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Gold recovers from 7-month low but on course for weekly drop

·         Gold prices edged higher on Friday, recovering from a more than seven-month low hit earlier as the U.S. dollar eased, but rising Treasury yields kept bullion on course for its biggest weekly drop since early January.

·         Spot gold was up 0.3% at $1,780.86 per ounce by 02:17 p.m. EST, after falling to its lowest since July 2 at $1,759.29 earlier.

 

The safe-haven metal was down about 2.4% so far this week, its biggest weekly drop since the week of Jan. 8.

·         U.S. gold futures settled up 0.1% at $1,777.40.

·         “The drop in the U.S. dollar has likely driven gold higher,” said Bart Melek, head of commodity strategies at TD Securities, adding the move could also be technical in nature.

 

The dollar was down 0.3% against key rivals and looked set to post its second straight weekly loss.

 

″(However), the problem (for gold) continues to be the yields, and we continue to see rates across the curve move higher,” Melek added.

·         Benchmark U.S. Treasury yields rose to a near one-year high earlier.

 

While gold is seen as an inflation hedge, higher inflation expectations have pushed yields up, increasing the opportunity cost of holding non-yielding bullion.

·         Gold should still benefit from continued loose monetary policy and low real interest rates this year, analysts said.

·         Commerzbank analysts said in a note that gold’s behavior resembled that of a tsunami, with prices receding in the first phase before coming back all the more violently.

·         Autocatalyst metal platinum edged 0.2% higher to $1,277.18 an ounce and was set to post its third straight weekly gain, having risen to a more than six-year peak earlier in the week.

·         Palladium rose 1.1% to $2,376.58 an ounce.

·         Silver rose 0.8% to $27.25, but was set to register a weekly loss.

 

·         U.S. House Democrats advance $1.9 trillion COVID-19 aid bill

President Joe Biden’s push for a $1.9 trillion COVID-19 relief bill took a step forward on Friday as a U.S. House of Representatives committee unveiled the legislation Democrats hope to pass by late next week.

 

·         U.S. Senate to know next week if COVID-19 bill can include minimum wage hike - Sanders

U.S. Senate Budget Committee Chairman Bernie Sanders said on Friday he expects to find out next week whether lawmakers can include a hike in the minimum wage to $15 an hour in the coronavirus relief bill they are racing to pass.

Democrats backing the gradual increase in the wage from the current $7.25 per hour have made their case to the Senate parliamentarian on why it should be included in the $1.9 trillion package addressing the deadly COVID-19 pandemic, according to Sanders.

Senate Majority Leader Chuck Schumer, a Democrat, said on Friday his deeply divided chamber will pass the bill before March 14, when the latest round of federal unemployment benefits expire.

 

·         Fed's Rosengren says large fiscal package appropriate, hopes for full employment within two years

The $1.9 trillion fiscal relief package lawmakers are considering is appropriately large given the pandemic’s effects on the labor market and policymakers will have time to pull back support as the economy approaches full employment, Boston Federal Reserve Bank President Eric Rosengren said on Friday.

“It is a big fiscal package that is being considered right now - I think it’s appropriately big,” Rosengren said in an interview with Reuters. “I am much less concerned than some commentators about it being a problem of overheating the economy.”

 

·         Fed's Williams does not expect economy to overheat due to fiscal aid

New York Federal Reserve President John Williams said on Friday he’s not worried the economy will overheat due to government overspending, adding that employment and inflation are far below levels that would prompt the U.S. central bank to dial back its own support.

“The economy has quite a ways to go to get back to maximum employment, and we have a ways to go to get back to our 2% inflation target, so I’m not really concerned about stimulus, about fiscal support right now being excessive or anything like that,” Williams said on CNBC.

 

·         Economy should surge even absent full herd immunity to coronavirus

The U.S. may struggle to reach full herd immunity from the coronavirus but the economy can probably grow quickly this year even without it, Richmond Federal Reserve president Tom Barkin said on Friday.

 

·         Fed sees 'considerable' risk of ongoing U.S. business failures

The risks of ongoing business failures in the United States “remain considerable” even as the economy emerges from the coronavirus pandemic, the Federal Reserve said on Friday in its semi-annual monetary policy report to Congress.

Business borrowing “now stands near historic highs,” the U.S. central bank said in the report. Even though large cash balances, low interest rates, and renewed economic growth may dampen problems in the near term, “insolvency risks at small and medium-sized firms, as well as at some large firms, remain considerable.”

Fed Chair Jerome Powell will present the report in hearings before the U.S. Senate Banking Committee on Tuesday and the U.S. House of Representatives Financial Services Committee on Wednesday.

 

·         U.S. existing home sales unexpectedly rise in January

U.S. home sales unexpectedly rose in January despite tight inventories boosting house prices.

The National Association of Realtors said on Friday that existing home sales increased 0.6% to a seasonally adjusted annual rate of 6.69 million units last month. Sales have been increasing even as contracts have been declining.

 

·         U.S. factory activity cools; cost pressures mounting

U.S. factory activity slowed in early February likely as a global semiconductor chip shortage hurt production at automobile plants, while prices of inputs and manufactured goods soared, which could heighten fears of strong inflation growth this year.

 

·         CORONAVIRUS UPDATES:
Global Cases: 111.95M
Global Deaths: 2.147M

 

·         U.S. storms delay COVID-19 vaccines in all 50 states: White House

 

·         U.S. extends travel restrictions at land borders with Canada, Mexico through March 21

 

·         UK to reopen in stages after driving down South African variant, Hancock says

 

·         UK speeds up vaccinations: All adults get 1st jab by July 31

 

·         New Zealand begins COVID-19 vaccinations programme, Australia starts Monday

 

·         Spain close to vaccinating all nursing-home residents, on track for summer goals

 

·         Poland considering COVID-19 restrictions at Czech, Slovak borders: minister

 

·         Pandemic will not end until world is vaccinated, Merkel says

 

Germany and other wealthy countries may need to give some of their own stock of vaccines to developing countries in addition to money, since only vaccinating the whole world will end the coronavirus pandemic, Chancellor Angela Merkel said on Friday.

 

·         Pfizer promises to double supply as Biden pushes for quicker vaccine rollout

 

·         Pfizer seeks to store vaccine at higher temperatures, easing logistics

 

·         Russian Prime Minister Mikhail Mishustin says country has approved its third Covid vaccine

Russia on Saturday approved a third coronavirus vaccine for domestic use, Prime Minister Mikhail Mishustin said on state TV, though large-scale clinical trials of the shot, labelled CoviVac and produced by the Chumakov Centre, have yet to begin.

Russia has already approved two Covid-19 vaccines, including the Sputnik V shot, developed by Moscow’s Gamaleya Institute, following a similar approach of granting approval before seeing any late-stage trial results.

The preemptive approvals had raised concerns among some scientists in the West, but inoculations with those first two shots began on a mass scale in Russia only after trials were concluded and showed success.

Sputnik V was approved in August and late-stage trials began in September. Mass vaccination was launched in December, after preliminary trial results showed the vaccine to be 91.4% effective.

Since then, more than two million Russians have been vaccinated with at least the first dose of Sputnik V, Health Minister Mikhail Murashko said on Feb. 10.

Rollout of a second vaccine, developed by the Vector Institute in Novosibirsk, is beginning.

 

·         Russia to produce 88 million COVID-19 vaccine doses in first half: deputy PM

 

 

·         First month of shots find no safety issues with Pfizer/BioNTech, Moderna vaccines: U.S. data

The two COVID-19 vaccines approved for use in the United States have reassuring safety profiles with no concerning new issues found in data collected from the first month of vaccinations, the U.S. Centers for Disease Control and Prevention (CDC) said on Friday.

After administration of 13.8 million doses of the Pfizer/ BioNTech and Moderna Inc vaccines to the U.S. population, most reports indicated non-serious side effects of the type that had been expected, such as headaches and fatigue. No deaths have been attributed to the vaccines, the data showed.

 

 

·         Argentina health minister resigns after reports of VIP vaccine access

 

·         Eurogroup chief says debt can't be reduced without solid recovery

 

·         G7 to focus on rebuilding world economy, UK PM Johnson says

 

·         G7 says to counter 'non-market' policies from China to ensure free trade

Group of Seven leaders on Friday said they would seek a collective approach to China to counter “non-market oriented” policies and practices and to ensure a fair multilateral global trade.

“With the aim of supporting a fair and mutually beneficial global economic system for all people, we will engage with others, especially G20 countries including large economies such as China,” the G7 said after a virtual leaders’ meeting.

“As leaders, we will consult with each other on collective approaches to address non-market oriented policies and practices, and we will cooperate with others to address important global issues that impact all countries.”

The G7 said it would deepen cooperation on the health response to COVID-19 and explore a global health treaty.

 

·         Biden approves major disaster declaration for Texas - FEMA

President Joe Biden has approved a major disaster declaration for Texas which has suffered widespread power blackouts and water shortages during a deep freeze, the Federal Emergency Management Agency said on Saturday.

The action makes federal funding available to individuals across the state, including assistance for temporary housing and home repairs and low-cost loans.

 

·         China's rise to define transatlantic ties, NATO chief says

NATO Secretary-General Jens Stoltenberg called on Friday for Europe, Canada and the United States to uphold the international rules-based order that Russia and China are challenging, and described Beijing’s rising power as a defining issue.

The growing power of China is reshaping the priorities of the Atlantic alliance, which traditionally focused on the threat from Russia but now is seeking a consensus among Western nations that Beijing is no longer a benign trading partner.

 

·         Biden says U.S. and Europe must push back against China’s economic ‘abuses and coercion’

President Joe Biden said Friday that the U.S. and its international partners must hold China to account for its economic practices.

“We have to push back against the Chinese government’s abuses and coercion that undercut the foundations of the international economic system,” Biden said in a speech to the Munich Security Conference, delivered virtually from the White House.

 

·         U.S. concerned China's new coast guard law could escalate maritime disputes

The United States is concerned by China’s recently enacted coast guard law and that it could escalate maritime disputes and be invoked to assert unlawful claims, the U.S. State Department said on Friday.

China, which has maritime sovereignty disputes with Japan in the East China Sea and with several Southeast Asian countries in the South China Sea, passed a law last month that for the first time explicitly allows its coast guard to fire on foreign vessels.

 

 

·         FTSE Russell to include 11 stocks from China's STAR Market in global benchmarks

The 11 stocks include Raytron Technology Co Ltd, Zhejiang HangKe Technology Co Ltd, Montage Technology Co Ltd, Advanced Micro-Fabrication Equipment Inc China.

 

·         Russia working on oil industry support after tax hikes, says deputy PM Novak

The government has been increasing oil producers’ taxes to raise money to cushion the economy from fallout from the COVID-19 pandemic. This year, a tax hike is expected to result in the industry paying an additional 227 billion roubles ($3 billion), 361 billion roubles in 2022 and 242 billion roubles in 2023.

Novak told the energy ministry’s in-house magazine that the government has tried to find ways to support the industry.

 

 

·         Biden administration designates Russian ship as helping to build Nord Stream 2 pipeline