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Topic Summary

Posted by: Dimberry
« on: September 10, 2021, 06:38:17 AM »

Gold futures prices rose. Benefit of weakening dollar

Gold futures prices rose today. This was driven by the depreciation of the dollar. ahead of the Federal Reserve's (Fed) monetary policy meeting this month.

Gold contract on COMEX (Commodity Exchange) for delivery in Dec. plus $0.8, or 0.04%, to $1,794.30/ounce.

A weaker dollar will increase the attractiveness of gold. by making gold contracts cheaper for holders of other currencies

Investors are keeping an eye on the Federal Reserve's (Fed) monetary policy meeting on Sept. 21-22, with the August non-farm payroll numbers expected to be one of the factors the Fed's board uses. Consider whether to start announcing a reduction in the amount of the quantitative easing (QE) bond purchase program

The US Department of Labor reported on Friday that Non-farm payrolls rose just 235,000 in August. That was lower than analysts' estimates of 720,000 jobs after rising 1,053,000 in July.

The unemployment rate dropped to 5.2 percent in August, in line with analysts' expectations. after hitting 5.4% in July.

The European Central Bank (ECB) has signaled a cut in its Pandemic Emergency Purchase Program (PEPP) program at its meeting today.

"Based on the assessment of the financial condition and inflation outlook The ECB's policy-making committee is of the opinion that the ECB is able to maintain favorable financial conditions by reducing its bond purchase limit in the PEPP scheme compared to the past two quarters, and the ECB is ready to adjust its instruments every step of the way. "We do our best to ensure inflation stabilizes at 2%, which is the ECB's medium-term target," the ECB said in a statement, without announcing any clear cuts in the project.

The ECB's PEPP program is the equivalent of the Federal Reserve's quantitative easing (QE) bond-buying program.

However, ECB Chairman Christine Lagarde insisted that the signing of a cut in PEPP does not mean the ECB is withdrawing its stimulus measures it has taken since the outbreak of the coronavirus.

"What we have done today This is to adjust our bond buying level to achieve our goal of favorable financial conditions. And we haven't discussed what we're going to do next,” Ms Lagarde said.

The PEPP project has a total credit line of 1.85 trillion euros. In the past two quarters, the ECB has purchased 80 billion euros of bonds under the program per month.

Analysts polled expect the ECB to cut its PEPP bond purchases to just 60 billion euros per month. before reducing the limit again in early 2022 and the project will be terminated in March 2022

Meanwhile, the ECB decided to maintain the policy rate at its meeting today. It kept the refinancing rate at 0%, a record low. and kept the deposit interest rate held by commercial banks with the ECB at -0.50% while keeping the loan interest rate at 0.25%.

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