Gold fell on Thursday as a drop in U.S. weekly initial jobless claims, ahead of the monthly jobs data later this week, boosted Treasury yields and stoked bets that the U.S. Federal Reserve may soon start winding down its economic support.
· Spot gold was down 0.3% at $1,757.30 per ounce by 13:34 p.m. EDT (1734 GMT).
· U.S. gold futures settled 0.2% lower at $1,759.2.
· The number of Americans filing new claims for jobless benefits dropped by the most in three months last week, suggesting the labor market recovery was regaining momentum after a recent slowdown.
· “That report helped to push bond yields up and rally the U.S. stock market a little bit, pressuring gold,” Jim Wyckoff, senior analyst with Kitco Metals.
Reduced stimulus and higher interest rates lift bond yields, translating into increased opportunity costs of holding non-yielding bullion.
Also, the U.S. debt limit is likely being pushed to December. So, that was a calming effect on the marketplace, bullish for stocks and bearish for gold, Wyckoff added.
· The dollar eased slightly from near a one-year high, buoyed by lingering inflation concerns and expectations the Fed would have to act sooner to normalise policy.
· While gold is traditionally considered an inflation hedge, a stronger dollar makes it more expensive for holders of other currencies.
· A strong showing of private jobs in September ahead of Friday’s employment numbers also encouraged bets that the Fed could start tapering soon.
· But given the “record high” number of open job positions in the United States, a “positive surprise on the non-farm payrolls should be adjustable for the gold market without causing a major sell-off”, Julius Baer analyst Carsten Menke said.
· Spot silver steadied at $22.59 per ounce.
· Platinum fell 0.2% to $982.37.
· Palladium jumped 3.7%, on course for its best day since Sept. 22, to $1,958.61.
· Dollar takes a pause ahead of U.S. jobs data
The dollar was steady against a basket of currencies on Thursday, the day before U.S. labor market data that could provide clues to timing of the Federal Reserve’s next move.
The U.S. Dollar Currency Index, which measures the greenback against a basket of six currencies, was unchanged, trading at 94.199, not far from the one-year high of 94.504 touched last week.
· TREASURIES-Yields rise as eased debt ceiling fears fuel risk appetite
The benchmark 10-year yield was last up 4.7 basis points at 1.5712%.
The Federal Reserve has said it is likely to begin reducing its monthly bond purchases as soon as November and then follow up with interest rate increases, as the U.S. central bank’s turn from pandemic crisis policies gains momentum.
Friday’s non-farm payrolls data is expected to show continued improvement in the labor market, with a forecast for 455,000 jobs added in September, a Reuters poll showed.
· Jobless claims post sharp decline to 326,000, better than expectations
The total of Americans submitting jobless claims fell sharply last week as enhanced federal unemployment benefits wound down, the Labor Department reported Thursday.
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Initial filings for unemployment benefits totaled a seasonally adjusted 326,000 for the week ended Oct. 2, below the 345,000 Dow Jones estimate and a drop from the previous week’s 364,000.
Continuing claims, which run a week behind and total those who have filed for at least two weeks of benefits, also posted a healthy decline, dropping 97,000 to 2.71 million.
· Fed's Mester says U.S. inflation mostly driven by pandemic-related factors
Both supply-side and demand-side factors are contributing to U.S. inflation right now, but most of the current price changes may be driven by pandemic-related shifts that could subside over time, Cleveland Federal Reserve Bank President Loretta Mester said on Thursday.
· U.S. Senate aide says leaders agreed to raise debt limit by $480 billion
U.S. Senate leaders have agreed to raise the Treasury Department’s borrowing authority by $480 billion, a Senate aide said Thursday, adding that that amount is what the Treasury Department said was needed to extend the debt ceiling to December 3. The proposal could go to the Senate floor later Thursday.
· Senate passes short-term increase to the debt limit, House to vote on it next
· Global tax deal inches closer as holdout Ireland agrees to sign up
Ireland has decided to sign up to a global deal that will push its corporate tax rate to 15%, marking a huge shift in its policy.
The G-7 and G-20 nations agreed earlier this summer to join forces to tackle tax evasion and harmonize rules across the globe. The plan, if implemented, would force multinationals to pay tax where they operate — not just where they have their headquarters — and would impose a minimum corporate rate of 15%.
· ECB's brain trust spars over inflation outlook
The European Central Bank’s two leading economic thinkers sparred on Thursday over how likely it was for the recent, sharp rise in euro zone inflation to become permanent.
Philip Lane and Isabel Schnabel, who lead the economic debate on the ECB’s board, both repeated the ECB’s official line that the spike in price growth would ease next year as the effects of a post-pandemic bounce fade.
· George Soros’ fund owns bitcoin, CEO confirms
Soros Fund Management, the asset management company founded by billionaire investor and philanthropist George Soros, has revealed that it owns the cryptocurrency bitcoin.
· Britain looks to Gulf countries for new trade deal
Britain will on Friday take its first step towards trade negotiations with the six-country Gulf Cooperation Council (GCC), asking British businesses what they want an agreement to cover.
· U.S. troops rotating into Taiwan for training -sources
Small numbers of U.S. special operations forces have been rotating into Taiwan on a temporary basis to carry out training of Taiwanese forces, two sources familiar with the matter said on Thursday, speaking on condition of anonymity.
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· Biden calls on more U.S. businesses to require COVID-19 vaccinations
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