Spot gold and silver rallied on Monday as 10-year U.S. bond yields retreated and U.S. indices weakened. Spot gold stood at the $1,790 mark early in the U.S. session for the first time since April 23.
22:00 U.S. April ISM manufacturing PMI data released after the 10-year U.S. bond yields below 1.6%, the U.S. index below the 91 mark, silver continued to pull up to expand to 4%, spot gold approaching $ 1795. COMEX most active gold futures contract 22:00 Beijing time on May 3 within a minute of buying and selling plate instantly traded 2,232 lots, trading contracts worth a total of 400 USD 400 million.
The newly released US ISM manufacturing PMI data for April fell short of expectations, recording only 60.7, compared to 64.7 and 65 for the previous and expected values, respectively. financial website Forexlive noted that the current shortage of electronics and semiconductors has had a huge impact on lead times and prices. In addition, prices appear to be generally higher for most supply lines.
Oil prices were also supported by lower U.S. indices, with WTI crude futures extending their gains to 1% at $64.21 per barrel, after falling more than 1% at one point.
The Dow opened up more than 170 points, most of the U.S. anti-epidemic concept stocks, popular Chinese stocks rose. BioNTech SE rose more than 8%, Moderna rose more than 4%, Pfizer rose more than 1%, Gilead Sciences, AstraZeneca rose nearly 1%. The Indian epidemic remains a concern.
The market is currently very concerned about the timing of the Federal Reserve’s policy turn. According to the latest speeches of Powell and Yellen, the Fed may not yet withdraw from the easing policy in the near future, which gives some support to gold prices.
U.S. Treasury Secretary Yellen said over the weekend that the U.S. fiscal environment is good, interest rates will probably remain low, believe that inflation will not be a problem, if the problem does exist, the United States will have the tools to solve the problem. Powell also previously argued that “price pressures are only temporary”.
It is important to note that on the other side, the discussion on the Fed’s misjudgment of inflation is also very lively, and many analyses have pointed out that it may be too late to wait for the Fed to react. Warren Buffett, the stock god, also said over the weekend that he sees serious inflation.
“We’re raising prices, and others are raising prices. And it’s catching on. We do a lot of real estate business, and costs keep going up, up, up. The cost of steel is going up every day.”
Former U.S. Treasury Secretary Summers also said growing evidence of labor shortages and that “workers are quitting at a rate that is normally reserved for boom times,” making him concerned about inflation.
The U.S. non-farm payrolls report will be released this Friday, and after adding 916,000 jobs in March, economists predict that the number of new jobs could reach 1 million in April. If this non-farm payrolls report is very hot, the market may advance the expected time for the Fed to taper its bond purchases.
Also of great interest is the payrolls data, as Bart Melek, head of global strategy at TD Securities, told Kitco News.
“Payrolls data is very important. Generally speaking, any unexpected rise will push up inflation expectations. That could depress real interest rates, which would be a good catalyst for gold.”
Chris Williamson, chief business economist at market researcher IHS MARKIT, noted that the latest data showed that in April, the U.S. manufacturing sector saw its biggest boom in at least 14 years. Demand surged at a rate not seen in 11 years as hopes for recovery grew and new stimulus measures were introduced.
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