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Gold prices were poised for their best day in three weeks on Thursday as the U.S. Federal Reserve and the Bank of England indicated they were in no rush to raise interest rates.

·         Spot gold rose 1.3% to $1,791.71 per ounce by 01:38 p.m. ET (1738 GMT) after touching a three-week low in the prior session.

·         U.S. gold futures for December delivery settled up 1.7% to $1,793.50 per ounce.

·         The Fed indicated that they are probably not going to mess with interest rates, and that is bullish for metals, said Bob Haberkorn, senior market strategist at RJO Futures.

 

“The Bank of England leaving rates unchanged overnight shows central banks right now don’t have an appetite for higher rates,” Haberkorn said, adding that gold could by Friday go “north of $1,800 just based on sentiment and the technicals.”

 

·         The U.S. central bank on Wednesday signaled that it would stay patient on interest rates raises and that it would start trimming its massive bond-buying program this month.

·         Bank of England surprises markets by holding rates at record lows

Following that, the Bank of England kept interest rates on hold on Thursday, dashing expectations for a hike that would have made it the first of the world’s big central banks to raise rates after the pandemic.

·         Ultra-loose U.S. monetary policy has helped drive gold sharply higher since the financial crisis of the late 2000s, with low interest rates cutting the opportunity cost of holding non-yielding assets and inflation fears stoking demand for a hedge.

·         Independent analyst Ross Norman said strong physical demand for gold was supporting the market, as India’s Diwali festival generally boosts sales of the precious metal.

·         SPDR GOLD HOLDINGS:

BUY MORE 2.66 TONNES AT 975.41 TONNES

·         Elsewhere, spot silver rose 1.2% to $23.76 per ounce and palladium gained 0.1% at $2,001.18 per ounce.

·         Platinum fell 0.2% to $1,026.56 per ounce.

 

·         Aluminium prices plunge as China ramps up coal production

The benchmark contract on the London Metal Exchange (LME) was down 3.7% at $2,559 a tonne at 1743 GMT.

It has tumbled 20% from a 13-year high of $3,229 a tonne in mid-October. Chinese coal prices peaked around the same time and have since fallen by around 50%.

 

·         Dollar rebounds as investors buy post-Fed dip

The dollar rebounded on Thursday, recovering after the Federal Reserve repeated it saw high inflation as transitory while all eyes were on the Bank of England which could become the first major central bank to raise rates since the COVID-19 crisis.

The dollar index swung back from a low of 93.80 points shortly after the Fed announcement on Wednesday to 94.25 points at 0800 GMT on Thursday, its highest since Monday.

 

·         U.S. yields dive after Fed stays patient on rate hikes

U.S. Treasury yields fell and the yield curve steepened on Thursday as the market unwound from expectations of quicker Federal Reserve interest rate hikes a day after the central bank signaled it was in no hurry to do so.

A decision by the Bank of England to hold off on raising The benchmark 10-year yield, which rose as high as 1.609% earlier in the session, later fell to its lowest level since mid-October at 1.509%, marking its biggest downward move since July 19. It was last down 5.8 basis points at 1.5209%.

The two-year yield, which hit a 19-month peak of 0.5640% last week amid heightened expectations of a Fed interest rate hike in 2022, tumbled as low as 0.391%. It was last 6.5 basis points lower at 0.4125%.

 

·             October’s jobs report is expected to show a rebound in hiring as Covid cases declined

On the data front, U.S. jobless claims totaled 269,000 for the week ended Oct. 30, the lowest pandemic-era total and better than the 275,000 expected by economists polled by Dow Jones.

October’s hotly anticipated jobs report will be released on Friday. Consensus estimates call for 450,000 jobs added, according to Dow Jones. Nonfarm payrolls increased by 194,000 in September, far short of the 500,000 estimate.

 

·         U.S. labor costs surge in the third quarter; productivity falls sharply

U.S. unit labor costs surged in the third quarter, while productivity declined at its sharpest pace since 1981, adding to signs that high inflation could last for a while.

The Labor Department said on Thursday that unit labor costs, the price of labor per single unit of output, increased at an 8.3% annualized rate last quarter after rising at a 1.1% pace in the April-June quarter. Outside the coronavirus distortions in 2020, the jump in labor costs last quarter was the largest since the first quarter of 2014.

Labor costs advanced at a 4.8% rate compared to a year ago.

 

·         Moderates in U.S. Congress balk at $1.75 trillion Biden social spending bill

A leading moderate Democrat raised doubts about the odds of quickly passing President Joe Biden’s $1.75 trillion social-policy and climate-change bill on Thursday as the party struggled to move ahead after sobering state election losses.

Democrats want to pass that bill and a $1 trillion infrastructure measure already approved by the Senate by Thanksgiving later this month and party leaders said a vote was possible on Thursday night.

 

·         Argentine central bank tells financial institutions to not increase dollar reserves

 

·         COVID-19 UPDATES:

 

·         WHO warns that Europe is once again at the epicenter of the Covid pandemic

 

·         Merck’s Covid pill approved by UK regulator, a potential game changer in fighting the pandemic

 

Reference: CNBC, Reuters, Worldometers