【Market Evening】Gold falls as dollar inches higher, Oil rally ends
Gold falls as dollar inches higher, caution ahead of Jackson Hole; Oil rally ends amid COVID-19 concerns, returning supply;Dollar on back foot as delta worries ease before Jackson Hole.

Gold falls as dollar inches higher
Spot gold prices fell on Thursday, as the dollar ticked higher ahead of U.S. Federal Reserve Chair Jerome Powell’s speech this week, with investors awaiting cues on tapering of economic stimulus.
Spot gold fell 0.35% to $1784.28 per ounce and spot silver fell 0.59% to $23.66 per ounce by 17:30(GMT+8).
“Some investors want to have a little bit of protection in the event that we have a hawkish surprise from Jackson Hole,” said Edward Moya, senior market analyst at OANDA, adding that gold could consolidate on the downside till the symposium.
Powell is scheduled to speak at the Fed’s annual economic symposium at Jackson Hole, Wyoming, on Friday.
While a growing number of Fed officials have been actively discussing the likelihood of dialling back bond-buying program, the rise in coronavirus’ Delta variant has cåast a shade of uncertainty over that view.
“For gold, any signs that they could be more patient amid the ongoing pandemic should see prices well supported. However, any gains in real yields could dampen investor demand,” ANZ Research said in a note.
Gold is viewed as a hedge against inflation and currency debasement. The Fed’s tapering would tackle both those conditions thereby diminishing gold’s appeal.
“Few more corrections are in the cards for gold prices,” said Hareesh V., head of commodity research at Geojit Financial Services.
The situation with coronavirus is not as critical as last year and safe haven demand is likely to be lacklustre in the near term, with investors focusing on riskier assets, he added.
Dollar on back foot as delta worries ease
The dollar hovered near a one-week low versus major peers on Thursday amid optimism the delta coronavirus variant won’t derail a global economic recovery, with investors now eyeing the Fed’s Jackson Hole symposium on Friday for clues on the timing of a tapering of monetary stimulus.
The US dollar index rose 0.09% to $92.94 by 17:30(GMT+8).
The Australian dollar, which is sometimes viewed as a barometer of risk appetite, slipped 0.07% to $0.7269, not far from a one-week high of $0.72805 reached the previous day.
Investors have turned more positive on the outlook since the U.S. Food and Drug Administration fully approved the Covid-19 vaccine made by Pfizer and BioNTech on Monday, in a move that could accelerate U.S. inoculations.
Full approval of the Moderna vaccine could follow within weeks, and on Tuesday, Dr. Anthony Fauci, the top U.S. infectious disease expert, said Covid-19 could be under control by early next year.
Overnight, data showed new orders for key U.S.-made capital goods were steady in July, while an acceleration in shipments suggested business investment in equipment could offset an anticipated slowdown in consumer spending and keep the economy on a solid growth path in the third quarter.
Against the euro, the dollar was little changed at $1.1765 on Thursday, after touching a one-week low of $1.1775 the previous day.
It rose 0.05% to 110.06 yen, another safe haven currency, meandering near the center of its trading range since early July.
The focus at Jackson Hole, Wyoming will be Fed Chair Jerome Powell’s speech, which will be parsed for clues on the timing and pace of tapering of monetary stimulus.
Oil rally ends amid COVID-19 concerns
Oil fell on Thursday for the first session this week as renewed concerns about demand amid rising COVID-19 infections cut short a three-day rally, and as production returned in Mexico.
Brent crude oil price was down 0.46%, at $70.59 a barrel and WTI crude oil price fell 0.55%, at $67.53 a barrel by 17:30(GMT+8).
The U.S. Energy Information Administration (EIA) reported that American crude inventories fell last week for a third consecutive week and overall fuel demand increased to the most since March 2020, boosting prices around 10% through Wednesday.
But the demand picture is not entirely bullish.
"For now, U.S. consumers appear to be shrugging off the spread of the Delta variant ... However, it seems likely that we are near the peak in U.S. demand, which will act as a lid on oil prices," Capital Economics said in a note.
Distillate stockpiles, which include diesel and jet fuel, rose last week, gaining 0.6 million barrels to 138.46 million barrels, against expectations for a 0.3 million-barrel drop, according to the EIA data.
The return of output in Mexico, where a fire on Sunday on an offshore platform killed at least five workers and knocked out a bit more than 400,000 barrels per day (bpd) of production, is also pressuring prices.
Pemex had so far recovered 71,000 bpd of production and expects to add an additional 110,000 bpd within a few hours.
More broadly, fresh COVID-19 outbreaks fuelled by the Delta variant of the coronavirus are raising concerns about the strength of the economic recovery globally.
"Although prices had reversed strongly ... questions remain on how the ever-surging number of cases globally will impact fuel demand," said Avtar Sandu, senior manager commodities at Phillip Futures in Singapore.
"In the short-term, the oil market may be volatile with frequent pull-backs," he said.
Oil rally ends amid COVID-19 concerns, returning supply.
Asian-Pacific markets mostly lower on virus concerns
Asian-Pacific stock markets are trading mostly lower on Thursday, ignoring the slightly positive cues overnight from Wall Street, as traders remain spooked amid the continuing spread of the delta variant of the coronavirus in the region and in several countries as well as the strong resurgence of infection rates in the U.S.
Nikkei 225 rose 0.063% to 27,742.29.
South Korea KOSPI fell 0.58% to 3,128.53.
S&P/ASX 200 fell 0.54% to close at 7,491.20.
Taiwan capitalization weighted stock rose 0.12% to 17,066.96.
Hang Seng Index rose 1.08% to 25,415.69.
Focus Tonight
20:30 (GMT+8): United States GDP Growth Rate QoQ 2nd Est (Q2), Forecast: 6.7%, Previous: 6.3%;
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