Gold, silver settle higher, recoup a portion of recent losses
Gold and silver futures settled higher Wednesday, recouping a portion of their losses from a day earlier, even as some upbeat U.S. economic data served to limit the rise for haven precious metals. "
April gold GCJ21, rose $1.70, or nearly 0.1%, to settle at $1,835.10 an ounce.
March silver SIH21, settled at $26.889 an ounce, up 49 cents, or 1.8%.
· Over the past few weeks, [gold] has struggled to break away from the sticky $1,850 thanks to conflicting themes," said Lukman Otunuga, senior research analyst at FXTM.
"A catalyst is needed, and this may come in the form of the pending U.S. jobs report or even developments revolving around the U.S. fiscal package." Until then, prices are likely to trade in a range, with minor support at $1,820 and resistance around $1,875, he said.
· A death cross appears imminent in gold
Gold futures are set to see a death cross form on the price charts that many technical strategists believe may underscore a bearish trend in the yellow metal.
A death cross occurs when the 50-day moving average, which many chart watchers use as a short-term trend tracker, crosses below the 200-DMA, which is widely viewed as a dividing line between longer-term uptrends and downtrends. The idea is that the cross marks the spot that a shorter-term selloff can be defined as a longer-term downtrend.
Presently, gold’s 50-day moving average stands at $1,857.08 an ounce, while its 200-day moving average is at $1,853.27, FactSet data show (see attached chart).
The potential formation of a death cross, which reflects the recent slump in trading, comes as gold has experienced whipsawing action, which on Wednesday culminated in April gold GC00, 0.01% GCJ21, 0.01% inching 0.1% higher, to settle at $1,835.10 an ounce, after the precious metal tumbled 1.6% on Tuesday.
Gold bulls see the Biden administration’s $1.9 billion coronavirus relief package, as possible support for bullion, even if the Democratic leader’s proposal comes in at a fraction of his proposal as he compromises with Republicans. The extra stimulus to economic growth, combined with the Federal Reserve’s loose monetary policy, may spur inflation eventually.
· Experts also have pointed to coronavirus vaccine efforts as also spurring the economic rebound and supporting gold’s outlook
· Cailin Birch, global economist at The Economist Intelligence Unit was told MarketWatch in a recent interview that bullion prices may drop noticeably in the third quarter to an average $1,775 as gross domestic product rebounds, then to around $1,750 in the fourth quarter of 2021.
Birch told MarketWatch’s Saefong, however, that a long, halting economic recovery will help to buttress prices over the following two years.
The last death cross in gold formed back on June 25, 2018 and a golden cross, when the 50-day rises above the 200-day, occurred on Jan. 22, 2019, according to Dow Jones Market Data.
· Democrats push ahead on COVID-19 relief, Biden flexible on who gets checks
The Democratic-controlled U.S. Congress pushed ahead on Wednesday with a maneuver to pass President Joe Biden’s $1.9 trillion COVID-19 relief package without Republican support, as the White House said it was flexible on a key element of the plan.
Biden told Democrats he would consider tighter limits on who would qualify for $1,400 checks, although he said he would not compromise on the size of the payments. That could possibly narrow the gap between his package and the $600 billion Republican proposal.
· Schumer, after Biden meeting, says Democrats united on a 'bold' COVID-19 bill
U.S. Senate Democratic Leader Chuck Schumer, after meeting with President Joe Biden, said they were united on a big COVID-19 relief package and that Democrats would work with Republicans as possible, but offered no further details.
· Yellen calls for 'acting now - and acting big' on pandemic relief
U.S. Treasury Secretary Janet Yellen on Wednesday said it was imperative to enact a comprehensive $1.9 trillion economic rescue package that includes $350 billion in aid to state and local governments, the Treasury said in a statement.
Yellen, in a call with a bipartisan group of mayors, said the government’s failure to provide sufficient aid to states and localities during the last recession had resulted in sharp cuts in infrastructure and education, weakening the labor market and undercutting a broader economic recovery.
“The benefits of acting now – and acting big – will far outweigh the costs over the long term,” it said.
· Biden presses U.S. House Democrats to move ahead with COVID-19 bill: Jeffries
President Joe Biden, in his call with U.S. House Democrats on Wednesday, made it clear to lawmakers that they need to move forward with COVID-19 relief legislation, House Democratic Caucus Chairman Hakeem Jeffries told reporters.
Biden also emphasized the need to get $1,400 direct payments to “everyday Americans” after people earlier received $600, he said at a news briefing, although he gave no other details.
· Biden economic advisor Bernstein defends Covid relief plan’s $1.9 trillion price tag
Jared Bernstein, a longtime economic advisor to President Joe Biden, on Wednesday defended the size of the administration’s $1.9 trillion stimulus package amid disagreements with Republicans over state and local funding and other provisions.
A member of Biden’s Council of Economic Advisors, Bernstein added that the bill, known as the American Rescue Package, could still pass with bipartisan support even if Democrats use a process that requires only a simple majority of senators.
· Fed's Evans, on fiscal support, says more is better
Chicago Federal Reserve Bank President Charles Evans on Wednesday voiced support for the Biden administration’s proposed $1.9 trillion economic stimulus package, saying he would rather risk a package that is too big than a smaller package that would mean a slower path to recovery.
“If it’s too much, I think we can live with that - if it’s too little, it’s going to be extremely bad for so many people,” Evans said. “I think doing more is better than doing less in the current situation.”
Fed's Evans sees price spikes ahead, but policy steady
· Fed's Mester says more fiscal help may be needed in short term
While easy monetary policy can support the U.S. economy in the long term, more fiscal help may be needed in the short term to carry the economy through the pandemic, Cleveland Federal Reserve Bank President Loretta Mester said on Wednesday.
Fiscal support can provide direct relief to the workers hurt by the pandemic, a group that disproportionately includes women, Black and Hispanic workers, Mester said during a virtual discussion with former Fed presidents organized by the Council for Economic Education.
· Fed's Bullard sees 'very strong' U.S. economic growth as pandemic eases in 2021
The coronavirus pandemic should ease over the first half of the year and give way to “very strong” U.S. economic growth during 2021, St. Louis Fed President James Bullard said on Wednesday.
“The health crisis will wane in the months ahead” as more people are vaccinated, Bullard said. As it does, families will be able to tap an “exceptionally high” level of savings and financial resources in hand after a year in which government programs pumped trillions of dollars into the economy.
“Monetary and fiscal policies have been especially aggressive, and the associated macroeconomic outcomes have been considerably better than expected,” Bullard said in remarks prepared for delivery at the CFA Society of St. Louis.
Fed's Bullard says not seeing broader risks from Gamestop trading frenzy
· More than two-thirds of Americans support Biden’s $1.9 trillion Covid relief plan, poll finds
President Joe Biden’s coronavirus rescue plan, and two of its key economic provisions, have broad support as Democrats try to push it through Congress, a poll released Wednesday found.
More than two-thirds, or 68%, of Americans support the $1.9 trillion package, the Quinnipiac University survey showed. Only 24% of respondents oppose the measure.
The $1,400 direct payments in the plan, a key sticking point as lawmakers negotiate legislation, are more popular than the overall proposal. The poll found 78% of Americans support the stimulus checks, and 18% oppose them.
· Minority-owned businesses struggle to access credit during pandemic, Fed survey finds
The vast majority of U.S. small businesses took a hit to their revenue last year because of the coronavirus pandemic, with minority-owned businesses struggling the most and worrying more about accessing credit, according to a Federal Reserve survey released on Wednesday.
The survey, which was conducted in September and October - after the first two rounds of the Paycheck Protection Program (PPP) had closed to new applicants and before Congress had finalized a nearly $900 billion aid package - showed many small businesses worried they would not survive without government help.
· U.S. stimulus to boost Mexico; LatAm stocks to outperform in short term: UBS
Increased U.S. infrastructure spending and fresh rounds of economic stimulus will bolster Mexico’s manufacturing-oriented economy, a UBS Global Wealth Management executive said on Wednesday.
· Private companies added 174,000 jobs in January, vs 50,000 estimate, ADP says
A month after reporting the first loss since April, the employment picture bounced back in January as companies added 174,000 new jobs, according to a report Wednesday from payroll processing firm ADP.
The gain beat the 50,000 estimate from economists surveyed by Dow Jones and improved on the 78,000 December decline, a number that was revised from the initially reported drop of 123,000.
“The labor market continues its slow recovery amid COVID-19 headwinds,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute.
· Coronavirus Updates:
Global Cases: 104.86 (+468,126)
Global Deaths: 2.27M (+13,547)
No. 1
U.S. Cases: 27.14M (+104,326)
U.S. Deaths: 461,504(+3,573)
No. 2 -6
India Cases: 10.79M (+12,703)
Brazil Cases: 9.33M (+53,164)
Russia Cases: 3.90M (+16,474)
UK Cases: 3.87M (+19,202)
France Cases: 3.25 (+26,362)
Asian Updates:
No. 37
Japan Cases: 393,836 (+2,210)
Japan Deaths: 5,912 (+118)
No. 71
Myanmar Cases: 140,927 (+263)
Myanmar Deaths: 3,160 (+14)
No. 83
China Cases: 89,619 (+25)
China Deaths: 4,636
No. 86
South Korea Cases: 79,311 (+467)
South Korea Deaths: 1,441 (+6)
No. 115
Thailand Cases: 21,249 (+795)
Thailand Deaths: 79
· More Than 108 Million ShotsGiven: Covid-19 Tracker
In the U.S., 35 million doses have been administered; rollout goes global
The biggest vaccination campaign in history is underway. More than 108 million doses have been administered across 67 countries, according to data collected by Bloomberg. The latest rate was roughly 4.25 million doses a day.
Globally, the latest vaccination rate is 4,253,851 doses per day, on average. At this rate, it will take 7.4 years to cover 75% of the population with a two-dose vaccine.
In the U.S., more Americans have now received at least one dose than have tested positive for the virus since the pandemic began. So far, 35 million doses have been given, according to a state-by-state tally. In the last week, an average of 1.34 million doses per day were administered.
Vaccines Across America
Across the U.S., 10.7 doses have been administered for every 100 people, and 63% of the shots delivered to states have been administered
Alaska leads all states with 17.8 doses administered per 100 people
Race to End the Pandemic
Israel leads all countries with 57.0 doses per 100 people
· AstraZeneca vaccine can slow the spread of Covid, and delayed second dose works, Oxford data shows
The U.K.’s decision to delay the second shot of the AstraZeneca-University of Oxford coronavirus vaccine has been found to be an effective strategy, according to a new study.
Oxford researchers found that the Covid vaccine was 76% effective at preventing symptomatic infection for three months after a single dose, and in fact that the efficacy rate rose with a longer interval between the first and second doses.
A delay in the second dose means more people can get their first vaccines sooner because it eases a tight supply.
· Italy will be in ‘very good hands’ with Mario Draghi at the helm of a new government, former PM says
Italy’s Matteo Renzi believes the country will be in “very good hands” with Mario Draghi after the former European Central Bank chief accepted a mandate to try to form a new government.
Following a meeting with Italian President Sergio Mattarella on Wednesday, Draghi agreed to try to form a national unity government and solve the political impasse that has afflicted Italy for about a month.
· Former ECB chief Mario Draghi accepts task of forming a new Italian government
Famed for rescuing the euro in the grips of a sovereign debt crisis, Mario Draghi is now being asked to help his own country.
The former president of the European Central Bank met Italy’s president, Sergio Mattarella, at lunchtime on Wednesday — a meeting where Draghi was asked to form a technocratic government and solve the ongoing political crisis in Rome over the past month.
· Britain and EU vow to work together to resolve issues around Northern Ireland protocol
· U.S. extends sole nuclear arms control agreement with Russia
Reference: CNBC, Reuters, Worldometers, MarketWatch, FX Empire
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