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Gold slips as firmer U.S. yields pinch appeal

Gold fell on Monday as an uptick in U.S. Treasury yields weighed on bullion’s appeal, while investors awaited key U.S. inflation and retail sales data to gauge the health of the economy.

· Spot gold fell 0.6 % to $1,732.14 per ounce by 1:57 p.m. EDT (1757 GMT). U.S. gold futures settled down 0.7% at $1,732.70.

· Gold is likely to benefit if inflation rises much higher than the target, said StoneX analyst Rhona O’Connell. “If we do start seeing inflation accelerating and people start thinking interest rates are going to go up again, then gold might struggle a bit.”

· Among other precious metals, silver fell 1.7% to $24.82 per ounce.

· Palladium gained 1.3% to $2,674.68 per ounce and platinum dipped 2.3% to $1,170.90, having earlier hit a near two-week low of $1,164.50.

· Dollar drops as traders prepare for inflation data

The dollar slipped on Monday towards a three-week low as Treasury yields traded near recent lows and traders awaited crucial U.S. inflation and retail sales data in coming days.

Investors are now waiting for U.S. March inflation data due on Tuesday.

The benchmark 10-year Treasury yield was at 1.664% after dropping to as low as 1.6170% last week. It had surged to a more than a one-year high of 1.7760% on March 30.

The dollar index, which measures the U.S. currency against a basket of currencies, weakened 0.2% to 92.03. The euro initially dropped but later recovered and was up 0.1% to $1.1915.

The dollar fell 0.3% to 109.33 yen versus the Japanese currency.

Bitcoin traded above $60,000, closing the gap to its record high.

· The dollar looks ‘vulnerable’ until the reopening is fully priced in: Standard Chartered

Steve Englander of Standard Chartered Bank talks about the downside risk for the U.S. dollar, while saying markets will be able to handle a gradual climb in U.S. Treasury yields.

· U.S. budget deficit hits record high for March as aid swells outlays

The U.S. government posted a March budget deficit of $660 billion, a record high for the month, as direct payments to Americans under President Joe Biden’s stimulus package were distributed, the Treasury Department said on Monday.

The deficit for the first six months of the 2021 fiscal year ballooned to a record $1.706 trillion, compared to a $743 billion deficit for the comparable year-earlier period.

· Powell says it’s ‘highly unlikely’ the Fed will raise rates this year, despite stronger economy

Despite what he sees as a rapidly recovering economy, Federal Reserve Chairman Jerome Powell has reaffirmed the central bank’s commitment to keep loose monetary policy in place.

That includes a statement of near-certainty that interest rates won’t be going anywhere as inflation remains tame and millions of Americans remain in need of assistance as the nation rebuilds from the damage caused by the Covid-19 pandemic.

Powell says U.S. Fed is reviewing 'concerning' Archegos bank losses - CBS '60 Minutes'

· Fed's Rosengren says U.S. economy should see significant rebound this year

The U.S. economy could see a significant rebound this year thanks to accommodative monetary and fiscal policy, but the labor market still has much room for improvement, Boston Federal Reserve Bank President Eric Rosengren said on Monday.

“With labor-market slack still significant, and inflation still below the Federal Reserve’s 2 percent target, my perspective is that the current highly accommodative stance of monetary policy is appropriate,” Rosengren said during a virtual discussion with business leaders.

Coronavirus vaccines’ ability to successfully prevent the spread of new variants of the virus would also be important, he said. “Assuming virus variants do not become especially problematic, we should see an unusually strong post-recession recovery,” he said.

· Biden seeks to showcase bipartisanship in infrastructure meeting with Republicans

· CORONAVIRUS UPDATES:

COVID-19 infections are still rising in 56 countries.

Global Cases: 137.24M (+582,056)
Global Deaths: 2.95M (+8,661)

No.1
U.S. Cases: 31.985M (+54,040)
U.S. Deaths: 576,291 (+453)

No.113

Thailand Cases: 33,610 (+985)
Thailand Deaths: 97

Top 3 of New Cases:
1. India Cases: 13.68M (+160,694)
2. Turkey Cases: 3.9M (+54,562)
3. U.S. Cases: 31.98M (+54,040)

Top 3 of New Deaths:
1. Brazil Deaths: 355,031 (+1,738)
2. India Deaths: 171,089 (+880)
3. U.S. Deaths: 576,291 (+453)

· New infections reported by region

More than 48 were reported from countries in Asia and the Middle East.

· India leads the world in the daily average number of new infections reported, accounting for one in every 5 infections reported worldwide each day

· Global Vaccination

So far, at least 161 countries have begun vaccinating people for the coronavirus and have administered at least 787,078,000 doses of the vaccine.

· The United States has fully vaccinated 22% of its population, while the United Kingdom has vaccinated 11% fully, according to the Reuters vaccine tracker here. Still, other countries are not faring as well, with France and Germany at around 6% vaccinated.

· WHO says Covid pandemic is growing ‘exponentially’ at more than 4.4 million new cases a week

· U.S. COVID cases march higher, hospitalizations up for second week in a row

The United States reported an 8% rise in new cases of COVID-19 to 490,000 last week, the fourth week in a row that infections have increased, according to a Reuters analysis of state and county data.

· Chinese vaccines ‘don’t have very high protection rates,’ top health official admits

In a rare admission of the weakness of Chinese coronavirus vaccines, the country’s top disease control official says their effectiveness is low and the government is considering mixing them to get a boost.

Chinese vaccines “don’t have very high protection rates,” said the director of the China Centers for Disease Control, Gao Fu, at a conference Saturday in the southwestern city of Chengdu.

· India approves Russia's Sputnik V COVID-19 vaccine

· Pandemic has delayed sustainable development goals by decades, says former Unilever CEO

· Europe could be seeing the decline of its gig economy. And new rules could mean higher prices

· UK economy to return to pre-COVID-19 level around mid-2022: Reuters poll

· UK, EU talks on Northern Ireland are constructive, differences remain, says UK PM's spokesman

· Middle East investor seeks U.S. opportunities as Biden pushes infrastructure plan

Investcorp, a Bahrain-based investment company, is looking for opportunities to invest in U.S. roads and ports as U.S. President Joe Biden proposed to spend more than $2 trillion on infrastructure.

Biden is set to meet with bipartisan members of Congress to sell his infrastructure plan. The plan would inject money into building bridges, airports, broadband, electric vehicles, housing and job training, while hiking the corporate tax rate.

· China March new bank loans rise but broad credit growth eases

New bank loans in China rose more expected in March from the previous month due to strong corporate and household demand, as the central bank walks a tightrope between supporting the rapidly recovering economy and containing debt risks.

Chinese banks extended 2.73 trillion yuan ($416.62 billion)in new yuan loans in March, up from 1.36 trillion yuan in February and exceeding analyst expectations of 2.45 trillion yuan, according to data released by the People’s Bank of China (PBOC) on Monday.

That pushed bank lending in the first quarter to a record high of 7.67 trillion yuan, according to Reuters’ calculations based on central bank data. It beat the previous peak of 7.1 trillion yuan in the first quarter of 2020, when policymakers began rolling out unprecedented measures to deal with the shock from the coronavirus crisis.

· China’s Huawei blames global chip shortage on U.S. sanctions

· Oil rises slightly amid U.S. vaccine rollout, Middle East tension

Oil prices rose slightly on Monday on optimism over the pace of coronavirus vaccinations in the United States and after the Yemen-based Houthi movement said it fired missiles on Saudi oil sites.

Crude prices have remained rangebound in the past three weeks, as growing expectations of surging U.S. economic activity are balanced by the slow rate of vaccination in Europe and anticipation of additional supply from Iran in coming months.

Brent rose 0.4% to above $63 a barrel. U.S. West Texas Intermediate (WTI) rose 0.5% to settle at $59.70 a barrel.

· S&P 500 closes flat near record high in another muted session ahead of key inflation data

U.S. stocks hovered near their record levels on Monday as dull trading resumed before the release of widely-watched inflation data and the start of first-quarter corporate earnings.

The S&P 500 dipped less than 1 point to 4,127.99 after closing at a record high in the previous session. The Dow Jones Industrial Average slipped 55.20 points, or 0.2%, to 33,745.40, also falling from a record high. Intel was the biggest decliner in the blue-chip Dow, dropping more than 4%. The Nasdaq Composite fell 0.4% to 13,850.00.

· Asia-Pacific stocks edge higher; China trade data for March ahead

Shares in Asia-Pacific edged higher in Tuesday morning trade following a muted finish overnight on Wall Street.

In Japan, the Nikkei 225 rose 0.23% in early trade while the Topix index gained 0.13%. South Korea’s Kospi advanced 0.18%.