Gold prices rose to a more than one-week high on Monday as a weaker dollar and risk off sentiment in the equity market lifted demand for the safe-haven metal.
· Spot gold was up 0.3% at $1,764.92 per ounce by 13:37 p.m. EDT (1737 GMT).
· Gold futures settled at $1,770.4 an ounce.
· “We’re seeing more risk aversion in the markets and gold appears to be benefiting from that. Quite often we’ve seen the dollar do well in these conditions which has dragged on gold, but we’re seeing the opposite today,” OANDA analyst Craig Erlam said.
“Perhaps investors getting a little nervous about central banks withdrawing stimulus at such an uncertain time for the economy.”
· Wall Street’s main indexes tumbled as investors shifted out of technology stocks in the face of rising Treasury yields, while fresh U.S.-China concerns over trade and Taiwan offered another reason for caution.
· China blamed the United States on Monday for increased tensions over Taiwan and vowed to “smash” any separatist plots, as the island reported the largest ever incursion by China’s air force into its air defence zone at 52 aircraft.
· Investors now await U.S. September nonfarm payrolls report due on Friday, which is expected to show a continued improvement in the labour market, which could influence the Federal Reserve’s timeline for tapering economic support.
· “Risk appetite will continue to provide short-term direction in terms of safe-haven demand ahead of the U.S. nonfarm payrolls report on Friday,” said Ricardo Evangelista, senior analyst at ActivTrades.
· Dollar sturdy after 4 consecutive weeks of advances
The dollar consolidated gains against its rivals on Monday after four consecutive weeks of increases as widening concerns about the Chinese property sector and firm U.S. Treasury yields have encouraged hedge funds to ramp up their long positions.
After spending the second quarter of 2021 on the back foot the dollar has received a fresh boost in recent weeks, climbing to its highest levels in a year against its rivals last week as top investment banks have revised up their forecasts.
Every other major currency weakened against the greenback last week with traders now firmly eyeing on the U.S. jobs data for September due on Friday to decide on whether the Fed will press the button on its decision to taper its bond purchases.
In London trading on Monday, the euro dipped back below $1.16 and at $1.1598 is not far from last week’s trough at $1.1563.
Versus a basket of its rivals, the dollar was broadly steady at 93.96 after gaining for four consecutive weeks, its biggest rising streak since late June, according to Refinitiv data.
Latest weekly positioning data showed hedge funds have increased their dollar holdings against its rivals to its highest levels since November 2019.
With Chinese markets shut for a holiday, traders attention will be firmly focused on monthly U.S. jobs data on Friday that analysts believe will pave the way for U.S. policymakers to strike a more hawkish tone. Yields on benchmark 10-year U.S. Treasury debt were holding near their highest levels in more than three months at 1.47%.
Friday’s U.S. labor data is expected to show continued improvement in the job market, with a forecast for 460,000 jobs to have been added in September - enough to keep the Federal Reserve on course to begin tapering before year’s end.
· ETFs enter historically volatile October strong after 10th straight month of inflows
Dave Nadig, CIO and director of research at ETF Trends and ETF Database, GraniteShares founder and CEO Will Rhind and State Street Global Advisors’ head of SPDR Americas Research Matthew Bartolini talk September’s ETF inflows and what could lie ahead in October. With CNBC’s Leslie Picker.
· U.S. factory orders gain steam as manufacturing keeps humming
The Commerce Department said on Monday that factory orders increased 1.2% in August. Data for July was revised higher to show orders rising 0.7% instead of gaining 0.4% as previously reported. Orders have now increased for four straight months. Economists polled by Reuters had forecast factory orders gaining 1.0%. Orders shot up 18.0% on a year-on-year basis.
· U.S. trade chief Tai seeks talks with China, won't rule out new tariff actions
Top U.S. trade negotiator Katherine Tai on Monday pledged to exclude some Chinese imports from tariffs imposed by former President Donald Trump while pressing Beijing in "frank" talks over its failure to keep promises made in Trump's trade deal and end harmful industrial policies.
· Biden says raising the debt limit is not about new spending
President Joe Biden on Monday said raising the debt limit is about paying off old debts and not about new spending while calling recent actions from Republican lawmakers “reckless and dangerous”.
Senate Republicans have twice blocked action to raise the debt ceiling.
· Biden says Republican stonewalling on debt ceiling risks U.S. default
President Joe Biden said on Monday the federal government could breach its $28.4 trillion debt limit in a historic default unless Republicans join Democrats in voting to raise it in the two next weeks.
· Bank of America launches research coverage for digital assets
Bank of America Corp published its first research coverage focused on cryptocurrencies and other digital assets on Monday, joining other mainstream financial institutions as they strengthen their involvement with the asset class.
· Cryptocurrencies post inflows for 7 straight weeks, led by bitcoin - CoinShares data
· Fed says watchdog to review policymakers' trading activity for lapses
· Fed policymakers’ trading to get more scrutiny
Euro zone ministers expect inflation to slow in 2022
The acceleration of euro zone inflation, driven energy prices, is mostly temporary and price growth will slow down again next year as forecast by the European Central Bank and the European Commission, euro zone finance ministers agreed on Monday.
· Bank of Mexico deputy governor sees more rate hikes coming
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