costs and lost profit in cafés, fuel and food-to-go.
· China's Aug new yuan loans seen rebounding from 9-month low
China's new yuan loans are expected to rebound in August from the nine-month low seen in the previous month, a Reuters poll showed, as the central bank seeks to support the country's economic recovery.
Banks are estimated to have issued 1.30 trillion yuan ($201.21 billion) in net new yuan loans last month, up from 1.08 trillion yuan in July, according to the median estimate in the survey of 31 economists.
That would be higher than 1.28 trillion yuan issued the same month a year earlier.
Expectations for near-term easing cooled after comments by central bank officials that China would maintain prudent monetary policy.
· Taliban to allow 200 Americans, other civilians to leave Afghanistan -U.S. official
· N.Korea puts hazmat suits on parade for national day, but no missiles
· Sydney pubs to open in mid-Oct as end of COVID lockdown looms - with cases set to rise
· Japan to extend COVID-19 emergency curbs in Tokyo, other areas
Japan has been struggling with a fifth wave of the virus and last month extended its long-running curbs until Sept. 12 to cover about 80% of its population.
· Japan vaccine minister Kono to declare LDP leadership run on Fri -Kyodo
· Indonesia agree to Australia further defence and security ties
Reference: CNBC, Reuters, Independent, FXStreet, FXLeader
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