Gold Falls From Monthly Peak Due To COVID-19 Wave In Asia

Gold fell from a monthly peak

The stock fell for the third day in a row after hitting 5 new all-time highs this month on the MSCI World Index.

The price of Brent crude oil fell to a weekly low and is now more than 5% below its 3-year high in early July. This came after a wave of protests swept across Europe against new restrictions aimed at containing the pandemic.

Gold, valued in dollars, touched $ 1,833, after which it fell $ 10 despite the fact that US Treasuries rose in value, which led to a decrease in the yield on 10-year bonds to 1.32% per annum.

According to the core CPI, consumer price inflation last month peaked in 3 decades at 4.6%.

“These strong numbers are backed by a fairly narrow range of factors,” said central bank governor Jerome Powell, defending the Fed’s zero rate policy and massive quantitative easing from a string of angry comments from Republicans and Democrats.

We do believe, and virtually all forecasters believe, that these phenomena will disappear on their own when the economy reopens. It would be a mistake to act prematurely.

Gold price analysis by Swiss financial group MKS Pamp states that “the market is much less apprehensive about [повышения ставок]… The yield curve and price movement imply there is no tantrum (quite the opposite). “

However, against this background, “physical demand / support has been lowered from” tailwind “to” neutral “, given that the price has risen by $ 50” since the end of June.

gold price in London and premiums / discounts in Shanghai

The price of gold in China rose to a 4-week high of 380 yuan a gram, but a discount to global gold quotes was $ 2.30 an ounce after the average premium was $ 3.60 this month.

Weak Shanghai premium implies rather flat / neutral demand for gold, as opposed to relatively higher demand in June.

[Спрос] in India and Southeast Asia is growing again, [но] only if the international gold price is below $ 1,800 dollars per ounce.

Indonesia becomes Asia’s new COVID-19 epicenter. Due to a shortage of vaccines, 70% of the South Korean population, 85% of the Thai population and 95% of the Vietnamese population expect their first vaccination.

The World Bank said that excluding China, GDP in East Asia and the Pacific will grow by only 4.0% this year. The bank has cut its economic forecasts for the region because it is still far from lifting all restrictions.

Meanwhile, Germany’s Dax stock index lost 0.9%. Spain’s Ibex35 Index also fell sharply as regional governments began re-imposing curfews and restrictions against the wave of the COVID-19 Delta strain.

“Lockdown was absolutely necessary, it saved 450,000 lives,” Spanish Socialist Labor Party secretary general Pedro Sanchez said in response to a court ruling on Wednesday that “detention” at the start of the pandemic was illegal, allowing people fined for violating quarantine regulations, claim a refund.

During the Bastille Day celebrations, a wave of protests swept across Paris against the so-called COVID passports. In the center of Athens, 5,000 people rally against compulsory vaccination.

Posted by Adrian Ash 15 Jul 2021 | Translation: Gold Reserve

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