Gold scales 3-month peak on softer dollar, hopes of smaller Fed hikes

Nov 15 (Reuters) – Gold prices rose to a three-month high on Tuesday, supported by a weaker dollar amid hopes that the Federal Reserve would adopt a less aggressive approach on rate hikes going forward.

Spot gold was up 0.5% at USD 1,779.94 per ounce, as of 0745 GMT, hitting its highest since Aug. 17. US gold futures gained 0.4% to USD 1,783.50 per ounce.

“Gold has had a very strong run from USD 1,618 per ounce and is now due for some consolidation in the short term. However, the overall dominant risk remains very much to the upside,” said Clifford Bennett, chief economist at ACY Securities.

“The catalyst for the recent strong rally was partially the correction of the US dollar.”

The dollar slipped 0.6% to a three-month low against its rivals, making gold more appealing for other currency holders.

The Fed will likely soon slow its interest rate hikes, Fed Vice Chair Lael Brainard signalled on Monday while emphasising the central bank still had more work to do.

Gold prices have risen more than USD 160 since falling to a one-month low earlier this month, as data showing an uptick in the US unemployment rate in October and signs of cooling inflation led to Fed slowdown optimism, triggering a sharp drop in the dollar.

Traders now see an 89% probability of a 50-basis-point increase at the US central bank’s December meeting, with only an 11% likelihood of a 75-basis-point rise.

While gold is considered a hedge against inflation, rising interest rates tend to dull bullion’s appeal as the metal pays no interest.

Speculators cut net short positions by 30,659 contracts to 8,219 in COMEX gold in the week to Nov. 8, the US Commodity Futures Trading Commission said.

Elsewhere, spot silver rose 1% to USD 22.19 per ounce, its highest since early June.

Platinum gained 1.4% to USD 1,031.63, while palladium climbed 1% to USD 2,046.34.

(Reporting by Brijesh Patel in Bengaluru; Editing by Subhranshu Sahu and Rashmi Aich)

Philippines cash remittances up 3.8% in September

MANILA, Nov 15 (Reuters) – Cash remittances rose 3.8% to USD 2.84 billion in September from a year ago, the Philippine central bank said on Tuesday.

In January to September, cash remittances through banks increased 3.1% to USD 23.12 billion, driven by millions of Filipinos living and working overseas.

(Reporting by Neil Jerome Morales; Editing by Ed Davies)

Oil prices slip on OPEC cut in demand forecast, China COVID cases

SINGAPORE, Nov 15 (Reuters) – Oil prices extended losses in early Asian trade on Tuesday after OPEC cut its 2022 global demand forecast, while rising COVID-19 case numbers in China clouded the outlook for fuel consumption in the world’s top crude importing nation.

Brent crude futures fell 39 cents, or 0.4%, to $92.75 a barrel by 0133 GMT after settling down 3% on Monday. US West Texas Intermediate crude was at $85.31 a barrel, down 56 cents, or 0.7%, after tumbling 3.5% in the previous session.

The Organization of the Petroleum Exporting Countries (OPEC) cut its 2022 global oil demand growth forecast for a fifth time since April, citing mounting economic challenges including high inflation and rising interest rates.

This comes after the International Monetary Fund said on Sunday that the global economic outlook has become gloomier than projected last month, citing a steady worsening in purchasing manager surveys in recent months

Meanwhile, though investors cheered China’s announcements last week that it would lessen the impact of a strict zero-COVID policy to spur economic activity and energy demand, ANZ analysts said surging case numbers continue to be a key downside risk.

“The market is currently defying looming supply risks, despite expectations that the latest demand downgrade could be supply-negative for OPEC oil output,” the analysts said, referring to imminent European Union sanctions on Russian oil exports.

Elsewhere, oil output in the Permian Basin is set to hit another record of 5.499 million barrels per day (bpd) in December, the US Energy Information Administration (EIA) said in its monthly productivity report on Monday.

However, aging shale regions are showing weaker per-well output, causing overall US crude oil production in shale regions to rise by a mere 91,000 bpd to 9.191 million bpd in December, despite a surge in prices, the EIA said.

(Reporting by Florence Tan; Editing by Kenneth Maxwell)

Dollar rebounds as Fed officials say hikes to continue; yen slumps

TOKYO, Nov 15 (Reuters) – The U.S. dollar climbed versus the yen and stayed firm against other major peers on Tuesday as more Federal Reserve officials made the case for even tighter U.S. monetary policy.

The greenback edged up against sterling and hovered more than 1% above its two-month trough to the euro after Fed Vice Chair Lael Brainard on Monday echoed weekend comments by Fed Governor Christopher Waller that interest rates need to keep rising to battle inflation, although potentially at a slower pace.

The dollar index, which measures the currency against six counterparts including the yen, euro and sterling, edged 0.03% higher to 107.00 early in the Asian day. The index held onto gains made on Monday when it rebounded from a three-month low of 106.27 hit on Friday.

The index tumbled 3.9% last week, its worst performance since March 2020, after U.S. consumer prices rose less than expected, stoking speculation a peak in rates might be close.

Money markets are currently pricing in an 89% probability that the Federal Open Market Committee (FOMC) will slow the pace of hikes to a half point at its next meeting on Dec. 14, against 11% odds for another 75 basis point increase.

“Fed speaker(s) have set the tone, reminding markets that there is still a lot of work to be done to bring inflation to heal,” National Australia Bank senior FX strategist Rodrigo Catril wrote in a note to clients.

“The USD is broadly stronger with last week’s outperformers – GBP and JPY – leading the declines.”

The dollar gained 0.34% to 140.40 yen JPY, adding to its 0.84% overnight rebound from a 2 1/2-month low of 138.46. It dropped 5.39% last week, the most in 14 years.

Sterling GBP=D3 declined 0.08% to $1.1750, slipping further from a 2 1/2-month top at $1.1855 from Friday.

The euro EUR=EBS was little changed at $1.03215 following its retreat from a three-month high of $1.0364.

The risk-sensitive Australian dollar AUD eased 0.13% to $0.66935, but stayed relatively close to Monday’s nearly two-month peak of $0.6720, buoyed by key trading partner China’s moves to ease COVID-19 restrictions and support the property market.

There was little reaction in the currency from minutes of the Reserve Bank of Australia’s latest meeting, which showed policymakers considered a 50 bps hike before opting for another 25 bps bump.

“The Aussie has made some progress on cross rates so far this week, with help from China,” said Sean Callow, a senior currency strategist at Westpac, adding there is the potential for a rise to $0.6775 in coming days.

“However global equities are still skittish, limiting Aussie upside.”

The offshore Chinese yuan CNH was little changed at 7.0461 per dollar, after hitting a more than five-week high of 7.0200 in the previous session.

(Reporting by Kevin Buckland; Editing by Ana Nicolaci da Costa)

Wall Street ends lower as investors gauge Fed’s policy path

Nov 14 (Reuters) – Wall Street’s main indexes ended lower on Monday, with real estate and discretionary sectors leading broad declines, as investors digested comments from US Federal Reserve officials about plans for interest rate hikes and looked for next catalysts after last week’s big stock market rally.

Losses accelerated toward the end of the up-and-down session, with focus turning to Tuesday’s producer price index report and markets highly sensitive to inflation data.

Earlier on Monday, Fed Vice Chair Lael Brainard signaled that the central bank would will likely soon slow its interest rates hikes. Her comments somewhat buoyed sentiment for equities that had been dampened after Federal Reserve Gov. Christopher Waller on Sunday said the Fed may consider slowing the pace of increases at its next meeting but that should not be seen as a “softening” in its commitment to lower inflation.

A massive equity rally late last week was set off by a softer-than-expected inflation report that boosted investor hopes the Fed could dial back on its monetary tightening that has punished markets this year.

“There is still a sensitivity to Fed speak… One was a little hawkish, one was a little dovish,” said Eric Kuby, chief investment officer at North Star Investment Management Corp.

The Dow Jones Industrial Average fell 211.16 points, or 0.63%, to 33,536.7, the S&P 500 lost 35.68 points, or 0.89%, to 3,957.25 and the Nasdaq Composite dropped 127.11 points, or 1.12%, to 11,196.22.

The S&P 500 last week posted its biggest weekly percentage gain since late June, while the tech-heavy Nasdaq notched its best week since March.

More Fed officials are due to speak later this week along with a slew of data, including on retail sales and housing, and earnings reports from major retailers.

“It just makes sense the market wants to pause and really both try to make sense of the trajectory (of Fed policy) and what the next drivers are going to be,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management.

Among S&P 500 sectors, real estate fell 2.7%, consumer discretionary dropped 1.7% and financials declined 1.5%.

In company news, Amazon shares fell 2.3% as The New York Times on Monday reported the company was planning to lay off about 10,000 people in corporate and technology jobs starting as soon as this week.

Shares of Biogen Inc and Eli Lilly gained 3.3% and 1.3%, respectively, after the failure of Swiss rival Roche’s Alzheimer’s disease drug candidate.

Declining issues outnumbered advancing ones on the NYSE by a 2.23-to-1 ratio; on Nasdaq, a 1.61-to-1 ratio favored decliners.

The S&P 500 posted 15 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 72 new highs and 74 new lows.

About 11.5 billion shares changed hands in US exchanges, compared with the 12.1 billion daily average over the last 20 sessions.

(Reporting by Lewis Krauskopf in New York, Shubham Batra, Bansari Mayur Kamdar, Ankika Biswas and Amruta Khandekar in Bengaluru; Editing by Shounak Dasgupta, Vinay Dwivedi and Aurora Ellis)

Gold steadies as bargain hunters see off dollar’s advance

Nov 14 (Reuters) – Gold steadied on Monday as bargain hunting offset pressure from the dollar’s advance following the US Federal Reserve’s signs that it was not softening its fight against inflation.

Spot gold rose 0.1% to USD 1,772.94 per ounce by 01:32 p.m. ET (1832 GMT) after falling 1% earlier in the day.

US gold futures settled up 0.4% at USD 1,776.9.

The gains in the dollar and US yields were weighing on gold, said Jim Wyckoff, senior analyst at Kitco Metals, adding that bargain hunting by bulls emboldened by previous week’s gains could have helped gold’s slight recovery.

Gold prices could go sideways to higher in the near term, Wyckoff added.

The dollar index rose 0.4%, while 10-year Treasury yields also gained, making gold more expensive for overseas buyers.

“Gold appears to have strong resistance with the USD 1,800 level, with decent support at the USD 1,750 region,” Edward Moya, senior analyst with OANDA, said in a note.

Bullion reported its best weekly gain since March 2020 last week on hopes of slower rate hikes after data showed price pressure cooling in the United States.

Fed Vice Chair Lael Brainard on Monday joined Governor Christopher Waller, to indicate the Fed is ready to begin moving in smaller rate hike increments, while still emphasizing what Brainard called the central bank’s “resolve” to keep pushing rates higher as needed to battle a surge of inflation.

While gold is considered a hedge against inflation, rising rates tend to dull bullion’s appeal as it pays no interest.

Fed funds futures traders see an 89% probability of a 50 basis point increase at the central bank’s December meeting, with only an 11% likelihood of a 75 basis point rise.

Spot silver jumped 1.5% to USD 22 per ounce and reached its highest since June 9. Platinum fell 0.3% to USD 1,026, off its highest since mid-March reached in the last session.

Palladium was steady at USD 2,040.64 per ounce.

(Reporting by Seher Dareen in Bengaluru; additional reporting by Rahul Paswan; Editing by Sandra Maler, Shounak Dasgupta and Shailesh Kuber)

Europe’s STOXX 600 ekes out gains in a start to data-heavy week; Roche slides

Nov 14 (Reuters) – European shares closed higher on Monday driven by positive updates from companies including Germany’s Infineon and Britain’s Informa, while investors positioned themselves for a slew of data including inflation and flash GDP due this week.

The pan-European STOXX 600 index rose 0.1%, hovering near 11-week highs.

Informa Plc (INF) jumped 5.8% after the events organiser raised its full-year earnings outlook, helping London’s blue-chip FTSE 100 index outperform its regional peers with a 0.9% rise.

Germany’s DAX gained 0.6%. Shares of Infineon IFXGn.DE climbed 7.8% to top the index after the chipmaker raised its long-term financial targets and said it is planning a new 5 billion-euro (USD 5.16 billion) factory in Dresden to expand its 300-millimeter production capacities.

The broader technology sector rose 1.2%, the most among the STOXX 600 sectors.

Meanwhile, data showed Eurozone industrial output increased more than expected in September, while August production was also revised higher.

“Strong euro zone industrial output data eased concerns about the growing threat of recession,” said Victoria Scholar, head of investment at Interactive Investor.

Although caution prevailed in markets after Federal Reserve policymaker Christopher Waller warned that the US central bank would not “soften” its fight against inflation.

“The Fed is trying to communicate to markets that it isn’t going to pivot and is going to continue with this two-way sort of communication of slowing the pace of rate hikes but that doesn’t necessarily mean it will get to a lower endpoint,” said Giles Coghlan, chief market analyst at HYCM in London.

European shares recorded their biggest weekly gain in nearly eight months on Friday largely driven by bets of smaller rate hikes by the Fed and easing COVID-19 curbs in China.

Still, the STOXX 600 is down 11.3% so far this year amid worries about a gloomy economic picture.

UK employment, inflation and retail sales data are on tap later this week, while the Eurozone flash third-quarter GDP estimate and October HICP inflation data among others are also scheduled.

Among other stocks, Roche Holding AG ROG.S slid 4% to weigh the most on the STOXX 600 after its Alzheimer’s drug candidate could not be shown to markedly slow dementia progression in two drug trials.

Rheinmetall (RHMG) climbed 6.7% after the military equipment manufacturer agreed to buy Spanish explosives and ammunition maker Expal Systems for an enterprise value of 1.2 billion euros (USD 1.24 billion).

Teleperformance (TEPRF) added 6.7% after the French office support technology company said it would meet with the Colombian government after Colombia opened a probe into the firm regarding its work practices in the country.

(Reporting by Shreyashi Sanyal and Devik Jain in Bengaluru; Editing by Subhranshu Sahu and Richard Chang)

China seen leaving medium-term policy rate unchanged

SHANGHAI, Nov 14 (Reuters) – China’s central bank is likely to fully roll over maturing medium-term policy loans while keeping the borrowing cost unchanged for the third straight month this week, a Reuters survey showed.

Worsening COVID-19 outbreaks across the country in recent weeks and weak demand from both home and abroad have weighed on the world’s second largest economy, with a slew of recent economic data pointing to a further loss of momentum.

Meanwhile, global tightening was yet to see a clear sign of pivot, limiting Beijing’s room to manoeuvre its monetary easing.

In a poll of 31 market watchers this week, all participants predicted that the People’s Bank of China (PBOC) would keep the interest rate on the one-year medium-term lending facility (MLF) unchanged at 2.75% on Tuesday.

Among them, 22 respondents anticipated the PBOC to fully roll over 1 trillion yuan (USD 142 billion) worth of such loans due to expire on the same day.

In the remaining nine traders and analysts, five expected a partial rollover, while the other four believed that the central bank would inject additional fresh funds to support the slowing economy.

“We expect a full or near-full rollover to support liquidity while the chance for a reduction in the reserve requirement ratio (RRR) to replace part of the facility appears slim as policy measures are targeted,” said Frances Cheung, rates strategist at OCBC Bank.

The heavy MLF loan maturity of 1 trillion yuan, the biggest this year, prompted some market debates whether the PBOC would cut the amount of cash banks must set aside as reserves to make up the liquidity shortfall, but some traders said a RRR reduction would be too strong a policy easing signal.

China, along with Japan, has been a major outlier in the global tightening spree with Beijing focused on stimulating its COVID-hit economy. But investors have been worried that the widening monetary divergence could trigger capital outflows and yuan depreciation.

China’s decision to lower the MLF rate in August widened the yield differentials against the United States and accelerated yuan’s declines.

China’s central bank “is walking a fine line between stimulus and financial instability as too much credit-fueled activity was the ultimate source of the current property market slump,” said Win Thin, global head of currency strategy at Brown Brothers Harriman.

Official data showed that new bank lending in China tumbled more than expected in October from the previous month while broad credit growth slowed, as COVID-19 outbreaks and a property sector downturn weighed on credit demand.

(USD 1 = 7.0414 Chinese yuan)

(Reporting by Li Hongwei and Brenda Goh, Writing by Winni Zhou and Angus MacSwan)

Oil settles USD 3 lower on China COVID surge and firmer dollar

Nov 14 (Reuters) – Oil prices settled around USD 3 lower on Monday, dragged down by a firmer US dollar while surging coronavirus cases in China dashed hopes of a swift reopening of the economy for the world’s biggest crude importer.

Brent crude futures settled down USD 2.85, or 3%, at USD 93.14 a barrel after gaining 1.1% on Friday. WTI crude futures settled down USD 3.09, or 3.47%, to USD 85.87 after advancing 2.9% on Friday.

On Friday, commodities prices rallied after China’s National Health Commission adjusted its COVID prevention and control measures to shorten quarantine times for close contacts of cases and inbound travellers.

But COVID-19 cases climbed in China over the weekend, with Beijing and other big cities on Monday reporting record infections.

“The surge in COVID cases will only lead to more lockdowns in the near term…for now China is not a source of bullish support for the petroleum complex,” said John Kilduff, partner at Again Capital LLC in New York.

The US dollar also rose against the euro and yen, as investors braced for potential US Federal Reserve interest rates hikes after a policymaker said too much was being made of last week’s cooler US inflation data.

A stronger dollar makes dollar-denominated commodities more expensive for holders of other currencies and tends to weigh on oil and other risk assets.

The Organization of the Petroleum Exporting Countries (OPEC), meanwhile, cut its forecast for global oil demand growth this year and next, citing economic headwinds.

US domestic supply also continues to rise. Oil output in the Permian in Texas and New Mexico, the biggest US shale oil basin, is due to rise by about 39,000 barrels per day (bpd) to a record 5.499 million bpd in December, the US Energy Information Administration (EIA) said in its productivity report on Monday.

Separately, US Treasury Secretary Janet Yellen on Friday said India can continue buying as much Russian oil as it wants, including at prices above a G7-imposed price cap mechanism, if it steers clear of Western insurance, finance and maritime services bound by the cap.

(Reporting by Laura Sanicola; Additional reporting by Noah Browning, Florence Tan and Emily Chow; Editing by David Goodman, Andrea Ricci and David Gregorio)

Gold eases off 3-month peak as Fed warning buoys dollar, yields

Nov 14 (Reuters) – Gold prices retreated on Monday from a three-month peak hit in the previous session, as the dollar and Treasury yields edged higher after a top US central banker warned that the Federal Reserve was not softening its fight against inflation.

Spot gold fell 0.6% to USD 1,760.72 per ounce by 0712 GMT, after hitting its highest since Aug. 18 on Friday. US gold futures eased 0.3% to USD 1,763.80.

Gold prices posted their biggest weekly gain since March 2020 last week, after signs of cooling U.S. inflation lifted hopes that the Fed could be less hawkish on rate hikes.

“Gold is lower in reaction to Fed’s Waller pushing back on market reaction to the weakness in CPI as just one data point does not suggest inflation has been tamed,” said Stephen Innes, managing partner, SPI Asset Management.

“Volatility is here to stay as make no mistake inflation remains at the fulcrum.”

Fed Governor Christopher Waller said on Sunday the Fed might consider slowing the pace of rate increases at its next meeting but that should not be seen as a “softening” of its battle against inflation.

US consumer sentiment fell in November, pulled down by persistent worries about inflation and higher borrowing costs, a survey showed on Friday.

Fed fund futures are now pricing in an 91% chance of a 50-basis point rate hike at the Fed’s December meeting.

Gold is highly sensitive to rising US interest rates, as these increase the opportunity cost of holding non-yielding bullion.

The dollar index rose 0.5% after falling to its lowest in nearly three months on Friday, making gold more expensive for other currency holders. Benchmark US 10-year Treasury yields edged up from a one-month low.

Elsewhere, spot silver dropped 1.3% to USD 21.40 per ounce, platinum fell 1% to USD 1,018.50, and palladium slipped 1.3% to USD 2,013.76.

(Reporting by Brijesh Patel in Bengaluru; Editing by Rashmi Aich and Subhranshu Sahu)

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