MTS Help Center

Gold prices dropped more than 1% to hit a seven-week low on Tuesday, as the dollar strengthened and U.S. Treasury yields surged on expectations of sooner-than-expected hike in interest rates by the Federal Reserve.

·         Spot gold was down 0.8% at $1,736.81 per ounce by 01:43 p.m. EDT, after falling to its lowest since Aug. 11 to $1,726.19 earlier in the session.

·         U.S. gold futures settled 0.8% lower at $1,737.5 per ounce.

·         Indicative of sentiment, holdings of the SPDR Gold Trust fell 0.29 tonnes to 990.03 on Tuesday.

·         “The dot plots set by FOMC members signalling an earlier-than-previously-expected rise in Fed’s fund rates, and the move higher across the yield curve continue to have a negative impact on gold,” said Bart Melek, head of commodity strategies at TD Securities.

·         Higher interest rates increase the opportunity cost of holding non-yielding bullion.

Benchmark U.S. Treasury yields rose back above 1.5% to their highest in more than three months, with markets starting to price in higher future inflation.

·         Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields dull some of the appeal of the non-yielding commodity.

·         Meanwhile, Fed Chair Jerome Powell said on Tuesday the U.S. economy is still far from achieving maximum employment, a key component of the central bank’s requirements for raising interest rates.

·         The dollar index rose 0.3%, making gold more expensive for holders of other currencies.

·         “The USD has been further appreciating over the past few days, which is adding to the pressure on gold prices. Market participants appear to expect earlier rate hikes to be implemented by the Fed,” Commerzbank analysts said in a note.

·         Elsewhere, silver slipped 0.9% to $22.44 per ounce, palladium fell 3% to $1,905.94, while platinum dipped 0.5% to $975.93.

 

·         U.S. consumer confidence hits seven-month low as near-term economic outlook dims

U.S. consumer confidence fell to a seven-month low in September as a relentless rise in COVID-19 cases deepened concerns about the economy's near-term prospects, fitting in with expectations for a slowdown in growth in the third quarter.

The Conference Board said its consumer confidence index dropped to a reading of 109.3 this month from 115.2 in August. The third straight monthly decline pushed the index to the lowest level since February.

·         Senate Republicans again block U.S. debt limit hike, shutdown looms

·         Congress must raise debt limit by Oct. 18, Treasury Secretary Yellen warns in new letter as default looms

Treasury Secretary Janet Yellen on Tuesday told House Speaker Nancy Pelosi that Congress has just under three weeks to address the looming debt ceiling and avoid near-certain economic calamity.

 

·         U.S. Treasury's Yellen seeking October agreement on global minimum corporate tax

 

·         Fed's Powell says economy is a long way from maximum employment

Federal Reserve Chair Jerome Powell said on Tuesday the U.S. economy is still far from achieving maximum employment, a key component of the central bank's requirements for raising interest rates.

 

·         Elizabeth Warren tells Fed chair he is ‘dangerous’ and opposes renomination

The Senator said Jerome Powell’s policies have weakened US banking regulations and could lead to another financial crisis

 

·         Fed's Bostic: U.S. job market in a "jumble," but economy on firm footing

The U.S. labor market is in a "jumble" as workers sort out child care and navigate an ongoing pandemic, but the country remains on track for a full recovery, Atlanta Fed president Raphael Bostic said on Tuesday.

 

·         ECB's Lagarde, Panetta warn against tightening too soon

 

·         Biden pushes for action on infrastructure and broader agenda

U.S. President Joe Biden and his top aides on Tuesday pushed members of his own party to fund not just infrastructure but his broader agenda as talks over bills for both intensified.

 

·         EXCLUSIVE U.S. has reached out to China about cutting oil imports from Iran, officials say

The United States has reached out to China diplomatically about reducing its purchases of Iranian crude oil, U.S. and European officials said on Tuesday, as Washington seeks to persuade Tehran to resume talks about reviving the 2015 nuclear deal.

 

Purchases of Iranian oil by Chinese companies are believed to have helped keep Iran's economy afloat despite U.S. sanctions that are designed to choke off such sales to put pressure on Iran to curb its nuclear program.

·         Investors brace for rough ride as Evergrande faces payment deadline

Investors were bracing for potential market turbulence on Wednesday as a bond coupon payment for China Evergrande Group comes due, giving the embattled property developer its next test in public markets.

The company is due on Wednesday to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond. While it does not have any more onshore or offshore bonds maturing this year, it must still make coupon payments for offshore bonds totalling $547.57 million by Dec. 28.

 

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

 

·         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.

 

·         Italy sets 2021 GDP target at 6%, deficit/GDP at 9.5% - sources

 

·         ‘We lost the election. Period’: Pressure mounts on Merkel’s conservatives after worst-ever result

Pressure is mounting within the Christian Democratic Union-Christian Social Union bloc after preliminary results published Monday showed that the center-right alliance achieved 24.1% of the vote, compared with 25.7% for the center-left Social Democratic Party.

The results make a coalition government necessary, and it’s looking increasingly likely that the CDU-CSU may be heading into opposition, although its candidate for chancellor, Armin Laschet, insists that the bloc has a mandate to govern with less than a quarter of the vote.

 

·         North Korea says it test-fired new hypersonic missile

The projectile North Korea fired off its east coast on Tuesday was a newly developed hypersonic missile, state news media KCNA reported on Wednesday, the latest in a series of new weapons tested by the reclusive state.

 

·         COVID-19 UPDATES: