MTS Help Center

Gold touched a one-month high on Thursday, as a dip in the dollar and U.S. bond yields allowed investors to turn to bullion as an inflation hedge.

·         Spot gold gained 0.2% at $1,796.59 per ounce by 13:46 p.m. EDT (1746 GMT), after hitting its highest since Sept. 15 at $1,800.12.

·         U.S. gold futures settled up 0.2% at $1,797.9.

 

·         Gold also seemed to largely overlook better U.S. weekly labour data.

·         “Traders and investors are finally realizing that rising inflation is, historically, bullish for metals, no matter what the Federal Reserve does,” said Jim Wyckoff, senior analyst at Kitco Metals.

Further volatility in equities this month may also spark some safe-haven demand for gold, Wyckoff added.

 

·         Wider market sentiment has remained fragile, as a global energy crunch stoked fears that the resultant jump in prices may slow growth.

 

·         Chinese producer prices posted a record annual increase last month and U.S. consumer prices also increased, fanning fears that central banks might unwind stimulus sooner than anticipated.

 

·         While gold is considered an inflation hedge, reduced stimulus and interest rate hikes push government bond yields up, raising the opportunity cost of holding non-yielding bullion.

 

·         But “now that we’ve got a little bit of visibility on what the Fed intends to do in terms of tapering, and it’s a relatively small amount; that’s been positive for gold,” independent analyst Ross Norman said, adding gold faced technical resistance around $1,800 and $1,835.

 

·         Latest Fed minutes showed it could start tapering by mid-November.

 

·         TD Securities said in a note that while the “intense focus on pricing the Fed’s exit has ignored rising stagflationary risks,” that’s yet to translate into additional gold demand.

However, as the energy crisis intensifies, reasons for owning gold are “growing more compelling.”

·         Silver rose 1.7% to $23.45 per ounce and palladium climbed 1.4% to $2,136.18. Both metals hit a one-month peak earlier.

·         Platinum jumped 3.1% to $1,051.78, having its highest since early-August.

 

·         Fed's Harker says it will soon be time to start tapering asset purchases

It will soon be time to start reducing the Federal Reserve’s asset purchases from the current pace of $120 billion a month, but the central bank is not likely to raise interest rates for at least another year, Philadelphia Federal Reserve Bank President Patrick Harker said on Thursday.

 

·         Fed's Barkin says bond buying taper won't hurt 'robust' demand

Richmond Federal Reserve President Tom Barkin on Thursday said he does not expect the U.S. central bank’s plan to begin to taper its asset purchases to hobble economic growth, but that it could be a “positive” move in setting expectations for inflation.

 

·         Fed should pursue faster taper, inflation levels "concerning" -Bullard

Current high levels of inflation may not abate as soon as many U.S. Federal Reserve policymakers expect, St. Louis Fed President James Bullard said on Thursday, as he once again urged the central bank to pursue a faster taper of its bond-buying program.

 

·         Fed's Daly: it's time for taper, but talk of rate hikes 'premature'

San Francisco Federal Reserve Bank President Mary Daly on Thursday said that inflation and employment had made enough progress for the U.S. central bank to begin dialing down its monthly bond buying, but is far from ready for interest rate hikes.

 

·         Fed's Bostic says a digital dollar could raise privacy questions and other issues

A U.S. central bank digital currency could introduce a host of questions about privacy and government authority, and there are many steps needed before one could be put into place, Atlanta Federal Reserve Bank President Raphael Bostic said on Thursday.

 

·         NY Fed’s Logan says she expects usage of reverse repo facility to come down over time

The popularity of a Federal Reserve facility that allows financial firms to park cash with the central bank overnight is not concerning and usage should decline as rates on other investments start to rise, a senior New York Fed official said on Thursday.

 

·         U.S. weekly jobless claims fall below 300,000 in boost to labor market recovery

The number of Americans filing new claims for unemployment benefits dropped below 300,000 last week for the first time in 19 months, further evidence that a shortage of workers was behind slower job growth rather than weakening demand for labor.

Also, continuing claims, which run a week behind the headline number, fell by 134,000 to 2.59 million, another pandemic-era low.

In another report on Thursday, the Labor Department said its producer price index for final demand rose 0.5% in September, the smallest gain in nine months, after increasing 0.7% in August. Economists had forecast the PPI gaining 0.6%.

 

·         10-year Treasury yield dips after lower-than-expected producer inflation

The yield on the benchmark 10-year Treasury note gave up 3.1 basis points, falling to 1.518% at 4:12 p.m. ET.

 

·         Russia’s Putin says crypto has ‘value’ — but maybe not for trading oil

Russian President Vladimir Putin thinks cryptocurrencies have value — but he’s not convinced they can replace the U.S. dollar in settling oil trades.

·         As yields rise, some U.S. banks shift cash to Treasuries

Some big U.S. banks are buying more U.S. government securities as yields start to rise and the Federal Reserve appears ready to taper its bond-buying program - a balance sheet shift that analysts say could boost bank earnings by several percentage points depending on how they play their hands.

 

Bank of America Corp (BAC.N) and Citigroup Inc (C.N) on Thursday said they had picked up extra net interest revenue during the quarter by buying securities with higher yields.

 

JPMorgan Chase & Co, however, (JPM.N) said on Wednesday that it continues to hoard cash, expecting rates to move higher as Chief Executive Jamie Dimon predicts.

 

Citigroup Chief Financial Officer Mark Mason said the bank has been buying Treasuries and mortgage-backed securities.

 

·         Climate change will dominate Biden’s agenda when he heads to Europe in two weeks

 

·         Goldman Sachs says oil prices could be higher for much longer

 

·         Australia is preparing for another showdown with Big Tech — this time over defamatory posts

 

·         IMF panel urges central banks to closely monitor inflation, 'act appropriately'

The International Monetary Fund’s steering committee on Thursday urged global policymakers to monitor pricing dynamics closely, but to “look through” inflationary pressures that are transitory and will fade as economies normalize.

 

·         BoE's Mann says she can wait before raising rates

The Bank of England can hold off on raising interest rates because investors are tightening monetary conditions by betting on future rate hikes in Britain and the United States, BoE interest rate-setter Catherine Mann said.

 

·         Bank of Canada chief: supply chain problems mean inflation is set to take longer to come down

  

·         COVID-19 UPDATES:

 

·         U.S. FDA advisers back Moderna COVID booster shots for older and high-risk people