Gold slips as stronger dollar prevails over easing yields
· Gold prices slipped on Tuesday as the dollar’s rally to a two-week peak offset a dip in U.S Treasury yields.
· Spot gold fell 0.6% to $1,727.31 per ounce around 4 p.m. ET. U.S. gold futures settled 0.8% lower at $1,725.10.
· “We see a tenuous gold market on the premise that depending on the given day we see forces pushing or pulling in either direction,” said David Meger, director of metals trading at High Ridge Futures, adding a gaining dollar, amid hopes of an economic recovery, was keeping bullion pressured.
· The dollar touched its highest since March 9, while U.S. benchmark Treasury yields dipped. A stronger greenback raises the cost of holding bullion for other currency holders.
· “Gold has all to do to break out of its current downward trend, especially with the recovering dollar standing in its way,” said FXTM market analyst Han Tan. “Gold has to first break above its 50-day simple moving average in order to send a favorable signal to bullion bulls.”
However, the Federal Reserve’s signaling of low-interest rates and the likelihood for further fiscal stimulus were capping the metal’s losses and gold could draw further support from a potential resurgence in COVID-19 cases and waning economic optimism that would hurt yields, Meger added.
· Fed Chair Jerome Powell told U.S lawmakers on Tuesday he expected inflation to rise over the year but it would be “neither particularly large nor persistent.”
· “Right now they (the Fed) would rather err on the side of letting inflation overheat before they do anything,” said Frank J. Cholly, senior market strategist at RJO Futures. “They don’t want to slam the breaks on an economy that’s really beginning to take off” and that should support gold prices, he added.
· Among other precious metals, silver fell 2.7% to $25.08 and platinum dropped 1.1% to $1,170.01.
· Palladium rose 0.2% to $2,620.51.
· Powell and Yellen agree valuations in the market may be high, but aren’t worried about stability
Treasury Secretary Janet Yellen and Federal Reserve Chairman Jerome Powell on Tuesday agreed that elevated asset valuations in pockets of the markets are not yet reason for alarm.
· Yellen says post-crisis plans will move to infrastructure, taxes
Treasury Secretary Janet Yellen said on Tuesday the U.S. economy remains in crisis from the pandemic even as she defended developing plans for future tax increases to pay for new public investments.
· Yellen says no plans to lengthen maturity of U.S. Treasury issuance
· Powell’s getting a ‘green light’ to ignore inflation spikes, says Caravel Concepts CEO Michael Jones
Michael Jones, Caravel Concepts CEO, and Diane Swonk, Grant Thornton chief economist, join ‘Power Lunch’ to discuss Treasury Secretary Janet Yellen and Federal Reserve chair Jerome Powell’s testimony on the economic recovery.
· Fed Chair Powell: Monitoring commercial real estate very carefully
Federal Reserve chairman Jerome Powell and Treasury Secretary Janet Yellen answer questions from lawmakers about the monetary and fiscal response to the coronavirus pandemic.
· Powell: Important for people to get vaccinated for economic recovery
Federal Reserve chairman Jerome Powell and Treasury Secretary Janet Yellen answer questions from lawmakers about the monetary and fiscal response to the coronavirus pandemic.
· Fed sets up panels to examine risks that climate change poses to the financial system
The Federal Reserve has taken another step forward in efforts to ensure that the financial system is protected against climate risks.
As the central bank turns its attention increasingly toward the matter, the Fed has created a Financial Stability Climate Committee and a Supervision Climate Committee.
The panels will focus on “the potential for complex interactions across the financial system,” Fed Governor Lael Brainard said in remarks Tuesday.
“Climate change and the transition to a sustainable economy also pose risks to the stability of the broader financial system. So a second core pillar of our framework seeks to address the macrofinancial risks of climate change,” Brainard added.
· Fed's Brainard: Central bank 'resolute' in using outcomes to shape policy
· Fed's Bullard sees fast growth this year as pandemic nears end
Fed's Bullard sees inflation at 2.5% this year, easing only slightly in 2022
Inflation will hit 2.5% this year and not fall much in 2022, which the Federal Reserve should welcome as a way to reaffirm the central bank’s inflation target, St. Louis Federal Reserve Bank President James Bullard said on Tuesday.
· New Home Sales Drop 18.2% in February, Remain Higher Than Last Year
NEW HOMES SALES FELL 18.2% in February to a seasonally adjusted 775,000 while prices rose, according to estimates released on Tuesday by the U.S. Census Bureau and the Department of Housing and Urban Development.
· CORONAVIRUS UPDATES:
COVID-19 infections are still rising in 80 countries.
Global Cases: 124.77 (+475,287)
Global Deaths: 2.74M (+9,988)
No. 1
U.S. Cases: 30.63M (+58,667)
U.S. Deaths: 556,815 (+868)
No.2 - 7
Brazil Cases: 12.13M (+84,996)
India Cases: 11.73M (+47,264)
Russia Cases: 4.47M (+8,457)
France Cases: 4.31 (+14,678)
UK Cases: 4.30M (+5,379)
Italy Cases : 3.41 (+18,765)
No.116
Thailand Cases: 28,277 (+401)
Thailand Deaths: 92 (+1)
· Global Vaccination
So far 139 countries have begun vaccinating people for the coronavirus and have administered at least 457,682,000 doses of the vaccine.
· Nearly 1 in 5 U.S. adults is fully vaccinated
· Georgia opening up vaccines to all adults beginning Thursday
· J&J plant authorization clears way for big boost in U.S. COVID-19 shots
· AstraZeneca may have included outdated information in Covid vaccine trial, U.S. health agency says
A U.S. health agency said Tuesday that AstraZeneca may have included outdated information in trial results of its Covid-19 vaccine, potentially casting doubt over published efficacy rates.
· Thailand: BoT expected to keep rates on hold – UOB
Lee Sue Ann, Economist at UOB Group, believes the Bank of Thailand (BoT) would leave the reference rate unchanged at its week on Wednesday.
“We keep our call for BoT to leave its benchmark rate unchanged at 0.50% for the whole of 2021.”
“That said, Thailand’s economic growth is likely to be uneven, amid pronounced downside risks should COVID-19 worsens.”
“Also, should macroeconomic fundamentals stay unexpectedly subdued into 2H21, a 25bps rate cut could materialize then.”
· China’s retaliatory sanctions on the EU set the stage for how Beijing will respond to other global powers
Robert Daly, director of the Kissinger Institute on China and the United States, said that in retaliation to the latest sanctions, Beijing could announce similar restrictions on individuals from Canada, U.K. and the U.S.
“You’ll notice that under Xi Jinping it’s become a signature diplomatic move that China will mirror and amplify whatever is done to it, in the way of sanctions,” Daly said on CNBC’s “Street Signs Asia” Tuesday.
· North Korea fires off first missile test since Biden took office
· North Korea fired two cruise missiles off west coast on Sunday: South Korea military
Reference: CNBC, Reuters, Worldometers, USA News
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