Gold slips as dollar gains some ground, equities firm
· Gold prices fell on Monday, set for its biggest drop in nearly two weeks, as a bounce in dollar and buoyant equities dimmed the safe-haven metal’s appeal.
· Spot gold fell 0.4% to $1,800.96 per ounce by 0659 GMT. U.S. gold futures dropped 0.6% to $1,799.30 per ounce.
· While there has been some concerns over the highly contagious the Delta variant of the coronavirus, the more optimistic side of the market sees this as temporary and think economic growth and inflationary pressures might return sooner, preventing any sort of convincing recovery in gold prices in the near-term, said Harshal Barot, a senior research consultant for South Asia at Metals Focus.
· Asian shares rallied after Wall Street posted record closing highs on Friday, while the dollar index inched up 0.1% after declining for two sessions.
· Analysts said the bullion was likely to draw support from lingering Delta variant concerns that could hamper the pace of global economic recovery and persistant loose monetary policies.
· Market participants now await U.S. data including consumer price index on Tuesday, and Federal Reserve Chair Jerome Powell’s testimony on Wednesday and Thursday for cues on the timeline for policy tightening.
· A surprise hawkish tilt by the Fed had sent gold in June to its worst month since November 2016.
· Higher interest rates increase the opportunity cost of holding bullion, which pays no interest.
· On the technical front, spot gold still targets $1,789 per ounce, as it failed a few times to break a resistance zone of $1,813-$1,818, said Reuters technical analyst Wang Tao.
· Among other precious metals, silver fell 0.4% to $25.98 per ounce, palladium eased 0.2% to $2,802.68 per ounce and platinum dropped 0.9% to $1,093.58.
· Biden backs Trump rejection of China’s South China Sea claim
The Biden administration on Sunday upheld a Trump-era rejection of nearly all of China’s significant maritime claims in the South China Sea. The administration also warned China that any attack on the Philippines in the flashpoint region would draw a U.S. response under a mutual defense treaty.
· Japan's May machinery orders rise for third straight month
Japan’s core machinery orders rose for the third straight month in May, a welcome sign for an economy struggling to overcome the hit from the coronavirus pandemic.
· Taiwan to receive 10 million doses of BioNTech Covid vaccine
· South Korea reports 1,100 new Covid cases as tighter social distancing measures begin in Seoul
· Pandemic not over, Johnson warns as England set for rule easing
British Prime Minister Boris Johnson will urge caution on Monday as he is expected to confirm plans to remove nearly all remaining COVID-19 restrictions in England from July 19, despite a surge of cases to levels unseen for months.
· Australia's COVID-19 Delta outbreak worsens despite Sydney lockdown
· Vietnam to expand movement curbs as coronavirus cases hit record high
· Philippine c.bank governor: not worried on Fed hike, weaker peso
Reference: Reuters, CNBC
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