Gold rebounds over 2% on robust sentiment, dollar weakness
· Gold jumped over 2% to its highest in nearly a week on Monday as a weaker dollar, a pull-back in U.S. Treasury yields along with Warren Buffett’s Berkshire Hathaway buying a stake in major gold miner bolstered investor morale.
· Spot gold climbed 1.9% to $1,981.41 an ounce and U.S. gold futures settled up 2.5% at $1,998.70.
· Gold last week registered its biggest decline since March as investors reassessed positions after bullion retreated sharply from a record peak of $2,072.50 scaled on Aug. 7.
· “The sharp pullback in prices and the price action that has followed has revealed quite a bit about the underlying extent of speculative appetite for precious metals,” said Daniel Ghali, commodity strategist at TD Securities, adding that the fact Warren Buffett has now “embraced gold” is helping sentiment.
A regulatory filing on Friday disclosed Berkshire Hathaway’s new 20.9 million share investment in one of the world’s largest mining companies, Barrick Gold Corp.
“Recognizing that he has bought a stock and not gold commodity itself, it does provide a compelling narrative for those that were looking to buy gold and perhaps remained on the sidelines, but the positive sentiment now is helping them pull the trigger,” Ghali added.
· Also helping gold, the dollar fell to a more than one-week low, benchmark 10-year U.S. Treasury note yields eased and the New York Fed’s Empire State Manufacturing Survey index dropped to 3.7.
· Investors now await the minutes from the U.S. Federal Reserve’s last policy meeting on Wednesday.
· “The market expects the Fed to be very supportive, we’ll be above $2,000 per ounce before Fed minutes, and north of $2,250 by the end of year,” said Bob Haberkorn, senior market strategist at RJO Futures.
· Elsewhere, silver rose 3.7% to $27.37 an ounce, platinum gained 1.5% to $950.03 and palladium jumped 4.1% to $2,194.55.
· CORONAVIRUS UPDATE:
Global cases: More than 22 million
Global deaths: At least 776,795
U.S. cases: More than 5.6 million
U.S. deaths: At least 173,000
U.S. averaging over 50,000 cases a day
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New York gyms to reopen as soon as Aug. 24, Cuomo says
Gyms across New York will be allowed to reopen as soon as next week after being shuttered for more than five months, Gov. Andrew Cuomo announced.
Gyms will be allowed to reopen at 33% capacity, Cuomo said, and masks will be required at all times. Local officials also must inspect all gyms that want to reopen to ensure that they’re in compliance with the state guidelines, which Cuomo said health officials and engineers created.
· U.S. tightens restrictions on Huawei access to technology and chips
The Trump administration announced on Monday it will further tighten restrictions on Huawei Technologies, aimed at cracking down on the Chinese telecommunications giant access to commercially available chips.
The Commerce Department actions, first reported by Reuters, will expand restrictions announced in May aimed at preventing Huawei from obtaining semiconductors without a special license — including chips made by foreign firms that have been developed or produced with U.S. software or technology.
In a statement Monday, Secretary of State Mike Pompeo said the Commerce Department added 38 Huawei affiliates to the U.S. government’s economic blacklist. That raises the total to 152 affiliates since Huawei was first added in May 2019.
· G7 to consider extending debt freeze for low-income countries: U.S. Treasury
Finance ministers from the Group of Seven rich countries on Monday noted improved conditions in their economies, but underscored their concerns about the debt problems facing low-income nations, a U.S. Treasury spokesperson said.
· Trump may support U.S. Postal Service funding if added to stimulus measures: Meadows
White House Chief of Staff Mark Meadows said on Monday that the Trump administration is willing to support funding for the U.S. Postal Service if it accompanies a package of coronavirus stimulus measures.
· Japan manufacturers' gloom eases slightly but pandemic woes remain
Japan’s manufacturers were their least pessimistic in four months in August, the Reuters Tankan survey of business sentiment showed on Tuesday, but signalled a slow recovery from the coronavirus pandemic.
The reading highlights the immense task policymakers face to pull the economy out of its deepest recession on record after the coronavirus pandemic pummelled corporate and household activity.
Reference: CNBC, Reuters
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