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Gold rises over 1% as retreat in dollar, yields boost allure

·         Gold prices jumped more than 1% on Monday, with the rally spilling over into other precious metals as well, driven by a retreat in the dollar and U.S. Treasury yields.

 

·         Spot gold rose 1.3% to $1,791.26 per ounce, after hitting its highest since April 22 at $1,797.75. U.S. gold futures settled 1.4% higher at $1,791.80.

“A combination of bond yields remaining tame, the dollar under pressure, the amount of fiscal and monetary stimulus in this market ... all of those factors continue to drive gold and silver prices higher,” said David Meger, director of metals trading at High Ridge Futures.

·         The dollar index slipped 0.3%, making gold cheaper, while benchmark U.S. 10-year Treasury yields also retreated, reducing the opportunity cost of holding non-interest bearing gold.

 

·         Gold also found support from data showing U.S. manufacturing activity grew at a slower pace in April.

 

 

·         Investors now await Friday’s labour market numbers to gauge U.S. economic health.

But strong economic data can also push gold higher as it means inflation will rise, said Michael Matousek, head trader at U.S. Global Investors.

 

·         “We need to see gold get above the $1,800 level and sustain it for a little bit, and then it could be off to the races for $2,000.”

 

·         Gold is considered a hedge against inflation.

 

 

·         Elsewhere, auto catalyst metal palladium rose 0.9% to $2,961.81 per ounce, after hitting an all-time high of $3,007.73 on Friday.

While output cuts by the automobile sector necessitated by a shortage of semiconductor components could reduce palladium demand this year, the impact would be relatively small compared with production losses from Russia’s Nornickel, with a sizeable market deficit still expected, Heraeus Precious Metals said in a note.

·         Silver rose 3.7% to $26.86 per ounce, after hitting $26.95, its highest mark since March 1. Platinum rose 2% to $1,222.53.

·         Supply chain bottlenecks amid roaring demand slow U.S. manufacturing

U.S. manufacturing activity grew at a slower pace in April, restrained by shortages of inputs as rising vaccinations against COVID-19 and massive fiscal stimulus unleashed pent-up demand.

The survey from the Institute for Supply Management (ISM) on Monday showed record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products across industries.

The ISM’s index of national factory activity fell to a reading of 60.7 last month after surging to 64.7 in March, which was the highest level since December 1983. A reading above 50 indicates expansion in manufacturing, which accounts for 11.9% of the U.S. economy. Economists polled by Reuters had forecast the index edging up to 65 in April.

·         Biden and McConnell toughen their positions on tax hikes

President Joe Biden and Republican Senate Minority Leader Mitch McConnell toughened their positions Monday over the tax increases for millionaires and corporations that Biden has proposed to fund his sweeping infrastructure and education plans.

·         Biden to promote $4 trillion plans in visit to Virginia school

President Joe Biden travels to coastal Virginia on Monday to promote how his proposals to spend $4 trillion for infrastructure and families will help the U.S. education system.

 

·         NY Fed's Williams says brighter outlook not enough to affect monetary policy

The U.S. economy is poised to grow at the fastest rate in decades this year as it rebounds from the crisis caused by the coronavirus pandemic, but financial conditions are nowhere near the level where the Federal Reserve would consider pulling back its support, New York Fed Bank President John Williams said on Monday.

 

U.S. gross domestic product could increase by around 7% this year after adjusting for inflation, bringing in the fastest growth since the early 1980s, Williams said. But that boom may not be enough to achieve the Fed’s dual mandate for inflation and maximum employment, Williams said.

 

·         Fed’s Barkin sees higher inflation this year, but then a reversal in 2022

Richmond Federal Reserve President Thomas Barkin told CNBC on Monday that he sees inflation pressures building this year that he expects to subside in 2022.

 

·         Fed should start talking about tapering, Kaplan says

Dallas Fed President Robert Kaplan said Friday that he thinks the central bank should begin discussions on slowing down, or tapering, its $120 billion of monthly asset purchases.

“At the earliest opportunity, I think it will be appropriate for us to start talking about adjusting those purchases,” Kaplan said, during a talk with the Montgomery County Texas Chamber of Commerce.

The Fed has said it would not start to taper its asset purchases until it had seen “substantial further progress” in meeting its two goals of full employment and 2% inflation.

 

·         Warren Buffett says Berkshire Hathaway is seeing ‘very substantial inflation’ and raising prices

Warren Buffett is seeing inflation among Berkshire Hathaway’s collection of businesses as the economic recovery from the Covid pandemic kicks into high gear.

“We are seeing very substantial inflation,” the Berkshire chairman and CEO said at the conglomerate’s annual shareholder meeting Saturday. “It’s very interesting. We are raising prices. People are raising prices to us and it’s being accepted.”

“We’ve got nine homebuilders in addition to our manufacture housing and operation, which is the largest in the country. So we really do a lot of housing. The costs are just up, up, up. Steel costs, you know, just every day they’re going up,” the legendary investor added.

 

 

·         U.S. screens 1.63 million people at airports, highest since March 2020

 

·         Aviation, travel groups urge fully reopening US-UK travel market

A coalition of U.S. and European travel, airline, union, business and airport groups on Monday called for fully reopening the U.S.-UK air travel market "as soon as safely possible."

 

·         Coronavirus Updates:

COVID-19 infections are still rising in 37 countries.

 

Global Cases: 154.17M (+668,822)

Global Deaths: 3.22M (+10,437)

Top 3 of New Cases:

1. India cases: +355,828  Total 20.27M

2. U.S. Cases: +39,767     Total 33.23M

3. Brazil Cases: 36,524     Total 14.79M

No.15

Japan cases: +5,607        Total  602,862

No.30

Thailand cases: +2,041    Total  71,025

 

Top 3 of New Deaths:

1. India deaths:  +3,438      Total 222,383

2. Brazil deaths: +36,524     Total 408,829

3. Argentina deaths: +540   Total 64,792

 

No.37

Thailand deaths: +31      Total 276

 

 

·         Global Vaccination

So far, at least 181 countries have begun vaccinating people for the coronavirus and have administered at least 1,161,716,000 doses of the vaccine.

 

·         Daily deaths and cases by region

 

This chart uses rolling, seven-day averages. This approach makes trends clearer and smooths out anomalies, such as the lack of reporting during the weekend.

 

 

·         FDA set to authorize Pfizer-BioNTech COVID-19 vaccine for adolescents early next week - NYT

The U.S. Food and Drug Administration is preparing to authorize Pfizer Inc and BioNTech SE’s COVID-19 vaccine for adolescents aged between 12 and 15 years by early next week, the New York Times reported on Monday, citing federal officials familiar with the agency’s plans.

The companies earlier this month applied to the FDA for potential approval of the vaccine, which has already been cleared in the United States for people aged 16 and above. (reut.rs/3nLH8Fj)

The approval is highly anticipated after the drugmakers said in March that the vaccine was found to be safe, effective and produced robust antibody responses in 12- to 15-year-olds in a clinical trial.

The FDA did not immediately respond to a Reuters request for comment.

 

·         Dr. Scott Gottlieb: Here’s why it’s important, even for young Americans, to get second Covid shot

Dr. Scott Gottlieb said Monday he’s not yet concerned by the number of Americans who have skipped their scheduled second Covid vaccine dose.

“We’re not certain that those people aren’t going to eventually come back. They just didn’t come back on time,” the former Food and Drug Administration commissioner said in an interview on CNBC’s “Squawk Box.”

However, Gottlieb said receiving the second Covid shot is necessary to obtain the full protective benefits provided by the vaccines for the months ahead. Pfizer and Moderna’s vaccines require two shots. (Johnson & Johnson’s Covid vaccine, the third cleared for emergency use in the U.S., requires only a single dose.)

 

·         Novavax plans to ship COVID-19 vaccines to Europe from late 2021 - EU source

 

·         Canada’s high-risk populations face COVID-19 vaccine barriers

As Canada’s vaccination campaign ramps up, people at higher risk of transmitting COVID-19 often lack the resources to navigate labyrinthine booking systems or the documentation that would ease their path to inoculation.

 

·         UNICEF chief urges the world to help India ‘now’ as Covid cases soar

 

·         G7 to discuss decisive action to counter threats like Russia and China

 

Britain will on Tuesday seek to agree decisive action from G7 partners to protect democracies against global threats like those posed by China and Russia.

Hosting the second day of a foreign ministers' meeting in London designed to lay the groundwork for a leaders' summit in June, Raab will lead talks among the Group of Seven wealthy nations on threats to democracy, freedoms and human rights.

"The UK’s presidency of the G7 is an opportunity to bring together open, democratic societies and demonstrate unity at a time when it is much needed to tackle shared challenges and rising threats," Raab said in a statement.

In addition to the G7 members Canada, France, Germany, Italy, Japan and the United States, Britain has also invited ministers from Australia, India, South Africa and South Korea this week.

 

·         Philippine foreign secretary directs unusually aggressive tweet at Beijing over South China Sea

Philippine Secretary of Foreign Affairs Teodoro Locsin Jr. slammed China with decidedly undiplomatic language on Twitter Monday, suggesting the Asian giant “get the f--- out” as the two countries engage in a war of words over the South China Sea.