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​Gold flat as Fed expected to stick to tapering plans

 

·         Gold prices were flat on Monday as the bullion was caught between a dip in the dollar and fears that the U.S. Federal Reserve would start paring stimulus this year despite weak jobs data.

 

·         Spot gold was flat at $1,756.25 per ounce by 0053 GMT. Prices hit a two-week peak on Friday after the payrolls data but pared gains during the session.

 

·         U.S. gold futures were unchanged at $1,756.80.

 

·         The dollar index inched down 0.1%. The benchmark U.S. 10-year Treasury yields touched its highest level since early June on Friday.

 

·         Data from the Labor Department on Friday showed U.S. nonfarm payrolls increased by 194,000 jobs last month way below economists’ forecast of 500,000.

 

·         The Fed may move to begin reducing its support for the economy next month despite a sharp slowdown in jobs gains last month as the latest U.S. surge in Covid-19 cases crested and began to recede.

 

·         Bullion is seen as a hedge against the inflation and currency debasement likely from the widespread stimulus. The Fed’s tapering could tackle both those conditions, diminishing gold’s appeal.

 

·         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.

 

·         Holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, fell 0.2% to 985.05 tons on Friday from 986.54 tons on Thursday.

 

·         Physical gold rates in India flipped to a discount for the first time in over two months last week as a rise in local prices curbed demand, while buying in China was expected to pick up after the Golden Week holiday.

 

·         Spot silver fell 0.1% to $22.64 per ounce, while platinum eased 0.4% to $1,022.42.

 

·         Palladium rose 2.6% to $2,130.94, having earlier hit a high since Sept. 13.

 

 

·         U.S. earnings seen strong, but supply chains and costs worry investors

Investors are primed for another period of strong U.S. profit growth as third-quarter reports from Corporate America flow in starting next week. But as business continues to emerge from the coronavirus pandemic, new problems are arising that are taking center stage for Wall Street, including supply-chain snags and inflationary pressures.

 

·         New Zealand makes COVID-19 vaccinations mandatory for health worker

New Zealand will require teachers and workers in the health and disability sectors to be fully vaccinated against COVID-19, Prime Minister Jacinda Ardern said on Monday, as she extended restrictions in Auckland, its largest city, for another week.

 

·         Sydney emerges from pandemic lockdown, beer in hand

 

·         China’s Xi vows ‘reunification’ with Taiwan, but holds off threatening force

Chinese President Xi Jinping vowed on Saturday to realise peaceful “reunification” with Taiwan, though did not directly mention the use of force after a week of tensions with the Chinese-claimed island that sparked international concern.

 

·         China presses U.S. to cancel tariffs in test of bilateral engagement

The virtual talks between U.S. Trade Representative Katherine Tai and China’s Vice Premier Liu He follow Tai’s announcement on Monday that she would seek “frank” talks and hold China to its commitments under a “Phase 1″ trade deal negotiated by former President Donald Trump.

Tai intended to use the call, the second between the two, to test whether bilateral engagement can address U.S. complaints about Beijing’s trade and subsidy practices, a USTR official said.

 

·         China rust-belt province warns of more power shortages in energy crisis

China’s largest provincial economy in its northeast rust belt warned of worsening power shortages on Monday, despite government efforts to boost coal supply and manage electricity use in a post-pandemic energy crisis hitting multiple countries.

 

·         Japan households expect inflation to pick up - BOJ survey

Japanese households' inflation expectations rose in the three months to September, a survey showed on Monday, suggesting a global rise in raw material costs may be affecting perceptions in a country worried about the risk of deflation.

The ratio of Japanese households that expect prices to rise a year from now stood at 68.2% in September, up from 66.8% three months ago, a quarterly central bank survey showed.

The median projection of inflation a year from now stood at 3.0% in September, up from 2.0% in June, the survey showed.

 

·         Japan's Kishida puts wage hike incentives ahead of higher capital gains tax

Prime Minister Fumio Kishida said on Monday he will prioritise boosting wages through tax incentives, rather than imposing higher levies on capital gains and dividends to address Japan's income gap.

 

·         Singapore’s new ‘vaccinated travel lanes’ won’t significantly increase risks, minister says

Singapore is set to open “vaccinated travel lanes” with more countries — but that doesn’t mean the country is taking on significantly higher risks, Transport Minister S. Iswaran told CNBC on Monday.

 

Reference: Reuters, CNBC