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With the Relative Strength Index (RSI) still lurking below the midline, the odds of a downside breakout from the pennant look higher.

Also, a powerful resistance awaits at $1754, which is the confluence of the falling trendline resistance and the downward sloping 21-Simple Moving Average (SMA), which could emerge as a tough nut to crack for gold bulls.

Acceptance above the latter is needed to rekindle a fresh upswing towards the downward-sloping 50-SMA at $1759. The next relevant upside target is seen at the September 23 highs of $1777.

On the downside, gold sellers look to challenge the rising trendline (pennant) support at $1747.

A sustained break below the latter will validate the pennant breakdown, opening floors for a retest of the six-week troughs of $1738, below which the falling trendline support at $1735 would be put to test.

 

·         Silver slipped 1.2% to $22.37 per ounce.

·         Platinum fell 0.5% to $975.65, while palladium was down 0.8% at $1,948.98.

 

·         TREASURIES-Two-year yield jumps as traders brace for rate hikes

Two-year Treasury yields surged on Tuesday to 18-month highs as investors priced in the prospect of rising cash rates and the risk of persistent inflation, forcing the U.S. government to pay more to sell its debt.

The government had to double the coupon on the new note sold on Monday to 0.25% to reflect market pricing of higher overnight rates for the next two years.

 

·         Central bank digital currencies can slash cross border payment time - BIS
 

Central bank digital currencies (CBDCs) can slash the time needed for cross border payments to seconds from days and cut costs, the Bank of International Settlements (BIS) said, citing a pilot scheme to test the digital forms of fiat currencies.

The trial showed cross border transactions could be made in a few seconds, instead of three to five days, as CBDCs help skirt complicated arrangements under which payments are passed via a network of banks, the BIS said in a report on Tuesday.

 

·         California to require garment industry to pay hourly wages to workers

California Governor Gavin Newsom signed a bill on Monday that will ensure thousands of workers in the garment industry are paid a minimum wage by the hour instead of a piece-rate compensation.

 

·         UK government considers sending army to drive fuel tanks due to ongoing supply shortages

Lines of cars formed at British gas stations for a fourth day yesterday, as the government mulled sending in the army to help ease supply disruptions triggered by a shortage of truck drivers.

·         German consumer morale brightens heading into October - GfK

The mood among German consumers brightened unexpectedly heading into October to reach its highest level in a year and a half, a survey showed on Tuesday, in a sign that households continue to support the recovery in Europe’s largest economy.

 

·         China's industrial profit growth slows for sixth month in Aug

Profits at China’s industrial firms grew at a weaker pace in August from a year earlier, slowing for a sixth consecutive month, as manufacturers struggled with high commodity prices, COVID-19 outbreaks and shortages of some key components.

 

·         China faces economic breakdown as power crisis cripples Chineseindustry

The power crisis in China has deepened. In many provinces, people are not only having to spend the night in darkness, but the scarcity has increased to such an extent that the stagnation of economic activities is likely to hit the Chinese economy hard.

 

·         China energy crunch triggers alarm, pleas for more coal

As a severe power crunch roils China's northeastern industrial heartland, senior officials face mounting pressure from alarmed citizens to ramp up coal imports thick and fast in order to keep lights on, factories open and even water supplies flowing.

With electricity shortages sparked by scant coal supply crippling large sections of industry, the governor of Jilin province, one of the hardest hit in the world's no.2 economy, called for a surge in coal imports, while a power company association said supply was being expanded "at any cost".

 

·         Goldman cuts China’s growth forecasts, citing power crunch as ‘yet another growth shock’

Goldman Sachs economists have cut their forecasts for China’s economic growth in 2021 as the world’s second-largest economy faces “yet another growth shock” in the form of constraints on energy consumption.

The Wall Street banking giant now expects China’s GDP to grow 7.8% in 2021 compared with a year ago — that’s lower than its previous forecast for an 8.2% year-on-year expansion. Goldman’s downgrade followed similar moves by Nomura and Fitch.

 

·         Nomura cuts China GDP forecast as power crunch drags down growth

Nomura’s Chief China Economist Ting Lu cut his forecast for Chinese GDP growth this year as factories shut down to comply with carbon emissions reduction targets.

“Markets now are so perplexed by the fallout of the property sector that they may ignore Beijing’s unprecedented curbs on energy consumption and energy intensity,” Lu said in a note Friday.

As a result, he expects China’s GDP to grow by 7.7% this year, down from 8.2% previously forecast.

 

·         BOJ policymakers warned of Japan's recovery delay, China risk

Some Bank of Japan policymakers warned of the risk of a delay in the country's economic recovery as state of emergency curbs to combat the coronavirus pandemic weighed on consumption, minutes of their July meeting showed on Tuesday.

While the nine-member board agreed that robust exports and capital expenditure would underpin growth, some also called for more vigilance to overseas risks such as the fallout from a possible slowdown in China's economy, the minutes showed.

 

·         Japan to end Covid-19 state of emergency this month

 

·         S.Korea's c.bank to raise ESG focus in foreign currency asset management

South Korea's central bank said on Tuesday it would raise its focus on environmental, social and governance (ESG) issues in managing its foreign currency assets and prepare guidelines to be applied to these assets going forward.

The BOK has invested a total $7.12 billion of its foreign currency assets in ESG-related stocks and bonds as of end of June, with around $1.22 billion in stocks and $5.90 billion in bonds. That compares to $5.45 billion invested by end of 2020.

The central bank will continue to increase its investment in ESG-related bonds and stocks, it added.

 

·         N.Korea fires missile, accuses U.S. of 'double standards'

North Korea fired a missile towards the sea off its east coast on Tuesday, South Korea's military said, as Pyongyang called on the United States and South Korea to scrap their "double standards" on weapons programmes to restart talks.

 

·         Hong Kong home prices revised to record high in July, edge lower in Aug

Hong Kong private home prices hit a record high in July, according to revised data, before dropping a tad in August, suggesting one of the world's most expensive property markets is showing little sign of cooling.

 

·         World Bank says Delta variant slowing economic growth in East Asia and Pacific

 

·         World Bank cuts Thai GDP growth outlook to 1% this year

Thailand’s economy is forecast to grow 1% this year, down from the 2.2% projected in July, hit by a spike in COVID-19 cases and a delayed reopening to visitors, the World Bank said on Tuesday, as the country fights its biggest virus outbreak to date.

Southeast Asia’s second-biggest economy contracted 6.1% last year, its deepest slump in more than two decades, with the crucial tourism sector devastated by the impact of the pandemic.

 

·         Thai industry group scales down tourism forecast, says 3 million jobs lost

Foreign visitors in Thailand are expected at about 280,000 this year, down from half million projected earlier, a private tourism group said on Tuesday, as the country suffers a prolonged coronavirus outbreak.

The crucial tourism sector has lost about 3 million jobs during the pandemic, the Tourism Council of Thailand said in a statement.

 

·         CDC raises Covid travel advisory level for Singapore and Hong Kong

The U.S. Centers for Disease Control and Prevention on Monday raised its travel advisories for Singapore and Hong Kong by one level each.

Singapore was raised from Level 2 to Level 3, indicating a “high” level of Covid-19 in the country. The CDC said unvaccinated travelers should avoid nonessential travel to the Southeast Asian country.

 

Reference: Reuters, CNBC, FXStreet, Independent