【Market Evening】Gold down but remains above $1,800, Oil mixed, Dollar edges higher,

Gold down but remains above $1,800

Gold prices firmed on Tuesday, propped up by a softer dollar and prospects of the U.S. Federal Reserve delaying a tapering in its pandemic-era bond purchases.

Spot gold price fell 0.658% to $1811.69 per ounce and spot silver fell 1.38% to $24.35 per ounce by 17:30(GMT+8).

The dollar, which usually moves inversely to gold, edged down on Tuesday.

On the central bank front, the European Central Bank handing down its policy decision on Thursday. The Reserve Bank of Australia will hand down its policy decision later in the day, with the Bank of Canada following a day later.

The U.S. Federal Reserve is likely to delay beginning asset tapering after the jobs report released last Friday showed weaker-than-expected non-farm payrolls. Investors will now see whether any of the central banks handing down policy decisions throughout the week will begin tapering their assets.

On the data front, August’s Chinese trade data, released earlier in the day, was better than expected. Exports grew 25.6% year-on-year and imports grew 33.1% year-on-year, while the trade balance was at $58.34 billion.

However, Japan’s household spending grew less than expected in July, contracting 0.9% month-on-month while expanding 0.7% year-on-year.

In India, spot gold imports in August nearly doubled year-on-year thanks to strong demand and as weaker prices prompted jewelers to increase purchases for the upcoming festive season, according to a government source.

Dollar edges higher

The dollar edged higher Tuesday, but remained near recent lows after last week’s frail jobs report, while attention turns to a number of central bank meetings during the week. 

The Dollar index, which tracks the greenback against a basket of six other currencies, gained 0.2% to 92.215.

USD/JPY rose 0.1% to 109.92, EUR/USD fell 0.1% to 1.1865, just off last week’s high of 1.1909, while GBP/USD dropped 0.1% to 1.3824, after British house price growth slowed to 7.1% in August from 7.6% in July, the weakest reading in five months, according to mortgage lender Halifax. Prices still rose a surprisingly strong 0.7% on the month.

Monday’s U.S. holiday limited activity in the foreign exchange markets, after the latest U.S. jobs report disappointed, suggesting the U.S. Federal Reserve is likely to delay any dialing down of monetary stimulus until November at least.

AUD/USD dropped 0.3% to 0.7416, falling from the recent high of 0.7477, after the Reserve Bank of Australia pushed ahead with a cautious reduction of its bond-buying program, although it extended the length of time it will exist.

The European Central Bank’s policy decision on Thursday will probably be the week’s highlight, with hawkish members becoming more vocal about the gradual scaling back of the central bank’s monetary stimulus. The ECB had increased its pace of bond-buying earlier in the year to stop Eurozone long-term rates being pulled higher by U.S. ones.

Oil mixed

Crude oil prices were mixed on Tuesday as some investors scooped up bargains following recent losses, while Saudi Arabia's sharp cuts in crude contract prices for Asia sparked fears over slower demand and weighed on sentiment.

Brent crude oil price rose 0.22% to $72.01 a barrel while U.S. West Texas Intermediate crude oil price was at $68.65 a barrel, down 0.004% by 17:30(GMT+8).

State oil group Saudi Aramco  notified customers on Sunday that it will cut October official selling prices (OSPs) for all crude grades sold to Asia by at least $1 a barrel.

The deep price cuts, a sign that consumption in the world's top-importing region remains tepid, come as lockdowns across Asia to combat the delta variant of the coronavirus have clouded the economic outlook.

Markets are also contending with a decision by the Organization of the Petroleum Exporting Countries and their allies, a grouping known as OPEC+, to raise output by 400,000 barrels per day a month between August and December.

"Brent came back as investors adjusted positions, but market sentiment remained weak due to slow demand in Asia and in the United States amid a resurgence of the pandemic," said Tetsu　Emori, CEO of Emori Fund Management Inc.

"In order for WTI to move above $70 a barrel, we need some fresh positive news such as signs of subsiding infection or rising demand of jet fuels," he said.

The U.S. economy created the fewest jobs in seven months in August as hiring in the leisure and hospitality sector stalled amid a resurgence in COVID-19 infections, which weighed on demand at restaurants and hotels.

Toshitaka Tazawa, an analyst at Fujitomi Securities Co Ltd, also said that oil prices are expected to struggle to move higher as the U.S. summer driving season wanes after Labor Day weekend.

Oil prices were underpinned by concerns that U.S. supply would remain limited in the wake of Hurricane Ida.

More than 80% of crude oil production in the Gulf of Mexico remained shut after Ida, a U.S. regulator said on Monday, more than a week after the storm made landfall and hit critical infrastructure in the region.

Hedge funds purchased petroleum last week at the second-fastest rate this year after Ida disrupted offshore oil wells and onshore refineries in the Gulf.

A rise in daily crude oil imports by China, the world's top oil buyer, also provided support. China's imports rose 8% in August from a month earlier, customs data showed, as refiners resumed purchases following the issue of new import quotas.

China's exports unexpectedly grew at a faster pace in August thanks to solid global demand, helping take some of the pressure off the world's second-biggest economy as it navigates its way through headwinds from several fronts.

Asian stocks mixed ahead of central bank meetings

European stocks opened lower Tuesday while Asian markets gained after China reported stronger August exports as investors awaited updates on when European and other central banks might wound down their stimulus.

Nikkei 225 rose 0.86% to 29,916.14.

South Korea KOSPI fell 0.50% to 3,187.42.

S&P/ASX 200 rose 0.024% to close at 7,530.30.

Taiwan capitalization weighted stock fell 0.38% to 17,428.87.

Hang Seng Index rose 0.73% to 26,353.63.

Investors have been encouraged by the spread of coronavirus vaccinations and stronger U.S. corporate profits, though hopes are tempered by rising infections due to the virus’s more contagious delta variant.

Traders also appear to hope weak job markets in the United States and some other countries might prompt central bankers to postpone the withdrawal of stimulus that has pushed up stock prices.