【Market Evening】Oil approaches $84, Gold down, but remains near two-month high
Gold down, but remains near two-month high, as dollar softens; Asia stocks slip after Wall Street hits another record; Oil approaches $84 as lifting of U.S. travel ban boosts demand.

Gold down, but remains near two-month high, as dollar softens
Gold was down on Tuesday morning in Asia, but remained near a two-month high hit during the previous session. A softer dollar, alongside key central banks insisting that inflation will be temporary and that interest rate hikes are not immediately required, capped the yellow metal’s losses.
Spot gold price rose 0.08% to $1825.32 per ounce and spot silver fell 0.06% to $24.39 per ounce by 17:30(GMT+8).
The benchmark U.S. 10-year yield was little changed at 1.4862% after climbing 4 basis points in the previous session.
U.S. Federal Reserve officials continued a debate on the job market’s recovery, and how much longer the central bank can tolerate high inflation.
Chicago Fed Bank President Charles Evans admitted on Monday that he is slightly more nervous about inflation remaining high than previously, but still expects the Fed will not need to hike interest rates until 2023. His colleague, Fed Bank of San Francisco President Mary Daly, will speak later in the day.
On the supply side, Russia produced 256.54 tons of gold between January and September, up from 253.77 tons it produced in the same period in 2020, according to its finance ministry.
In the United Arab Emirates, gold refineries will be reportedly required to undergo annual audits to ensure their suppliers are responsible, in the country's effort to combat illicit trading.
Dollar edges lower; PPI data in focus
The dollar edged lower in early European trade Tuesday, drifting ahead of the release this week of key U.S. inflation data to guide the Federal Reserve’s interest rates outlook.
US dollar Index, which tracks the greenback against a basket of six other currencies, traded 0.1% lower at 93.938, retreating further from Friday’s high of 94.645, it’s highest level for over a year.
EUR/USD gained 0.1% to 1.1597, USD/JPY fell 0.4% to 112.82, GBP/USD gained 0.1% to 1.3568, and the risk sensitive AUD/USD was largely flat at 0.7420.
The Federal Reserve’s insistence that it would be "patient" in deciding when to raise rates at its recent policy-setting meeting has caused the dollar to drift lower, even in the wake of Friday’s strong payrolls release.
That’s because Fed funds futures have pushed back the likely date for rates lift-off from around July next year to September or October.
However, this is before the release of the latest U.S. inflation data, starting with factory gate prices later Tuesday, which are expected to show inflation remaining very much a factor in the central bank’s thinking.
We still see it as likely that inflation will climb further into the year-end,” said analysts at Nordea, in a note. “Apartment List’s rent data for recent movers continued to soar in October and is now at 15.8% y/y, indicating plenty of upside risks to the CPI over the coming six months. Used car prices have started to rise again, and we could see a jump in hotel prices plus airline fares if Covid-19 delta cases continue to subside into Christmas.”
As well as this inflation data, a number of central bankers are due to speak later on Tuesday, including European Central Bank President Christine Lagarde and Fed Chairman Jerome Powell.
Elsewhere, USD/TRY rose 0.5% to 9.7250 after Turkey’s central bank cut the amount of gold banks are allowed to hold as part of their lira reserve requirements, effectively increasing the amount of local currency lenders need to deposit at the central bank.
Oil approaches $84 as lifting of U.S. travel ban boosts demand
Crude oil price rose towards $84 a barrel on Tuesday, gaining for a third session, as the U.S. lifting of travel restrictions and more signs of a global post-pandemic recovery lifted the demand outlook, while supply remained tight.
On Monday, travellers took off for the United States again, while the passing of U.S. President Joe Biden's infrastructure bill and better-than-expected Chinese exports helped paint a picture of a recovering global economy.
Brent crude oil rose or 0.6%, to $83.93 a barrel, while U.S. West Texas Intermediate (WTI) crude rose 0.5%, to $82.34 by17:30(GMT+8).
"With the re-opening of U.S. borders for vaccinated travellers, jet fuel demand ought to receive a healthy ... boost," said Tamas Varga of oil broker PVM.
"The passage of the $1 trillion U.S. infrastructure bill in Congress is also expected to provide additional help."
The price of Brent has risen over 60% this year and hit $86.70, a three-year high, on Oct. 25, supported by supply restraint by the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, and recovering demand.
At a meeting last week, OPEC+ decided to stick to its existing pace of easing of record output cuts and rebuff U.S. pleas to pump more - helping to keep supply tight for the near term in the view of some analysts.
JPMorgan Chase (NYSE:JPM) said global oil demand November was already nearly back to pre-pandemic levels of 100 million barrels per day (bpd), following last year's collapse.
Biden, however, may take measures as early as this week to address soaring gasoline prices, U.S. Energy Secretary Jennifer Granholm said on Monday.
Despite a tight global market, U.S. crude oil inventories are expected to have risen for a third straight week, possibly helping to cap further gains in prices.
Asia stocks slip after Wall Street hits another record
Asian stock markets fell Tuesday after Wall Street rose to a record for an eighth day.
Tokyo, Hong Kong and Seoul declined while Shanghai advanced.
Nikkei 225 fell 0.75% to 29,285.46.
Hang Seng Index rose 0.20% to 24,813.13.
Taiwan capitalization weighted stock rose 0.72% to 17,541.36.
S&P/ASX 200 fell 0.24% to 7,434.20.
South Korea KOSPI rose 0.076% to 2,962.46.
Wall Street’s benchmark S&P 500 index added 0.1% on Monday, boosted by gains for construction-related stocks after Congress last week approved a $1 trillion infrastructure bill.
Also Monday, the deputy chairman of the Federal Reserve, Richard Clarida, said conditions to raise interest rates might not be met until late next year. Traders worry a spike in inflation might prompt central banks to withdraw stimulus that helped to boost stock prices.
“Investors will be on the lookout for any clues that signal an adjustment to central banks’ taper process and rate hikes expectations,” Anderson Alves of ActivTrades said in a report.
Also Tuesday, Japan’s government reported wage growth fell to a three-month lost of 0.2% over a year earlier in September.
Bonus rebate to help investors grow in the trading world!