· Gold prices were set on Thursday for a second quarterly drop in three quarters as the prospect of the U.S. Federal Reserve tapering its pandemic-era stimulus strengthened the greenback, making bullion more expensive for holders of other currencies.
· Spot gold edged up 0.2% to $1,729.56 per ounce by 0625 GMT, partially recovering from the Aug. 9 low of $1,720.49 touched in the previous session. U.S. gold futures were up 0.4% to $1,729.20.
· “Gold is lacking direction in the short-term as money whipsaws between different asset classes with the dollar being the ultimate hedge against most risk as opposed to gold,” Michael Langford, director at corporate advisory AirGuide said.
· “While there are ample risks that could help gold break higher, like weaker economic data or the Evergrande debt crisis potentially spilling over into other economies, these are unlikely to provide lasting support,” DailyFX currency strategist Ilya Spivak said.
· “We’re also seeing gold and stocks fall together recently, underscoring that gold is not acting as a haven against losses in riskier assets because what’s really driving both these assets down are rising bond yields and not a risk-off move.”
· Gold retests 50 SMA at $1,732 – All eyes on final US GDP
Gold (XAU/USD) has staged a modest recovery from fresh seven-week lows. Defending $1720 is critical for XAU/USD bulls, as focus shifts to US data, FXStreet’s Dhwani Mehta informs.
“Upbeat Chinese Caixin Manufacturing PMI, an aversion to the US government shutdown and a rebound in metals and energy prices seem to have revived the risk-on trades. However, the further upside in gold price remains elusive, as the Fed’s hawkish expectations will continue leading the sentiment, underpinning the yields and the dollar while weighing negatively on the non-interest-bearing gold.”
“Only a four-hourly candlestick closing above the 21-SMA at $1742 hurdle will create conditions for any meaningful recovery. Up next, gold buyers will look to regain the 50-SMA at $1753, opening doors for a fresh rally towards the 100-SMA at $1770.”
“If the sellers fight back control, then a retest of the seven-week troughs at $1722 would be inevitable. Gold bears will need to find a strong foothold below $1720, in order to flex their muscles towards the August 10 low of $1718. The line in the sand for gold optimists is the $1700 psychological threshold.”
“To conclude, any recovery in gold could likely remain short-lived, as sellers would seek fresh entries at higher levels.”
· Gold Price Forecast: XAU/USD to drop to the August low of $1692 on a break below $1722 – Commerzbank
· Gold Price Forecast: XAU/USD keeps downside opened towards $1717 – Confluence Detector
Britain’s economy grew more strongly than previously thought in the April-June period, official data showed on Thursday.
Gross domestic product increased by 5.5% in the second quarter, the Office for National Statistics said, compared with its preliminary estimate of growth of 4.8%.
· French inflation hit near 10-year high of 2.7% in September
· China's Golden Week travel not expected to return to pre-COVID levels this year
· China manufacturing unexpectedly shrinks, services offer support
China’s factory activity unexpectedly shrank in September due to wider curbs on electricity use and elevated input prices, while services returned to expansion as COVID-19 outbreaks receded, offering some relief to the world’s second-biggest economy.
The official manufacturing Purchasing Manager’s Index (PMI) was at 49.6 in September versus 50.1 in August, data from the National Bureau of Statistics (NBS) showed on Thursday, slipping into contraction for the first time since February 2020.
· China Evergrande offshore investors face 'large losses' after second payment miss
China Evergrande Group missed paying bond interest due on Wednesday, two bondholders said, its second unpaid offshore debt payment in a week, although the cash-strapped company is scrambling to meet its obligations in its home market.
The company, reeling under a debt pile of $305 billion, was due on Wednesday to make a $47.5 million bond interest payment on its 9.5% March 2024 dollar bond, after having missed $83.5 million in coupon payments last Thursday.
With liabilities equal to 2% of China’s GDP, Evergrande has sparked concerns its woes could spread through the financial system and reverberate around the world, though worries have eased somewhat after the central bank vowed to protect homebuyers’ interests.
· Taiwan sees upside from China power curbs if orders shift
Taiwan may benefit from orders being shifted to the island if China's power curbs disrupt the country's exports, Taiwan Central Bank Governor Yang Chin-long said on Thursday.
· Japan's factory output extends declines on car production cuts
Factory output lost 3.2% in August from the previous month, official data showed on Thursday, hit by weaker production of cars and electronic machines and marking the second consecutive month of contraction after a 1.5% drop in July.
· Australian housing borrowing booms, regulators ready new lending rules
· Southeast Asia needs $2 trillion of investments to reduce emissions, new report finds
· Vietnam's biggest city to start lifting COVID-19 curbs to spur business
Reference: Reuters, CNBC, FXStreet
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