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·         Gold set for weekly dip on faster rate hike prospects

Gold prices inched higher on Friday but were set for their first weekly decline in three as rising inflation fueled bets of quicker interest rate hikes and dented bullion’s appeal.

U.S. Federal Reserve policymakers are penciling in the possibility of earlier interest rate hikes than they thought would be needed just a few months ago, as inflation continues to soar and the economy picks up speed.

Chicago Fed President Charles Evans, one of the U.S. central bank’s most reliable policy doves, said on Thursday he was “open-minded” to adjustments in monetary policy next year if inflation continued to stay high.

·         Switzerland exported more gold to mainland China in October than in any month since June 2018, according to Swiss customs data that also showed shipments of gold to India falling slightly from September.

·         Gold has gained over $100 in November but now has entered a period of price consolidation

This inflation fear has brought gold back into the spotlight this fall as prices climbed back above $1,800 an ounce, and analysts are now targeting the $1,900 level

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Fed's policy stance to push gold price down over the next few years, says Capital Economics

Despite worrying inflation levels, gold is not likely to surge over the next few years as the U.S. Federal Reserve begins to tighten its monetary policy stance, according to a report by Capital Economics.

"While our forecast that high inflation in the U.S. will be more persistent than the markets expect should ultimately mean that investors demand higher inflation compensation, we also believe that a modest tightening of the Fed's monetary policy stance will drag real Treasury yields a bit higher. That should be enough to cause the gold price to fall over the next few years," said Capital Economics assistant economist Kieran Tompkins.

·         Commerzbank: Physical silver supply shortage

Commerzbank commodities analyst Daniel Briesemann has picked up a narrative that some had been wondering about since the whole meme stock fiasco. The Reddit trading group did start to look at silver ETF's thinking that the silver market was dangerous under-supplied. Briesemann noted that the Silver Institute noted there is a supply deficit and he explains more in his latest report.

Breisemann noted "The Silver Institute published an interim report of the situation on the global silver market yesterday afternoon. Apparently, the physical market is set to show a supply deficit (of 7 million ounces) again this year for the first time since 2015. Overall demand for silver is expected to grow by 15% to 1.29 billion ounces, its highest level in six years, with all demand components contributing."

·         U.S. economy regaining speed as unemployment claims fall; manufacturing surges

·         House delays vote on Biden's $1.75 trillion bill to after hours-long speech

·         Yellen insists $1.75 tln U.S. social, climate spending bill 'fully paid for'

U.S. Treasury Secretary Janet Yellen said a combination of estimates done by the Congressional Budget Office, the Joint Committee on Taxation, and Treasury showed that a $1.75 trillion social and climate spending bill would be "fully paid for."

In fact, Yellen said, the "Build Back Better" legislation would reduce the U.S. debt over time by generating more than $2 trillion in revenues by ensuring the wealthiest Americans and large corporations paid their fair share.

·         She added the Treasury expected increased funding for Internal Revenue Service efforts to crack down on those who do not pay taxes would generate $400 billion in additional revenue, a factor not fully included in the CBO analysis, which conclude the legislation did not raise enough revenue to cover its costs.

·         EXCLUSIVE Rating agencies say Biden's spending plans will not add to inflationary pressure

·         Germany announces new Covid restrictions for the unvaccinated as infection rate hits record

·         Japan to unveil record stimulus package, bucking global tapering trend

Japan is set to announce a record $490 billion spending package on Friday to cushion the economic blow from the COVID-19 pandemic, bucking a global trend towards withdrawing crisis-mode stimulus measures and adding strains to its already tattered finances.

Spending has ballooned due to an array of payouts including those criticised for being unrelated to the pandemic, such as cash handouts to households with youth aged 18 or below, and will likely lead to additional bond issuance this year, analysts said.

·         Tokyo Nov core consumer prices likely rose at fastest pace in over a year

·         China set to keep lending benchmark steady as policymakers eye property risks

·         China's October industrial power consumption rises 3.1% y/y

China's industrial power consumption rose 3.1% in October from a year earlier to 442.9 billion kilowatt-hours (kWh), data from the National Energy Administration (NEA) showed on Friday.

Following is a table giving a breakdown of power consumption as well as other data for October and the first 10 months of 2021.

·         China's September industrial power consumption rises 6% y/y

China's industrial power consumption in September rose 6% from a year earlier to 436.1 billion kilowatt-hours (kWh), data from the National Energy Administration (NEA) showed on Thursday.

Following is a table giving a breakdown of power consumption as well as other data for September and the first three quarters of 2021.

·         Taiwan Oct export orders seen rising for 20th straight month: Reuters poll

India's economic advisory council expects it to grow 7%-7.5% in 2022/23

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Indonesia's Q3 current account surplus biggest in 12 years

·         Gas flows to Germany via Yamal pipeline steady amid price volatility

·         Oil prices stabilize after wild swings on prospect of crude stockpiles release

Oil prices steadied on Friday as investors paused for breath following a day of wild swings prompted by the prospect of coordinated action by the world’s major economies to release official crude reserves from stocks.

Brent crude was up 28 cents or 0.3% at $81.52 a barrel by 0145 GMT, after falling to a six-week low on Thursday before rebounding to close 1.2% higher.

U.S. crude was up 19 cents at $79.20 a barrel, having swung through a more than $2 range the previous session before closing up. Both are heading for a fourth week of declines.

The market gyrations followed a Reuters report that the United States had asked China, Japan and other big buyers to join a release of crude stocks from Strategic Petroleum Reserves (SPR).

Reference: Kitco, CNBC, Reuters