Gold prices hit a five-month high on Monday as inflation worries burnished the safe-haven metal’s appeal even as the dollar and U.S. bond yields strengthened.
· Spot gold was up 0.1% at $1,866.03 per ounce by 02:03 p.m. ET (1902 GMT), following a slight pullback earlier in the day due to profit-taking.
· U.S. gold futures settled down 0.1% at $1,866.60 per ounce.
· There has been some routine profit-taking by shorter-term futures traders but gold’s upward trend is still firmly in place, said Jim Wyckoff, senior analyst at Kitco Metals.
· Bullion has gained about $100 over the past eight sessions, its longest winning streak since May, as its appeal as an inflation hedge has been boosted by a surge in U.S. consumer prices and as major central banks have maintained a dovish stance on interest rates.
· Interest rate hikes tend to reduce non-interest bearing gold’s appeal as it raises the metal’s opportunity cost. However, U.S. benchmark 10-year Treasury yields rose to near three-week high, increasing the opportunity cost of holding the bullion. The dollar index gained 0.3% to a 16-month high against its rivals.
· Saxo Bank analyst Ole Hansen warned, “If gold fails to break above $1,870 today, then there is a risk that could push it back down to $1,830-$1,835 area, as that could disappoint some investors.”
· The Minneapolis Federal Reserve Bank’s president said on Sunday he expected higher inflation in the next few months but said the U.S. central bank should not over react to elevated inflation as it was likely to be temporary.
· “The Federal Reserve’s policy normalization, higher interest rates, the USD’s strengthening, and inflation pressure likely fading in 2022 call for a weaker silver price,” UBS analysts said in a note.
· Silver fell 0.8% to $25.09 per ounce.
· Platinum rose 0.6% to $1,088.51 and palladium gained 2.5% to $2,161.07.
· Biden signs $1 trillion bipartisan infrastructure bill into law, unlocking funds for transportation, broadband, utilities
· Biden, Xi will meet virtually on Monday, White House confirms
Meeting between US, Chinese presidents being held days after countries agree to cooperate on combatting climate change.
· Biden’s meeting with China’s Xi appeasement on all levels
Biden should demand China come clean on the virus and its origins
· Taiwan in focus at Biden-Xi summit, as tariffs and supply chain issues take a back seat
Two issues that dominate the U.S.-China economic relationship, tariffs and supply chain woes, will take a backseat Monday to more pressing security concerns when President Joe Biden holds a virtual summit with Chinese President Xi Jinping.
· Barkin says Fed needs 'a few more months' to see clear picture of inflation, labor market
It may take several more months at least for the Federal Reserve to understand if high inflation and labor shortages are offshoots of the pandemic that will eventually ease, or reflect more durable changes to the economy, Richmond Federal Reserve President Thomas Barkin said on Monday.
· Fed is losing credibility over its inflation narrative, Mohamed El-Erian says
The Federal Reserve is losing credibility over its long-standing view that inflation is transitory, according to Mohamed El-Erian, chief economic advisor at Allianz.
· October retail sales are expected to be strong, showing economy is back on track
Economists predict a boom in October’s retail sales, aided by rising gasoline prices and early holiday shopping.
Retail sales are expected to rise 1.5%, up from September’s 0.7% gain, according to economists polled by Dow Jones. Excluding autos, sales are forecasted to rise 1%, compared to the 0.8% increase a month earlier, Dow Jones found.
The Census Bureau will release the retail sales report on Tuesday, Nov. 16 at 8:30 a.m. ET.
· Inflation fueled by new green policies will boost these stocks and sectors, strategist says
Inflationary pressures arising from efforts by governments and businesses to adhere to net-zero initiatives will extend far beyond energy prices, according to Seema Shah, chief strategist at Principal Global Investors.
The risks of “greenflation” — increases to energy prices and consumer costs triggered by global efforts to transition to green energy — have been well-documented.
· WTO says goods trade slowing due to supply issues, cooler demand
Global goods trade is slowing after a sharp rebound following the initial shock of the COVID-19 pandemic as production and supply disruptions and cooling demand for imports dampen growth, the World Trade Organization said on Monday.
The WTO said its goods trade barometer dropped to 99.5 points, close to the baseline of 100, in November following a record reading of 110.4 in August.
Demand for traded goods was also easing, indicated by falling export orders.
Reference: Fox Business, CNBC, Reuters, Worldometers
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