Gold firms near key $1,800 level as dollar weakens
· Gold prices hovered close to the key $1,800 level on Monday, supported by a weaker dollar as investors assessed the Federal Reserve’s likely response to inflationary pressure after its chair said inflation could last longer than expected.
· Spot gold was up 0.3% at $1,797.81 per ounce, as of 0712 GMT. U.S. gold futures gained 0.1% to $1,797.20.
· On Friday, the metal rallied to its highest level since early-September before paring gains after Fed Chairman Jerome Powell said the U.S. central bank should start reducing its asset purchases.
· “There is some short-term momentum building in gold as some investors look for an inflation hedge and see gold as a potentially provider of that,” IG markets analyst Kyle Rodda said, adding that $1,830 is a key resistance level if gold breaks above $1,800.
· In the long term, however, Rodda said gold’s trajectory hinged mainly on how aggressive central banks would act to contain inflation.
· Gold is often considered an inflation hedge, though reduced stimulus and interest rate hikes push government bond yields up, translating into a higher opportunity cost for non-yielding bullion.
· “Gold’s challenge will be whether it can weather an FOMC tapering announcement next week, especially if, as expected, U.S. yields and the dollar start their move higher again,” Jeffrey Halley, senior market analyst for Asia-Pacific at OANDA said in a note.
· Market participants now eye the Bank of Japan (BoJ) and the European Central Bank (ECB) meetings due on Thursday.
· Adding to gold’s support, the dollar eased 0.1%, making bullion more appealing to buyers holding other currencies.
· On the technical front, gold may retest a resistance at $1,814 per ounce, a break above could lead to a gain to $1,826, according to Reuters technical analyst Wang Tao. Spot silver rose 0.5% to $24.43 per ounce. Platinum was up 0.2% at $1,042.23 and palladium rose 0.6% to $2,033.21.
· China coal futures fall for a fourth day as govt intervenes
China’s thermal coal futures fell for a fourth day on Monday, extending losses since last week when they cooled from record highs after Beijing said it would intervene to tame prices
· China will uphold world peace, Xi says, despite others' concerns
President Xi Jinping vowed on Monday that China would always uphold world peace and international rules, amid concerns expressed by the United States and other countries over the nation's increasing assertiveness globally.
· In setback for Kishida, Japan's ruling LDP loses upper house seat
Japanese Prime Minister Fumio Kishida suffered an unexpected blow just days before his ruling Liberal Democratic Party (LDP) heads into national polls, as the party lost one of two parliamentary by-elections over the weekend.
· Russian warships enter Sea of Japan after circling archipelago with Chinese vessels
Five Russian Navy ships entered the Sea of Japan through the Tsushima Strait in the country's southwest having previously formed a flotilla with five Chinese ships that had sailed around most of the Japanese archipelago, the Defense Ministry said Monday.
· Singapore plans to import up to 4GW of electricity by 2035
Singapore plans to import up to four gigawatts (GW) of electricity by 2035, the country’s trade and industry minister Gan Kim Yong said on Monday.
The imports will constitute around 30% of the country’s electricity supply, said the minister in a speech to the Singapore International Energy Week.
· Indonesia sees Q3 GDP growth at 4.3% y/y, warns of future headwinds
· Fitch Solutions raises Malaysia’s real GDP growth forecast to 1.5% as Covid-19 situation improves
Fitch Solutions Country Risk and Industry Research on Monday (Oct 25) said it had revised upwards its 2021 real gross domestic product (GDP) growth forecast for Malaysia to 1.5% from 0% as the Covid-19 situation improves.
Reference: Reuters, CNBC
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