Gold fell in Asia on Tuesday morning. Investors awaited the latest U.S. jobs report to forecast the Federal Reserve’s next policy move.
Gold futures fell 0.49 per cent to $1,813.35 per ounce but remained over the $1,800 level.
Investors somewhat reassure by Fed Chairman Jerome Powell’s statement that interest rate hikes were a long way off as the Fed issued its latest policy decision during the previous week.
Every data point we get between now and the Fed’s Jackson Hole symposium will be critical. The labor market has much-unsold capacity. Suppose there is a sense that the Fed will continue to keep policy settings accommodative in the medium to long term. In that case, gold prices will benefit greatly, especially if inflation forecasts stay pretty high, according to IG Market analyst Kyle Rhoda.
Reserve Bank of Australia
However, Fed Governor Christopher Waller stated on Monday that the central bank might begin asset tapering by October 2021. It will do this if the following two U.S. jobs reports indicate an increase of 800,000 to 1 million in employment. Friday will see the release of the most recent jobs data, which will include non-farm payrolls.
In the Asia Pacific, the Reserve Bank of Australia held its interest rate steady at 0.10 per cent when it announced its policy decision earlier in the day. The Bank of England and the Reserve Bank of India will announce their respective determinations on Thursday and Friday.
SPDR Gold Trust (P: GLD) holdings declined 0.2 per cent to 1,029.71 tons on Monday, indicating investor sentiment. Gold futures are moving along a flat 200-day EMA, further symptomatic of a consolidating market, Phillip Futures senior commodities.
Oil was down in Asia on Tuesday morning, as COVID-19 fears, combined with sluggish manufacturing activity in the United States and China, dampened fuel consumption’s outlook.
Brent oil prices fell 0.11 per cent to $72.81, while WTI futures fell 0.10 per cent to $71.19. Brent and WTI futures fell more than 3% on Monday but remained close to $71. China, the world’s largest importer of oil, is fighting to contain the latest COVID-19 epidemic. Cases of the virus’s extremely infectious Delta version in 14 of the 32 provinces. That could result in additional mobility limitations imposed, According to ANZ analysts.
Manufacturing activity has slowed in both the United States and China, adding to investors’ anxieties. In July, the manufacturing purchasing managers index (PMI) in the United States was 63.4. The manufacturing PMI in the Institute of Supply Management (ISM) was 59.5. In China, statistics released earlier this week showed that the Caixin manufacturing purchasing managers’ index (PMI) was 50.3 in July. Meanwhile the manufacturing and non-mainland PMIs were 53.3.
Meanwhile, Iran’s Foreign Ministry stated that the country would respond quickly to any danger to its security on Monday. The announcement comes as the United States and the United Kingdom continue to hold Iran responsible for an attack on an Israeli-managed tanker off the coast of Oman the previous week.
On the supply side, the Organization of Petroleum Exporting Countries and Allies (OPEC+) implemented its plan to increase output by 400,000 barrels per day per month beginning in August. It intends to do so until all production interrupted due to COVID-19 is resumed.
In July, OPEC members Saudi Arabia, Kuwait, and the United Arab Emirates increased crude shipments to multi-month highs.