Gold price slips as traders absorb Biden withdrawal from US election
Spot bullion traded just under $2,400 an ounce, erasing earlier gains.
Asian stocks looked set for a steady open Monday as traders await key Chinese economic data and monitor bond-market volatility triggered by high inflation and the prospect of tighter monetary policy.
Futures for Japan and Hong Kong rose while Australia’s were little changed. Technology shares bolstered the S&P 500 Friday, limiting weekly losses and underlining the stock market’s resilience to price pressures stoked by supply chain and labor disruptions. The dollar moved in tight ranges early in Asia.
Longer-maturity Treasuries fell Friday after a period of pronounced swings reflecting uncertainty about the pandemic recovery, whether inflation will be sticky and the likely speed of interest-rate hikes. Bond-market expectations for the pace of inflation over the coming decade are the highest since 2006.
Monday brings a deluge of economic data in China that is expected to show the nation’s V-shaped economic rebound is fading faster than expected. Consensus is for gains in retail sales, industrial output and fixed-asset investment — including real estate — to have all slowed in October.
Gyrations in sovereign bonds point to the worry that central banks will have to tighten policies more quickly than expected to curb sustained inflation. In contrast, global stocks near record levels signal equity investors are reassured by corporate strength and arguments that price pressures are transitory.
“The risk is that the FOMC will need to raise the Fed funds rate by more than we expect if inflation remains persistently high,” Kim Mundy, a strategist at the Commonwealth Bank of Australia, wrote in a note.
Federal Reserve Bank of Minneapolis President Neel Kashkari said the U.S. central bank shouldn’t overreact to elevated inflation even as it causes pain, because it is likely to prove temporary. Treasury Secretary Janet Yellen said controlling the Covid-19 virus in the U.S. is the key to easing price pressures.
Elsewhere, President Joe Biden will meet virtually with Chinese President Xi Jinping on Monday. Tensions between the two countries have been building over issues including Taiwan and restrictions on sales of U.S. technology to China.
Meanwhile, Elon Musk raised the idea of selling more of his Tesla Inc. shares in online sparring with U.S. Senator Bernie Sanders. Musk offloaded almost $7 billion worth of Tesla stock over the past week, weighing on the shares of the electric vehicle manufacturer.
In commodities, oil prices have notched the longest stretch of weekly losses since March. Senate Majority Leader Charles Schumer urged Biden to tap the U.S. government’s reserves of emergency fuel to help lower gasoline prices.
What to watch this week:
For more market analysis, read our MLIV blog.
(By Andreea Papuc)
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