Gold futures rose slightly as concerns over China Evergrande Group's debt situation continued to weigh on risk appetite. While gold gained as a safe-haven asset, its gains were limited by rising US Treasury yields. China's housing ministry tightened oversight of Evergrande's accounts to prioritize housing projects over creditors. Demand for gold also increased in China last week as investors sought safety. Central bank speakers and monetary policy decisions could impact gold prices going forward as tapering talks continue.

1. Gold Up As China Evergrande
Concerns Continue

2. Points To Be Discussed Today:
• Gold Futures Were Up 0.43%
• SPDR Gold Trust
• Gold Bugs Remain Firm Despite Headwinds
• Gold Rise During The Previous Week
• U.S. Dollars Out Of The Market And Pressure Gold
• Gold Price In US Dollars
• XAUUSD Chart

3. Gold Futures Were Up 0.43%
• Gold was up on Monday morning in Asia, with
risk appetite decreasing as concerns over
China Evergrande Group's (HK:3333) debt
situation, and its potential economic impact,
continue.
• Gold futures were up 0.43% to $1,759.30 by
11:40 PM ET (3:40 AM GMT).

4. China’s Ministry of Housing and Urban-
Rural Development
• China’s Ministry of Housing and Urban-Rural
Development tightened scrutiny of China
Evergrande’s bank accounts to ensure funds
are used to complete housing projects and not
diverted to pay creditors.
• The developer missed a payment on offshore
bonds during the previous week, with a
second payment due later in the week.

5. Demand For Physical Gold In China
• Its electric-car unit, China Evergrande New
Energy Vehicle Group, will also not proceed
with a proposed issue of CNY-denominated
shares.
• Demand for physical gold in China, a top
consumer, rose during the previous week as
investors sought safety in the safe-haven
yellow metal as they monitor the ongoing
situation at China Evergrande.

6. 10-Year U.S. Treasury Yields
• However, benchmark 10-year U.S. Treasury yields
climbed to their highest since early July 2021,
which capped further gains for the yellow metal.
• On the central bank front, European Central Bank
(EBC) President Christine Lagarde will speak on
Tuesday.
• Lagarde will be joined by Bank of England (BOE)
Governor Andrew Bailey, Bank of Japan Governor
Haruhiko Kuroda and U.S. Federal Reserve
Chairman Jerome Powell at an ECB forum panel a
day later.

7. SPDR Gold Trust
• Meanwhile, U.S. Treasury Secretary Janet
Yellen will join Powell to testify at a Senate
Banking Committee hearing on Tuesday.
• The House Financial Services Committee
hearing will follow on Thursday.
• SPDR Gold Trust(P:GLD) said its holdings
increased 0.1% to 993.52 tons on Friday from
992.65 tons the day before.

8. Gold Bugs Remain Firm Despite
Headwinds
• The precious metal’s gains were restrained,
however, by rising benchmark 10-year U.S
Treasury yields from early July 2021.
• Rising bond yields will further dampen the
price of gold.
• As investors fret about the debt situation at
China Evergrande Group, and how it will affect
the economy, gold was up on Monday
morning in London.

9. Precious Metal’s Gains Were
Restrained
• Futures for gold rose by 0.43% to $1,759 an ounce on
the day, but headwinds remain.
• The precious metal’s gains were restrained, however,
by rising benchmark 10-year U.S Treasury yields from
early July 2021.
• Rising bond yields will further dampen the price of
gold.
• China Evergrande’s bank accounts have been closely
scrutinized by the Ministry of Housing and Urban-Rural
Development to ensure funds are used to finish
housing projects, not to pay creditors.

10. Renewed Strength In The Dollar Drag
Down The Price Of Gold
• An offshore bond payment was missed by the
developer the previous week, and a second
payment was due later that week.
• In the midst of the apex bank’s tapering talks,
gold is one asset that remains highly vulnerable.
• An anticipated delay had been heightened by
cooling inflation and weaker employment data,
but any renewed strength in the dollar as the
program was curtailed would drag down the price
of gold.

11. Gold Rise During The Previous Week
• Besides excluding an issue of CNY-
denominated shares, its electric vehicle unit
will also not move forward with a planned
issue.
• As investors monitored the situation at China
Evergrande, they turned to the yellow metal
as a safe haven. China, a top gold consumer,
saw its demand for gold rise during the
previous week.

12. Tapering, Higher Rates Are Coming;
Don’t Fight The Federal Reserve
• The Fed should start reducing its support for the
economy in November and could start raising
interest rates by the end of next year.
• Gold futures put in a mixed performance before
closing slightly higher for the week.
• The price action was driven by a choppy trade in
the U.S. Dollar, but gains were likely limited by a
rise in U.S. Treasury yields.
• Gold was also support at times by lower demand
for riskier assets.

13. U.S. Dollars Out Of The Market And
Pressure Gold
• The reasons for the mostly sideways trade
were confusing at times for short-term traders
so we really didn’t take away much from the
price action.
• The mid-to-longer-term looks bearish
because the Fed signaled it was moving closer
to tightening policy.
• This would take U.S. Dollars out of the market
and pressure gold.

14. Gold Traders Last Week
• The dollar didn’t offer much guidance for gold
traders last week.
• One day it was rallying because of safe-haven
demand tied to stock market volatility.
Another day it was falling because of easing
tensions in the stock market.
• Overall, however, the dollar was supported by
higher yields.

15. The U.S. Dollar Is In This Mix
• The race is on to see which central banks
move aggressively toward removing stimulus
from their respective economies.
• Some are raising rates or planning to raise
rates, other are trimming stimulus or tapering
bond purchases.
• The U.S. Dollar is in this mix and that doesn’t
bode well for gold prices.

16. Gold Prices May Firm
• Gold prices may firm if the stock market
continues to rally sharply, but that’s only
because investors move into the safety of U.S.
Treasuries.
• When they do that, yields fall and gold gets an
artificial boost.
• Investors also move money into the U.S.
Dollar, when weighs on gold prices.

17. Gold Into A Mid-to-long Term Bull
Market
• I don’t think that even a stock market crash could turn
gold into a mid-to-long term bull market.
• In order for that to happen, the Federal Reserve and
other central banks would have to pump additional
stimulus into the financial markets.
• That isn’t likely to happen, however, because most are
trying to reduce stimulus.
• If they did an about face then they risk losing the
market’s economy.
• What this means is that the process of a global
tightening of monetary policy is starting and gold
prices will have limited upside potential.

18. Gold Price In US Dollars

19. XAUUSD Chart

20. Gold Up As China Evergrande
Concerns Continue

21. THANKS FOR LISTENING
Gold Up As China Evergrande
Concerns Continue