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Gold slides almost 2% to near 3-week trough after U.S. yields jump

Gold prices slipped nearly 2% on Tuesday as a firmer dollar, higher Treasury yields and hopes for a faster U.S. economic recovery dampened demand for safe-haven bullion.

·         Spot gold was down 1.7% at $1,682.81 per ounce in afternoon trading. Earlier in the session, bullion fell about 2% to its lowest since March 8 at $1,678.40.

 

·         U.S. gold futures settled 1.7% down at $1,686.

 

·         Benchmark U.S. 10-year Treasury yields rose to a 14-month peak on Tuesday morning before pulling back, bolstered by hopes of stronger growth and inflation ahead of U.S. President Joe Biden’s multitrillion-dollar infrastructure plan.

·         “The short-term drivers just appear to be becoming very bearish for gold,” said Edward Moya, senior market analyst at OANDA, pinning gold’s recent weakness on a firmer dollar and higher yields.

 

While gold is likely to see some pressure in the short-term, investors pricing in inflationary concerns could “eventually trigger a frenzy of gold buying,” Moya added.

·         The dollar index jumped to a more than four-month high, making greenback-denominated gold more expensive for holders of other currencies.

·         Higher U.S. Treasury yields have threatened gold’s appeal as an inflation hedge as they increase the opportunity cost of holding bullion, which pays no interest.

·         Meanwhile, palladium gained 1.8% to $2,574.26, having earlier risen over 3% after sliding 5.5% in the previous session.

·         Palladium will likely remain a tight market in the coming years, keeping prices elevated well above $2,100 for at least the next two years, said Jeffrey Christian, managing partner of CPM Group.

 

But palladium’s widening premium over platinum could drive some autocatalyst demand substitution from palladium to platinum and limit palladium’s gains slightly, he added.

 

Both platinum and palladium are used in automobile catalytic converters to limit exhaust emissions.

 

·         Silver fell 2.5% to $24.05 an ounce and platinum was down 1.8% at $1,154.89.

 

·         Dollar hits new one-year high to yen on U.S. pandemic recovery optimism

The dollar index held above 93 after surging as high as 93.357 on Tuesday. It has climbed from close to 90 at the start of March, on course for its best month since 2016.

The greenback set a fresh one-year top of 110.48 yen early in Wednesday’s Asian session, and hovered near Tuesday’s almost five-month high of $1.1711 per euro.

 

·         Biden to lay out infrastructure plans as part of massive economic proposal

President Joe Biden on Wednesday will detail a plan to overhaul U.S. infrastructure and manufacturing, setting the stage for his second major legislative battle in less than three months as president.

 

·         Biden's job and infrastructure plan will fund projects over 8 years -sources

U.S. President Joe Biden will roll out a roughly $2 trillion job and infrastructure spending plan on Wednesday that will fund road and bridge projects alongside job initiatives over 8 years, according to two sources familiar with the plan.

 

·         Biden expected to end Trump ban on temporary foreign workers

 

·         'Optimistic' Fed policymakers see U.S. economy about to boom

Federal Reserve policymakers are optimistic about the U.S. economic outlook as more Americans are vaccinated and government aid gets to households and businesses, and they are not going to stand in its way

 

·         Fed's Barkin sees excess savings driving economy for years

Richmond Federal Reserve Bank President Thomas Barkin on Tuesday said he is very “bullish” on the U.S. economy this year, and expects household savings accumulated during the COVID-19 pandemic to help fuel growth in 2022 and 2023 as well.

“People just have a lot of money in their pockets,” Barkin told the Montgomery County Chamber of Commerce. As vaccinations accelerate and people feel more comfortable going out to dinner and getting on airplanes, he said, they’ll spend more of that money, but there’s “no way” it will all get spent this year.

 

·         U.S., Central Asian countries agree to focus on digital trade issues

 

·         CORONAVIRUS UPDATES:

COVID-19 infections are still rising in 81 countries.

 

Global Cases: 128.77 (+529,525)

Global Deaths: 2.81M (+10,652)

 

No. 1

U.S. Cases: 31.09M (+61,784)

U.S. Deaths: 564,133 (+868)

 

No.2-7

Brazil Cases: 12.66M (+86,704)

India Cases: 12.14M (+53,158)

France Cases: 4.58 (+30,702)

Russia Cases: 4.53M (+8,277)

UK Cases: 4.34M (+4,040)

Italy Cases : 3.56 (+16,017)

 

No.116

Thailand Cases: 28,821 (+48)

Thailand Deaths: 94

 

·         Global Vaccination

So far, at least 144 countries have begun vaccinating people for the coronavirus and have administered at least 564,451,000 doses of the vaccine.

·         T cells induced by COVID-19 infection respond to new virus variants: U.S. study

 

·         U.S. joins 13 other nations in criticizing WHO for a lack of transparency in China Covid report

In a joint statement, the governments of Australia, Canada, the Czech Republic, Denmark, Estonia, Israel, Japan, Latvia, Lithuania, Norway, South Korea, Slovenia, United Kingdom and the United States, wrote that the report “was significantly delayed and lacked access to complete, original data and samples.”

 

·         Germany decides AstraZeneca COVID shot can be used for over-60s, document shows

 

·         Spain removes age limit on AstraZeneca vaccine, to give J&J to over-66s: Cadena Ser radio

 

·         Venezuela receives doses of Russian EpiVacCorona vaccine for trials

 

·         Brazil to spend extra $1 billion to fight pandemic as country hits daily death record

 

 

·         Japan factory output falls in Feb in worrying sign for recovery

Japan’s industrial output fell in February due to declines in the production of cars and electrical machinery, in a worrying sign for an economy struggling to recover from the deep impact of the coronavirus pandemic.

Official data released on Wednesday showed factory output shrank 2.1% from the previous month in February, dragged down by falls in production of cars, electrical machinery and information and communication equipment.

 

·         Saudi Arabia announces $1.3 trillion private sector investment push led by Aramco, SABIC

·         U.S. open to discussing wider nuclear deal road map if Iran wishes

 

·         U.S.' Blinken calls for global companies to reconsider financial support to Myanmar's military

U.S. Secretary of State Antony Blinken on Tuesday called on international companies to consider cutting ties to enterprises that support Myanmar’s military and he decried its crackdown on anti-coup protesters.

Reference: CNBC, Reuters, Worldometers