Gold holds near multi-month lows as U.S. yields advance
Gold lingered near 11-week lows in choppy trading on Thursday as investor optimism for a global economic recovery raised U.S. Treasury yields and made the precious metal less attractive.
Spot gold inched 0.1% lower to $1,774.21 per ounce at 1:45 p.m. EST (1845 GMT), near its lowest since Nov. 30 at $1,767.20, hit earlier.
U.S. gold futures settled up 0.1% at $1,775.
· Recent U.S. data, including manufacturing numbers from the New York Federal Reserve and separate economic readings from the Philadelphia Fed, were very strong and showed “things are starting to come back from the coronavirus slump,” said Bob Haberkorn, senior market strategist at RJO Futures.
But some bargain hunting, given gold’s dip below $1,800 and the lower dollar, did prompt an initial bounce in gold from recent lows, Haberkorn said.
Also providing a floor to bullion, the U.S. Federal Reserve on Wednesday reiterated its pledge to keep interest rates near zero until inflation and employment pick up.
· Gold’s reaction to an unexpected increase in weekly jobless claims on Thursday was also relatively muted, with U.S. Treasury yields rising amid signs of an economic upswing.
· Higher yields have eroded gold’s appeal as an inflation hedge of late, since they increase the opportunity cost of holding the non-yielding bullion.
· Gold is having a tough time trying to win over investors as an inflation hedge, with other assets favoured instead, said FXTM market analyst Han Tan.
On the technical front, a dip in gold’s 50-day moving average below the 200-day moving average could lead to more selling, analysts said.
· Auto-catalyst metal platinum gained 1.1% to $1,266.71 per ounce.
· “As long as data such as auto sales and production continues to be positive, that will help the message that platinum should be one of the winners from the industrial cycle strengthening,” said independent analyst Robin Bhar.
· Elsewhere, palladium fell 0.7% to $2,355.55 and silver lost 1.2% to $27.01.
· Dollar slips in risk-off session, cryptocurrencies scale new heights
Bitcoin backed away from its record high of $52,640 reached overnight.
The dollar index was off 0.33% at 90.601 following two straight days of gains.
The euro gained 0.38% to $1.2086 after sliding 0.5% overnight, the most in two weeks.
The yen gained some ground against the greenback and was last almost flat at 105.685, but still below its 200-day moving average.
Sterling advanced 0.77% against the dollar and was last at 1.397, and hit a high against the euro of 86.525 pence. The pound is the best-performing G10 currency against the dollar this year.
· 10-year Treasury yield struggles to push beyond 1.30% as bond-market selloff takes a pause
· Jobless claims show unexpected move higher
New claims totaled 861,000, the highest level in a month and above the Dow Jones estimate of 773,000, the Labor Department reported Thursday.
A separate report Thursday saw January housing starts fall 6%, more than expected, but building permits surged 10.4%, easily above Wall Street estimates.
· Treasury Secretary Janet Yellen makes push for major stimulus, sees bigger risk to not doing enough
Treasury Secretary Janet Yellen on Thursday said a large stimulus package is still necessary to get the economy back to full strength, despite momentum suggesting that growth is off to a faster start than anticipated in 2021.
In a CNBC interview, the lead economic official in the Biden administration said the $1.9 trillion proposal could help the U.S. get back to full employment in a year.
· Yellen says investors should be very careful with some sectors, calls bitcoin ‘highly speculative’
Yellen did not specify which sectors she was referring to.
· CORONAVIRUS UPDATES:
Global Cases: 110.81M (+392,307)
Global Deaths: 2.451M (+11,205)
No.1
U.S. Cases: 28.51M (+63,600)
U.S. Deaths: 505,031 (+2,483)
No.2
India Cases: 10.96M (+12.643)
No.3
Brazil Cases: 4.12M (+13,447)
No. 37
Japan Cases: 420,408 (+1,393)
Japan Deaths: 7,196 (+94)
No.114
Thailand Cases: 25,111 (+150)
Thailand Deaths: 82
· Vaccination
So far 85 countries have begun vaccinating people for the coronavirus and have administered at least 187,892,000 doses of the vaccine.
· Biden to pledge billions in aid toward global Covid vaccination efforts
President Joe Biden is expected to announce Friday that the U.S. will spend $4 billion on international Covid vaccination efforts, White House officials said.
Biden, during his first virtual meeting as president with G7 leaders, will also spur other nations to pledge more money toward the global fight against the pandemic, the officials told reporters in a conference call Thursday afternoon.
· UK PM Boris Johnson to call on G-7 support for 100-day target to develop new vaccines
· Rich nations stockpiling a billion more COVID-19 shots than needed: report
· AstraZeneca vaccine faces resistance in Europe after health workers suffer side-effects
· Bill Gates says J&J and Novavax Covid vaccines have ‘a lot of capability’ against variants
Bill Gates told CNBC that Johnson & Johnson’s and Novavax’s vaccines will still be essential tools against new, emerging variants of the coronavirus — even though the companies have said their shots may be less potent against a strain found in South Africa.
Novavax said on Jan. 28 that its vaccine was nearly 90% effective in protecting against Covid-19 in its phase three trial conducted in the U.K. but had a muted response in South Africa, with an efficacy rate of just 49.4% among 44 cases in the country. A day later, J&J said its vaccine was 66% effective overall, but just 57% effective in South Africa, where strain B.1.351 is rapidly spreading.
Gates, whose foundation has donated millions to coronavirus vaccine and treatment research, told CNBC that the two vaccines, which have not yet been authorized for use in the United States, can be effective against coronavirus mutations.
Gates’ comments come as U.S. officials push Americans to get vaccinated as quickly as possible before potentially new and even more dangerous variants of the virus emerge.
· Pfizer study deals new blow to South Africa's vaccine hopes
Scientists will meet on Thursday to advise South Africa’s government on its next steps after a study suggested the dominant local coronavirus variant may reduce antibody protection from Pfizer’s COVID-19 vaccine by two-thirds.
The laboratory study, published in the New England Journal of Medicine, dealt a new blow to the country hardest-hit by the pandemic on the African continent.
· Pfizer starts testing its vaccine in pregnant women
· Cutting China off from the U.S. would cost America hundreds of billions of dollars, report says
The U.S. economy could lose more than $1 trillion worth of production and long-term global competitiveness if the White House pursues a sharp separation with China, according to a report released Wednesday by the U.S. Chamber of Commerce and Rhodium Group.
· Japan's consumer price decline slows, weak demand keeps outlook murky
· Power restored to many in Texas, but freezing temperatures remain
· NATO announces expanded mission in Iraq on the heels of deadly rocket attack
NATO Secretary-General Jens Stoltenberg announced Thursday that the 30-member alliance will expand its security training mission in Iraq in order to prevent the war-torn country from becoming a safe haven for international terrorists.
· UK and Canada sanctions Myanmar generals after military coup
Reference: CNBC, Reuters, Market Watch, Worldometers
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