Gold firmed on Thursday, lifted by a slight retreat in the dollar, but renewed bets that the U.S. Federal Reserve may start early tapering of economic support capped gains, with the European Central Bank also slowing its bond buying.
· Spot gold rose 0.5% to $1,797.41 per ounce by 1:34 p.m. ET.
· U.S. gold futures settled up 0.4%, at $1,800 per ounce.
· Making gold cheaper for holders of other currencies, the dollar edged down, while the euro extended modest gains after the ECB said it would slow the pace of bond buying under its emergency scheme.
· U.S. weekly jobless claims data came in at near 18-month lows, “which cements the belief that a December (Fed) taper announcement was possible. ... So, gold prices are going to consolidate around these levels,” said Ed Moya, senior market analyst at foreign exchange brokerage OANDA.
· The increased likelihood that the ECB may start reducing stimulus at some point next year drove gold’s initial decline back below $1,800 per ounce, Moya added.
· Initial claims for state unemployment benefits in the U.S. dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept. 4, the lowest level since mid-March 2020.
· Gold tends to gain when interest rates are low, while some investors also view bullion as a hedge against higher inflation that could follow stimulus measures.
· StoneX analyst Rhona O’Connell said that “overall uncertainty is keeping gold supported, while the longer-term element underpinning prices is the prevalence of negative real rates.”
“The Delta (coronavirus) variant is obviously still muddying the waters,” O’Connell added.
· SPDR GOLD HOLDING:
· Elsewhere, silver rose 0.6% to $24.09 per ounce.
· Platinum dipped 0.1% to $978.93 per ounce, having earlier touched a near three-week low.
· Palladium dropped 3.2% to $2,180.27 per ounce, after falling as much as 4.8% to $2,143.69, its lowest in more than a year.
· U.S. labor market recovery on track as weekly jobless claims near 18-month low
The number of Americans filing new claims for jobless benefits fell to the lowest level in nearly 18 months last week, offering more evidence that job growth was being hindered by labor shortages rather than cooling demand for workers.
Initial claims for state unemployment benefits dropped 35,000 to a seasonally adjusted 310,000 for the week ended Sept. 4, the lowest level since mid-March 2020. Economists polled by Reuters had forecast 335,000 applications for the latest week.
· Fed's Bowman encouraged still by recovery, taper likely this year
U.S. Federal Reserve bank Gov. Michelle Bowman added her voice Wednesday to the growing number of policymakers who say the weak August jobs report will not throw off the central bank’s developing plan to trim its $120 billion in monthly bond purchases later this year.
Bowman becomes the fifth Fed official in the past two days to signal that the disappointing August jobs report on its own would not stop the Fed from beginning to pare its bond purchases later this year.
· Fed officials to sell stocks to avoid apparent conflict of interest
· Fed presidents Kaplan, Rosengren to sell individual stock holdings to address ethics concerns
Federal Reserve regional presidents Robert Kaplan and Eric Rosengren said Thursday they will sell individual stock holdings amid ethics concerns regarding trading in 2020.
The Fed officials will sell all their stocks by Sept. 30 and put the proceeds in passive investments, they said in statements released Thursday.
· U.S. applications to start a business fall in August
Applications to start new U.S. businesses declined in August for just the third time this year and the first time since June as the recent surge in coronavirus cases put entrepreneurs on hold.
The Commerce Department said on Thursday that business applications fell 4.7% to a seasonally adjusted 427,842 last month. The data is derived from business applications for tax identification numbers.
· ECB leaves interest rates at current record lows, decides to buy bonds at moderately lower pace
The European Central Bank kept its monetary policy unchanged on Thursday but opted to slow down the pace of net asset purchases under its pandemic emergency purchase program.
The ECB also decided to buy bonds at a moderately lower pace in the next three months.
With the latest decision, this now means that it will be buying less than 80 billion euros, or about 95 billion U.S. dollars, of bonds per month, the initial amount it had been purchasing.
· ECB may have been ‘too pessimistic’ to begin with, Lagarde says
European Central Bank President Christine Lagarde provides the bank’s outlook for the euro zone economy.
· Euro zone’s rebound phase is increasingly advanced, ECB’s Lagarde says
European Central Bank President Christine Lagarde gives a press conference following the bank’s latest monetary policy decision.
· El Salvador’s new bitcoin wallets could cost Western Union $400 million a year
In 2020, El Salvador received nearly $6 billion in remittances, which accounted for about 23% of its gross domestic product.
President Nayib Bukele estimates that money services providers like Western Union and MoneyGram will lose $400 million a year in commissions for remittances, thanks to the country’s bitcoin adoption.
Some 70% of the Salvadoran population receives remittance payments.
· Ukraine is the latest country to legalize bitcoin as the cryptocurrency slowly goes global
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· Moderna working on combination COVID-19 vaccine booster and flu shot
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