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Market News 【Market Evening】Bitcoin nearly $52,000, Gold firms near 2-1/2-month high, Oil extends losses

【Market Evening】Bitcoin nearly $52,000, Gold firms near 2-1/2-month high, Oil extends losses

Gold firms near 2-1/2-month high as early Fed taper fears ebb; Dollar near one-month low on bets for later Fed taper; Oil extends losses after deep cuts to Saudi crude prices for Asia.

TOPONE Markets Analyst
2021-09-06
308

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Gold firms near 2-1/2-month high 


Spot gold prices inched up on Monday, hovering close to a 2-1/2-month peak after disappointing U.S. jobs data raised hopes the Federal Reserve could wait a bit longer to pare its stimulus measures.


Spot gold fell 0.18% to $1825.08 per ounce and spot silver fell 0.17% to $24.73 per ounce by 17:30(GMT+8).


Gold is being supported by the notion that the Fed will be slower to taper than previously thought, and a weak U.S. dollar, said IG Market analyst Kyle Rodda.


Labor Department data showed on Friday U.S. nonfarm payrolls increased by 235,000 jobs last month, far below economists’ expectation of 728,000.


Fed Chair Jerome Powell had hinted last month that strong jobs recovery was a pre-requisite for the central bank to start paring back its asset purchases.


Some investors view gold as a hedge against inflation that may follow stimulus measures, while lower interest rates reduce the opportunity cost of holding non-yielding bullion.


After the data all gold could manage was a modest rally that never threatened the major resistance zone lying between $1830.00 and $1834.00, Jeffrey Halley, a senior market analyst, Asia Pacific at OANDA said in a note.


“The price action on Friday reinforces that gold’s upward momentum is waning,” he added.


On the European Central Bank later this week to announce a cut to the pace of its emergency bond purchases from next quarter.


Meanwhile, a government source said that India’s gold imports in August nearly doubled from a year earlier as weaker prices prompted jewellers to ramp up purchases for the festive season.


Dollar near one-month low 


The dollar languished near a one-month low versus major peers on Monday, as investors pushed back expectations for when the Federal Reserve will begin tapering its massive stimulus.


The US dollar index, which measures the currency against six rivals, edged 0.05% higher to 92.155, after dipping to 91.941 for the first time since Aug. 4 on Friday, when a closely watched U.S. labor report came out much weaker than expected.


The euro was flat at $1.18775 after matching the highest level since June 29 at $1.1909 at the end of last week. The single currency has been supported by expectations the European Central Bank, which meets Thursday, is close to tapering its own stimulus program.


The greenback edged 0.1% higher to 109.79 yen, still meandering in the middle of its trading range of the past two months.


Commonwealth Bank of Australia pushed back expectations for a start to tapering to December from October following the jobs miss.


“The U.S.’s deteriorating Covid situation will weigh on the USD because the situation is better elsewhere in the major economies,” CBA strategists wrote in a client note.


Australia’s dollar weakened 0.17% to $0.7435, but remained close to its highest since July 15 of $0.74775, touched in the previous session. The Reserve Bank of Australia decides policy on Tuesday.


National Australia Bank predicts the central bank will reduce asset purchases again at the meeting, “although the optics of tapering amid protracted lockdowns means it is likely to be a close decision,” NAB analyst Tapas Strickland wrote in a report.


Oil extends losses 


Crude oil prices extended losses on Monday after the world’s top exporter Saudi Arabia slashed crude prices for Asia over the weekend, signaling that global markets are well supplied.


Brent crude oil price fell 0.76% to $71.82 a barrel while U.S. West Texas Intermediate crude oil price was at $68.57 a barrel, down 0.75% by 17:30(GMT+8).


State oil giant Saudi Aramco notified customers in a statement on Sunday that it will cut October prices for all crude grades sold to Asia, its biggest buying region, by at least $1 a barrel. The price cuts were larger than expected, according to a Reuters poll among Asian refiners.


The decline in crude oil futures added to falls on Friday after a weaker than expected U.S. jobs report indicated a patchy economic recovery that could mean slower fuel demand during a resurgent pandemic.


Losses were capped by concerns that U.S. oil supply would remain limited in the wake of Hurricane Ida.


The U.S. government is releasing crude from strategic petroleum reserves as production in the U.S. Gulf Coast struggled to recover. Some 1.7 million barrels of oil and 1.99 billion cubic feet natural gas output remained offline, government data released on Friday showed, while power shortages are preventing some refineries from resuming operations.


The hurricane also led U.S. energy firms to cut last week the number of oil and natural gas rigs operating for the first time in five weeks, data from Baker Hughes showed on Friday. The oil rig count alone fell the most since June 2020.


Asian stock markets rise after weak US hiring data

Asian-Pacific stock markets rose Monday after weak U.S. hiring in August fueled expectations the Federal Reserve might postpone withdrawal of economic stimulus that has boosted stock prices.


Nikkei 225 rose 1.83% to 29,659.89.

South Korea KOSPI rose 0.071% to 3,203.33.

S&P/ASX 200 rose 0.074% to close at 7,528.50.

Taiwan capitalization weighted stock fell 0.12% to 17,495.30.

Hang Seng Index rose 1.01% to 26,163.63.


Bitcoin nearly $52,000


Bitcoin has been on a strong run of late, surging to almost $52,000 Monday to touch the highest level since May.


Bitcoin price today rose 2.39% to $51714.0 by 17:50(GMT+8).



A growing movement on social media is calling for people to buy small amounts of Bitcoin in support of El Salvador’s plan to make the token legal tender.


Users on platforms including Twitter and Reddit are discussing plans to buy $30 worth of Bitcoin en masse on Sept. 7 to mark El Salvador’s Bitcoin law coming into effect. The potential coordinated price pump echoes previous online campaigns targeting meme stocks like GameStop Corp. 

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