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Gold Falls Amid New Signs of Economy Rebound; Copper Jumps – Yahoo Canada Finance

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(Bloomberg) — Gold dropped as investors weighed further signals of an economic rebound, the latest being Friday’s better-than-expected U.S. jobs data.

Employers in the U.S. added the most jobs in seven months in March, amid a rollout of coronavirus vaccinations and an easing of business restrictions. Nonfarm payrolls increased by 916,000 from February, according to the Labor Department.

Commodity traders are also watching the progress of U.S. President Joe Biden’s $2.25 trillion infrastructure-spending proposal. Republicans, wary of the tax increases needed to fund it, have said they may support a smaller plan.

Gold trading is likely to be muted on Monday as markets in much of Europe, Australia, China and Hong Kong are shut for holidays.

Bullion posted its first quarterly drop since 2018 in the first three months of 2021, as U.S. bond yields rose amid more optimism over the post-pandemic economic recovery. That’s caused investors to turn more bearish on the precious metal — holdings in bullion-backed exchange-traded funds have dropped to the lowest since May, while hedge funds cut net bullish gold bets to a three-week low last week.

“Gold is likely to face an uphill climb — the global economy is recovering fast,” said Howie Lee, an economist at Oversea-Chinese Banking Corp.

Spot gold fell 0.3% to 1,723.38 an ounce at 1:11 p.m. in London. Silver, palladium and platinum all dropped. The Bloomberg Dollar Spot Index was little changed and Goldman Sachs Group Inc. dropped its short call on the currency.

Copper futures on the Comex rose 3% to $4.1175 a pound as investors assessed a decision by Chile, a major exporter, to close its borders during April.

The London Metal Exchange is shut Monday for the Easter holidays.

(A previous version of this story was corrected to show that copper rose)

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Canadian dollar notches biggest gain in a month as stocks rally

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The Canadian dollar strengthened to a one-week high against its U.S. counterpart on Thursday as investor sentiment picked up and domestic data showed that retail sales fell less than expected in July.

World stock markets rallied and the safe-haven U.S. dollar retreated from one-month highs as worries about contagion from property developer China Evergrande eased and investors digested the Federal Reserve’s plans for reining in the stimulus.

Canada is a major exporter of commodities, including oil, so the loonie tends to be particularly sensitive to investor appetite for risk.

“The assumption here is that (Fed interest) rate hikes are still a long way out and so equities markets can still perform with accommodative financial conditions,” said Mazen Issa, senior FX strategist at TD Securities in New York.

“Consequently, currencies that have a higher beta to the equity market, like the CAD, can do alright.”

U.S. crude oil futures settled 1.5% higher at $73.30 a barrel, while the Canadian dollar was trading up 0.9% at 1.2653 to the greenback, or 79.03 U.S. cents.

It was the currency’s biggest advance since Aug. 23. It touched its strongest level since last Thursday at 1.2628.

Canadian retail sales dipped 0.6% in July, compared with expectations for a decline of 1.2%, while a preliminary estimate showed sales rebounding 2.1% in August.

Canadian government bond yields were higher across a steeper curve, tracking the move in U.S. Treasuries.

The 10-year touched its highest level since July 14 at 1.335% before dipping to 1.330%, up 11.6 basis points on the day.

(Reporting by Fergal Smith; Editing by Nick Zieminski and Peter Cooney)

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China Vows Better Policy Support to Economy as Headwinds Mount – BNN

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(Bloomberg) — Chinese policy makers reiterated the need to fine-tune economic policies as the world’s second-largest economy faces increasing headwinds from virus outbreaks and high commodity prices. 

Policy should be preemptive and coordinated across cycles, the State Council, the equivalent of China’s cabinet, said in a statement after a meeting chaired by Premier Li Keqiang Wednesday. Governments at all levels should maintain the continuity and stability of macroeconomic policies and enhance their effectiveness, while also do a good job in preventing and controlling virus cases, it said.

Efforts are needed to better coordinate fiscal, financial and employment policies in order to “stabilize reasonable expectations by the market,” it said. 

China again vowed to make sure the economy is operating within a reasonable range, with further measures to boost consumption, guiding private capital to play a better role in expanding investment, and ensuring stable growth in foreign trade and foreign capital, according to the statement. While the employment situation is stable this year, efforts are still needed to maintain employment and help companies, it said. 

The economy took a knock in August from stringent virus controls and tight curbs on property. While China’s Covid zero approach helped to quickly quash the infections, retail sales growth suffered, slowing to 2.5% in August. 

Facing the continued commodity boom, the State Council also pledged to use more market-based measures to stabilize commodity prices and ensure supplies of power and natural gas during the winter. 

©2021 Bloomberg L.P.

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UAE Says It's Unwinding Pandemic Stimulus as Economy Recovers – Bloomberg

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The United Arab Emirates has begun winding down an economic support program launched in response to the coronavirus pandemic as the economy shows signs of gradual recovery, the central bank said in a statement.

The reduced reserve requirements for banks won’t change for now and neither will the lower loan-to-value ratio required for first-time home buyers seeking mortgage loans, the bank said. The loan deferral component of the Targeted Economic Support Scheme will expire by the end of 2021 with financial institutions able to carry on tapping a collateralized 50-billion-dirham ($13.6 billion) liquidity facility until the middle of 2022, in line with earlier guidance.

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