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Gold pared gains on Friday after rising more than 1% on U.S. jobs data miss, as investors came to terms with the possibility the Federal Reserve could still have enough fodder to wean the economy off stimulus this year.

·         Spot gold was up 0.2% at $1,758.86 per ounce by 1:47 p.m. EDT (1747 GMT) after hitting $1,781.20, its highest level since Sept. 22.

·         U.S. gold futures settled down 0.1% at $1,757.4.

·         U.S. employers added just 194,000 jobs in September, well below expectations. But upward revisions to prior months’ data mean the economy has now made up for half of the jobs deficit it faced in December.

·         Gold gained sharply as the data at first appeared to be downbeat, but internals of the report seemed “overall to be not so bad,” said Jim Wyckoff, senior analyst at Kitco Metals.

This drove expectations that the Fed will “continue on its path of wanting to taper monetary policy sooner, rather than later,” leading to the retreat in gold, although yet another poor jobs report next month could change that, Wyckoff added.

·         Gold was also caught between headwinds from higher U.S. Treasury yields, and some support from a slightly weaker dollar.

 

·         SPDR GOLD HOLDINGS:

Back to SELL More 1.49 Tonnes on Friday!

SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, said its holdings fell 1.49 Tonnes to 985.05 tons on Monday from 986.54 tons on previous session.

Overall, the holdings of SPDR decline 4.98 tonnes in this month, but this year net sell 185.69 tonnes.

 

·         The gold market now seems to expect a tapering announcement at some point this year, said Standard Chartered analyst Suki Cooper.

“However, the downside appears well-supported, given the demand response from the physical market.”

Reduced stimulus and higher interest rates lift bond yields, translating into increased opportunity costs of holding non-yielding bullion.

“For the gold narrative to really pick up again, we’d need an impulsive rally above $1,950-60, or the pre-COVID-vaccine-highs and that would require a significant catalyst not in the market right now,” said a New-York based precious metals trader.

But autocatalysts platinum and palladium held on to gains, rising 4.1% to $1,019.74, and 5.8% to $2,073.52 respectively, likely buoyed by the positive fine print in the jobs report.

Spot silver rose 0.5% to $22.70.

 

·         TREASURIES-Yields jump, 10-year tops 1.6% for first time since June

U.S. Treasury yields hit multi-month highs on Friday in the wake of a weaker-than-anticipated September employment report that was still expected to keep the Federal Reserve on track with its tapering plans and as inflation expectations rose. 

The benchmark 10-year yield, which dropped to a session low of 1.558% shortly after the jobs data, later climbed to its highest level since June 4 at 1.617%. It was last up 3.2 basis points at 1.603%. Yields on 20- and 30-year bonds also jumped to levels previously seen in June before easing later in the session.

 

·         Dollar steady after jobs miss as investors bet taper is on track

The U.S. dollar was little moved by a disappointing U.S. employment report on Friday, as traders bet that the numbers will not sway the Federal reserve from starting a tapering of its asset purchases as early as November.

September's employment report is the last one available before the Federal Reserve's Nov. 2-3 policy meeting.

The dollar index , which tracks the greenback against six major currencies, was down 0.1% at 94.067, not far from the one-year high of 94.504 touched last week.

In the digital currency space, bitcoin , the world's biggest cryptocurrency by market value, was 1.5% higher at $54,569.9, just shy of the 5-month high of $56,168 touched earlier in the session. Bitcoin is up about 13% for the week, its second straight weekly gain.

 

·         U.S. Job Growth Falls to Slowest Pace of Year

Economy added just 194,000 jobs while unemployment rate dropped to 4.8% as many workers exited from labor force

 

·         Strong wage gains cast doubt that inflation is going away anytime soon

·         Wage pressures = inflation pressures = Fed taper

 

·         U.S. commerce secretary says no denying supply chain is a problem

 

·         Goldman cuts forecast for U.S. economic growth in 2021 and 2022

Goldman Sachs cut its U.S. economic growth target to 5.6% for 2021 and to 4% for 2022 citing an expected decline in fiscal support through the end of next year and a more delayed recovery in consumer spending than previously expected.

The firm previously expected 5.7% gross domestic product (GDP) growth in 2021 and 4.4% growth in 2022, according to research released on Sunday from authors including its chief economist Jan Hatzius.

 

·         San Francisco Fed's Daly: Too soon to say job market 'stalling'

The U.S. job market will continue to feel the effects of COVID-19, but it is too soon to say it is “stalling,” San Francisco Federal Reserve President Mary Daly said on Sunday.

“It’s going to have these ups and downs, especially with the Delta variant,” Daly said on the CBS weekend news program “Face the Nation” when asked about a second straight month of disappointing job growth in September.

“So I think it’s too soon to say it’s stalling, but certainly we’re seeing the pain of COVID and the pain of the Delta variant impact the labor market,” she said.

 

·         McConnell says Republicans will not again aid Democrats in raising debt limit

One day after the Senate approved a temporary lift to the U.S. debt ceiling, Senate Republican Leader Mitch McConnell wrote in a letter to President Joe Biden that he would not aid Democrats again in raising the debt limit.

 

·         ECB governors expect friction with governments as end of support looms

The European Central Bank must think about the exit from monetary and fiscal support deployed during the coronavirus pandemic even if that displeases governments, three of its policymakers said on Friday.

Belgium's central bank governor Pierre Wunsch, Slovakia's Peter Kazimir and Slovenia's Bostjan Vasle were discussing the end of the ECB's extraordinary stimulus measures, a decision on which is expected in December.

 

·         BoE's Bailey says inflation above target is concerning -Yorkshire Post

Inflation running above the Bank of England's target of 2.0% is concerning and must be managed to prevent it from becoming permanently embedded, the bank's governor, Andrew Bailey, said in an interview with The Yorkshire Post newspaper.

Bailey's comments appeared to favour the more hawkish side of the debate regarding the outlook for interest rates in Britain, despite growing signs of a slowing economy.

 

·         Bank of England's Saunders says get ready for early rate rise

Bank of England policymaker Michael Saunders told households to get ready for "significantly earlier" interest rate rises as inflation pressure mounts in the British economy, the Telegraph newspaper said on Saturday.

Saunders said investors were right to bet on faster increases in borrowing costs with consumer price inflation heading above 4%, adding to signs the BoE might become the first major central bank to raise rates since the pandemic struck.

 

·         Jobs rebound, hot inflation bolster case for Bank of Canada rate hike

 

·         Yellen confident U.S. Congress will pass minimum global corporate tax

Treasury Secretary Janet Yellen said on Sunday she was confident the U.S. Congress would approve legislation to implement the global corporate minimum tax agreed by 136 countries.

Yellen said the actions to bring the United States into compliance with the global minimum tax would likely be included in the so-called reconciliation budget bill containing President Joe Biden's proposed spending initiatives.

The U.S. Chamber of Commerce said it will review details of the Biden administration proposals closely.

·         Global corporate tax deal could shave 1.5%-2% off profit margins: AIA CIO

AIA’s Mark Konyn expects stock markets to outperform bonds for the rest of the year but warns about the potential impact of an upcoming global tax deal on profit margins and economic growth.

 

·         White House declines to comment on Granholm remark on possible crude oil export

White House press spokesperson Jen Psaki declined to comment on U.S. Energy Secretary Jennifer Granholm's remarks on Wednesday that a ban on U.S. crude exports is a possible tool to calm oil prices.

"I would defer to the energy secretary, but I don't have anything new to report on that from internally in the White House," Psaki told reporters.

 

·         British industry warns of factory closures without help on fuel costs

Wholesale gas prices have increased 400% this year in Europe, partly due to low stocks and strong demand from Asia, putting particular pressure on energy intensive industries.

 

·         Taiwan won’t be forced to bow to China, president says

Taiwan will keep bolstering its defenses to ensure nobody can force the island to accept the path China has laid down that offers neither freedom nor democracy, President Tsai Ing-wen said on Sunday, in a strong riposte to Beijing.

Claimed by China as its own territory, Taiwan has come under growing military and political pressure to accept Beijing’s rule, including repeated Chinese air force missions in Taiwan’s air defense identification zone, to international concern.

 

·         China proposes adding cryptocurrency mining to 'negative list' of industries

China has added cryptocurrency mining to a draft list of industries in which investment is restricted or prohibited, although it reduced the number of sectors on the list overall, a document released by the state planner showed on Friday.

The "negative list" details sectors and industries that are off-limits to both Chinese and foreign investors.

Regulators in China banned cryptocurrency trading and mining this year, with the country's central bank vowing to purge "illegal" cryptocurrency activities last month. The crackdown has prompted cryptocurrency exchanges to cut ties with Chinese users.

 

·         Evergrande says six execs have returned funds from advance redemption of products

 

·         Taliban delegation ends discussions with U.S. delegation in Doha

Taliban representatives ended their discussions with a U.S. delegation in Doha and have begun a meeting with European Union representatives, Qatar-based Al Jazeera television reported on Sunday.

 

·         COVID-19 UPDATES:

·         Singapore to open ‘vaccinated travel lanes’ with 8 more countries as it aims for ‘new normal’