MTS Help Center

Gold prices firm as softer dollar, Evergrande woes lift appeal

 

·         Gold prices bounced off 1-1/2-month lows on Friday, buoyed by safe-haven demand as investors grew wary over cash-strapped China Evergrande’s fate while a softer dollar also lifted the metal’s allure for holders of other currencies.

 

·         Spot gold was up 0.6% to $1,753.50 per ounce by 659 GMT. Prices hit their lowest level since Aug. 11 at $1,737.46 on Thursday. U.S. gold futures rose 0.3% to $1,754.40.

 

·         The dollar index lingered near a one-week low touched on Thursday.

 

·         “Asian investors could be building gold to protect against undesirable developments in the Evergrande saga over the weekend,” said Jeffrey Halley, a senior market analyst for Asia Pacific at OANDA, adding the metal was likely to trade in a $1,740-$1,780 range in the near term.

 

·         Asian stock markets were on edge, hurt by persistent uncertainty around the fate of debt-ridden China Evergrande .

 

·         Peter Fung, head of dealing at Wing Fung Precious Metals, said uncertainty around Evergrande’s debt also spurred demand for physical gold in top consumer China, near the $1,750 level.

 

·         However, bullion prices were expected to come under pressure in the medium term with major central banks signalling tapering of pandemic-era stimulus, analysts said.

 

·         The U.S. Federal Reserve signalled an earlier-than-expected rate hike this week.

 

·         “We anticipate greater outflows from ETFs and non-commercial gold futures,” UBS wrote in a note, adding it expected gold prices at $1,600 by mid-2022.

 

·         Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell to the lowest level since April 2020 on Thursday.

 

·         Silver climbed 0.9% to $22.68 per ounce and was up 1.2% for the week so far.

 

·         Palladium rose 1.1% to $2,005.68 but was on track for a third straight weekly decline.

 

·         Platinum slipped 0.7% to $982.50. The metal, however, was headed for a weekly gain of about 4%, its biggest in six weeks.

 

 

·         Dollar wallows near one-week low as haven demand ebbs

The dollar wallowed near its lowest level in a week versus major peers on Friday, as improved risk sentiment wiped out recent gains amid easing concerns about contagion from a potential China Evergrande Group (3333.HK) default.

That failed to help the greenback though, with the U.S. Dollar Index , which measures the currency against a basket of six rivals, easing slightly to 93.068 from Thursday, when it slid 0.36% and touched the lowest since Sept. 17 at 92.977. That erased gains for the week, and set the index up for a 0.16% decline.

The yen eased 0.05% to 110.385 per dollar after earlier hitting 110.435, its weakest level since Sept. 8.

The euro added 0.05% to $1.1743, continuing to rebound from a more than one-month low of $1.16835 reached Thursday.

Meanwhile, sterling was 0.07% higher at $1.3734, approaching the previous session's high of $1.3750, a first since Sept. 20.

 

·         U.S. Treasury yields edge higher as Evergrande concerns ease

U.S. government debt prices were lower on Friday morning as market concerns eased since the start of the week.

At around 1:30 am. ET, the yield on the benchmark 10-year Treasury note was higher by 30 basis points at 1.4406% and the yield on the 30-year Treasury bond was up by 32 basis points at 1.9563%. Yields move inversely to prices.

 

·         Institutional Investors Are Preferring Ethereum Over Bitcoin, Says JPMorgan

Institutional investors are more interested in Ethereum (CRYPTO: ETH) futures than Bitcoin (CRYPTO: BTC) ones, as per JPMorgan analysts.

What Happened: As per a note from the analysts, BTC futures on the Chicago Mercantile Exchange traded below the price of a spot BTC, reported Business Insider.

 

·         Fed Chair Powell Updates Progress of Digital Dollar, Says ‘I Don’t Think We Are Behind’ on CBDC – Regulation Bitcoin News

Federal Reserve Chairman Jerome Powell has shared the progress of the Fed’s work on a central financial institution digital foreign money (CBDC), the digital greenback. “We are working proactively to evaluate whether to issue a CBDC and, if so, in what form,” he mentioned, including that he doesn’t consider the U.S. has fallen behind different international locations on this space.

 

·         Pfizer booster now available to older Americans and those at higher-risk, including on the job, as CDC chief partly overrules panel

Millions of Americans vaccinated against the coronavirus have the green light to get a booster dose — a shot aimed at fortifying their defenses against a highly transmissible variant that ignited a fourth deadly wave of illness.

 

·         ECB's Lagarde says many causes of inflation spike are temporary: CNBC

Many of the drivers of a recent spike in euro zone inflation are temporary and due to fade in the next year, European Central Bank President Christine Lagarde said in an interview aired on CNBC on Friday.

Euro zone prices have been rebounding faster than expected as the economy reopened after pandemic-induced lockdowns, and several ECB policymakers think inflation will be close to, or even above, the ECB’s target of 2% next year.

Lagarde blamed much of the rise on supply disruptions and said inflation should stabilise next year.

 

·         UK consumer morale wilts under cost-of-living crisis: GfK

Growing worries over energy bills, food costs and tax hikes prompted a hefty drop in British consumer confidence this month as people became more downbeat about the economic outlook, a survey showed on Friday.

 

·         German economic recovery loses momentum in Sept - flash PMIs

Germany's economic recovery from the COVID-19 pandemic lost momentum in September as activity in both the manufacturing and services sectors slowed amid supply bottlenecks and waning catch-up effects, a survey showed on Thursday.

IHS Markit's flash Purchasing Managers' Index (PMI) showed growth in the manufacturing sector slowed to an eight-month low reading of 58.5 from 62.6 in August. The subindex for the services sector slipped to a four-month low of 56.0 from 60.8 in August.

 

·         Nomura cuts China 2021 growth forecast to 7.7% from 8.2%

Analysts at Nomura cut their forecast for China’s annual gross domestic product (GDP) growth in 2021 to 7.7% from 8.2% on Friday, citing the impact of factories pausing operations amid power outages and environmental policies.

 

·         Fears grow for China Evergrande after interest deadline missed*

China Evergrande inched closer on Friday to the potential default that investors fear, missing a payment deadline in one of the clearest indications yet that the developer whose debt struggles have spooked markets is in dire trouble.

The company owes $305 billion, has run short of cash and investors are worried a collapse could pose systemic risks to China's financial system and reverberate around the world.

 

·         Japan factory output seen down again in August on supply chain disruption: Reuters poll

Japan's factory output likely fell again in August as the country's manufacturing sector faced supply chain disruptions driven by a global chip shortage and the spread of the Delta coronavirus variant in Southeast Asia.

Retail sales also likely eased in August after a sharp rise in July, according to the poll, underscoring the fragility of domestic consumption and shattering policymakers' hopes that Japan's export-based recovery from the coronavirus pandemic would become more broad-based.

 

·         Japan approaching end of COVID-19 emergency in most areas - health minister

Japan’s COVID-19 infection situation is improving such that emergency conditions could soon be lifted in most parts of the country, the health minister said on Friday.

  

·         The Malaysian National Statistical Office (DOSM) released today's data. Malaysia's tourism revenue in 2020 fell 71.2 percent to 524 billion ringgit (approximately US$125.1 billion) due to the COVID-19 pandemic. dragging the tourism industry.

 

·         Oil edges higher on supply concerns, China releases 4.43 mln barrels

Oil prices rose on Friday for a fourth straight day due to global supply concerns following powerful storms in the United States, with China's first public sale of state crude reserves causing a momentary blip in the rise.

Brent crude was up 12 cents, or 0.2%, at $77.37 a barrel, by 0321 GMT, after touching two-month high on Thursday and closing at its highest since October 2018.

U.S. oil was up 6 cents, or 0.1%, at $73.36 a barrel, having closed 1.5% in the previous session, the highest since the start of August.

 

·         Asian stock markets wobble as China Evergrande woes sap confidence