June 27, 2022: Gold prices gained on Monday, as news of some Western nations planning to officially ban imports of the metal from Russia for its invasion of Ukraine sparked some interest in bullion.
Spot gold rose 0.5% to $1,835.58 per ounce by 0231 GMT. U.S. gold futures were up 0.3% at $1,836.30.
"The G7 import ban on Russian gold seems to be providing some short-term support in early Asia (trading)," OANDA senior analyst Jeffrey Halley said.
"However, it is mostly a rubber stamp exercise in reality for the grouping, and I do not expect this to mark a structural change in the supply/demand outlook that will underpin prices."
Four of the Group of Seven (G7) rich nations moved to ban imports of Russian gold on Sunday to tighten the sanction squeeze on Moscow and cut off its means of financing the invasion of Ukraine.
"The headline will be quickly digested, and the market should go back to its tug of war between higher front-end rates, negative for gold and recession odds meaning sooner rate cuts, positive for gold," said Stephen Innes, managing partner at SPI Asset Management.
A pair of U.S. central bankers said on Friday they supported further sharp rate hikes to stem rapid price rises, even as investors cheered economic data showing inflation expectations to be less worrisome than initially feared.
Gold is seen as a hedge against inflation, but higher interest rates raise the opportunity cost of holding bullion, which yields no interest.
"Overall, gold remains mired in the middle of the $1,780-$1,880 range that's been in place since early May, and we will need a large directional move by the U.S. dollar to change that dynamic," Halley said.
Spot silver rose 1.2% to $21.36 per ounce, platinum gained 0.5% to $912.00 and palladium climbed 0.6% to $1,886.65.
June 27, 2022: Oil prices slipped more than $1 a barrel on Monday as global economic concerns depressed the oil demand outlook while investors eyed the G7 meeting this week for possible moves on Russian oil exports and a revival of Iran nuclear deal.
Brent crude futures slipped $1.42, or 1.3%, to $111.70 a barrel by 0010 GMT after rebounding 2.8% on Friday. U.S. West Texas Intermediate crude was at $106.08 a barrel, down $1.54, or 1.4%, following a 3.2% gain in the previous session.
Both contracts posted their second weekly decline last week as interest rate hikes in key economies strengthened the dollar and fanned recession fear. However, oil prices remained well supported above $100 a barrel as crude and oil product supplies remained tight after Western sanctions kept Russian oil out of reach for some buyers.
Leaders of the Group of Seven (G7) rich nations are expected to discuss this week's options for tackling rising energy prices and replacing Russian oil and gas imports, as well as further sanctions that do not exacerbate inflation.
These measures include a possible price cap on Russian crude and oil product exports aimed at curbing Russia's revenue while reducing the damage to other economies.
"It's unclear whether a price cap will achieve this outcome," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
"There's still nothing stopping Russia from banning oil and refined product exports to G7 economies in response to a price cap, exacerbating shortage conditions in global oil and refined product markets."
G7 will also discuss the prospect of reviving the Iran nuclear talks after the European Union's foreign policy chief met senior officials in Tehran to try to unblock the stalled negotiations, a French presidency official said on Sunday.
"This week, traders' focus might be on a potential resumed Iran nuclear talks, which could lead to a revival of Iran's oil exports," CMC Markets analyst Tina Teng said.
In addition, some of the G7 leaders are pushing for an acknowledgment of the need for new financing for fossil energies investment, two sources told Reuters on Sunday, as European states scramble to diversify supplies.
June 27, 2022: The dollar found support from investors worried about recession and seeking safety to hold just below a two-decade high on Monday, having slipped late last week after downbeat U.S. economic data reduced bets on U.S. interest rate hikes.
While Asian stocks followed Wall Street higher, currency traders were wary of extending Friday's dollar selling because the dollar typically rises in times of uncertainty.
The risk-sensitive Australian dollar eased 0.3% to $0.6918, weighed down by sliding commodity prices. The euro was pinned at $1.0563, though the beaten-down yen steadied to 134.68 per dollar.
The U.S. dollar index was steady at 104.010, having made a 20-year peak of 105.79 earlier in the month.
Weakening U.S. economic data knocked it off that perch, and a survey released on Friday showed consumer confidence at a record low, giving another prompt for investors to cut back bets on U.S. interest rate hikes.
But the spectre of a global slowdown, and a preference for dollar-denominated assets in such times, has underpinned the greenback.
"The dollar tends to rise when people worry about a global recession," said Commonwealth Bank of Australia strategist Joe Capurso in Sydney.
Futures pricing shows traders now anticipating the U.S. Federal Reserve's benchmark funds rate stabilizing around 3.5% from March next year, a pullback from pricing in rates zooming close to 4% in 2023. Treasuries rallied last week.
The New Zealand dollar was pinned at $0.6035, while sterling was stuck at $1.2282.
Chinese factory activity data due to be released later this week could provide a guide as to whether the world's second-largest economy is finding momentum again after the disruption caused by strict COVID-19 lockdown measures.
China's yuan was steady at 6.6920.
Stocks gained in Asia on Monday amid improved risk sentiment after Wall Street rebounded strongly at the end of last week as oil prices eased, tempering fears of prolonged inflation and the accompanying aggressive Federal Reserve tightening.
Treasury yields remained subdued and the dollar hovered near the lowest in more than a week as investors continued to assess the outlook for U.S. rate hikes, and the potential for a recession.
Japan's Nikkei rallied 1.04%, while Australia's benchmark jumped 1.69%.
Chinese blue chips rose 0.54% and Hong Kong's Hang Seng advanced 1.46%.
South Korea's Kospi gained 1.65%.
MSCI's broadest index of Asia-Pacific shares rose 1.31%.
However, U.S. stock futures point to a 0.25% decline when those markets reopen. On Friday, the S&P 500 surged more than 3%, adding to an almost 1% gain on Thursday.
"We've had a decent end to the week in the U.S. markets and I think that's going to be the main scene for Monday here in Asia," amid a dearth of news or other new drivers, said Rob Carnell, chief economist for Asia-Pacific at ING.
"We've had two decent equity days on the run now. It's perhaps notable that you've had some consistency there."
Crude oil fell in volatile trading on Monday as the market grapples with concerns that a global economic slowdown could depress demand versus worries about lost Russian supply amid sanctions over the Ukraine conflict.
Both Brent and U.S. West Texas Intermediate (WTI) futures fell more than a dollar earlier. But, prices have rebounded with Brent at $112.78 a barrel, down 34 cents, and WTI at $107.17, down 45 cents. [O/R]
U.S. long-term Treasury yields hovered around 3.13% after bouncing off a two-week low just above 3% at the end of last week as traders removed bets for hikes next year, but still pondered if aggressive tightening this year could trigger a recession.
Yields have dropped from 3.456%, the highest in more than a decade, reached before the mid-month Fed meeting. Then, the central bank hiked rates by 75 basis points, the biggest increase since 1994, and signalled that a similar move is possible in July.
"The market remains focused in the trade-off between the policy response to high inflation and fears of a hard landing," Westpac rates strategist Damien McColough wrote in a client note.
"There will be ongoing discussions as to whether long-end yields have peaked, however, we would not yet expect 10-year yields to fall materially or sustainably below 3%."
The dollar was steady on Monday, continuing to consolidate near the lowest since the middle of the month against major peers.
The dollar index - which measures the currency versus six rivals - was little changed at 104.01, after gradually gravitating over the past few sessions toward the June 17 low of 103.83.
Gold ticked 0.32% higher to $1,832.10 per ounce.