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Gold eases as dollar recovers lost ground, investors gauge Powell testimony

·         Gold edged lower in choppy trade on Tuesday as the dollar recovered ground lost in the immediate wake of comments from U.S. Federal Reserve Chairman Jerome Powell, who said the economic recovery was “uneven and far from complete.”

·         Spot gold was down 0.3% at $1,803.62 an ounce by 2:10 p.m. EST, after briefly moving into positive territory as the dollar dipped following Powell’s comments.

·         U.S. gold futures settled down 0.1% at $1,805.90.

·         Powell said it will be “some time” before the Fed considers changing policies it adopted to help the economy get back to full employment and he “does not expect inflation to rise to troubling levels.”

·         “There’s been a little volatility around Powell’s Senate appearance but he hasn’t really said anything to rock the boat,” OANDA analyst Craig Erlam said. “Despite the volatility, we haven’t seen any significant directional movement in yields or the dollar, which is why gold is only marginally lower, a reflection of the dollar being a little higher.”

·         The dollar index crawled back up 0.2%, moving away from near a six-week low, making gold more expensive for holders of other currencies.

·         But gold might not reverse course to gain substantially “until we get a real spike in inflation expectations or a Fed that talks about controlling the yield curve,” said IG Market analyst Kyle Rodda.

·         Rising yields have challenged bullion’s appeal as an inflation hedge, since they increase the opportunity cost of holding gold.

·         Gold jumped 1.5% on Monday as prospects of rising inflation triggered equity valuation concerns and drove investors toward the safe-haven metal.

·         Silver dropped 2.4% to $27.49 an ounce, having earlier hit a three-week peak at $28.31.

·         Platinum slipped 3.3% to $1,230.54, after touching a more than one-week low earlier in the session.

·         Palladium lost 2% to $2,349.26.

  

·         Powell Pledges to Maintain Economic Support

Jerome H. Powell, the chair of the Federal Reserve, told lawmakers that the economic rebound from the pandemic recession had further to go and reiterated that the central bank planned to keep up its growth-stoking policies, which include rock-bottom interest rates and large-scale bond buying.

* Fed Chairman Jerome Powell characterized inflation as “soft” for the most part and said the employment picture still needs help.

* The pandemic has “left a significant imprint on inflation” and it price pressures are not a threat now, he told the Senate Banking Committee.

 

·         $400 unemployment boost: Republicans revive anxiety over the effect on jobs

Congressional Republicans are raising alarms over a $400 weekly boost to unemployment benefits proposed by Democrats and President Joe Biden. However, some experts signal those warning bells may be premature.

Those additional relief payments would raise federal spending by about $163 billion through 2022, according to a cost estimate the Congressional Budget Office issued last week.

GOP members of the House Budget Committee said Monday that extra jobless benefits offer an incentive for workers to stay home rather than find a job.

That’s because many Americans would earn more from unemployment benefits than they did at work, said Rep. Jason Smith, R-Mo., ranking member of the Budget Committee.

It’s the same argument Republican lawmakers used against a prior $600-a-week enhancement to benefits.

 

“This is the wrong plan for America’s working class,” Smith said during a hearing on a $1.9 trillion Covid relief bill that Democrats are aiming to pass by mid-March, before unemployment benefits lapse for millions of people.

 

·         U.S. consumer confidence improves as COVID-19 cases fall; house prices accelerate

U.S. consumer confidence increased in February, with households slightly more upbeat about the labor market amid declining new COVID-19 infections and expectations for additional money from the government to help the economy’s recovery from the pandemic.

The Conference Board said its consumer confidence index rose to a reading of 91.3 this month from 88.9 in January. Confidence remains well below its lofty reading of 132.6 last February.

 

·         Vaccination

So far 92 countries have begun vaccinating people for the coronavirus and have administered at least 212,085,000 doses of the vaccine.

 

·         CORONAVIRUS UPDATES: COVID-19 infections are still rising in 45 countries.

Global Cases: 112.62 (+358,266)

Global Deaths: 2.49M (+9,753)

 

No. 1

U.S. Cases: 28.89M (+66,361)

U.S. Deaths: 514,730 (+2,137)

 

No. 2

India Cases: 11.02M (+13,463)

India Deaths: 156,598(+100)

 

No. 3

Brazil Cases: 10.26M (+63,090)

Brazil Deaths: 248,646 (+1,370)

 

No.114

Thailand Cases: 25,599 (+95)

Thailand Deaths: 83

 

·         Fauci says he sees U.S. CDC relaxing some COVID-19 guidelines soon: CNN

 

·         FDA to allow Pfizer-BioNTech vaccine to be stored at higher temps: NYT

he U.S. Food & Drug Administration plans to approve Pfizer Inc and BioNTech SE’s request to store their COVID-19 vaccine at standard freezer temperatures instead of in ultra-cold conditions, the New York Times reported on Tuesday.

The FDA is expected to announce the new guidance to the providers as early as Tuesday, modifying documents related to the emergency use authorization that was previously granted for the vaccine, the NYT report said, citing people familiar with the matter.

 

·         AstraZeneca to miss second-quarter EU vaccine supply target by half - EU official

AstraZeneca expects to deliver less than half the COVID-19 vaccines it was contracted to supply the European Union in the second quarter, an EU official told Reuters on Tuesday.

 

·         EU to keep COVID-19 curbs on non-essential travel amid chaotic border measures

 

·         Bank of Canada sees economy strengthening as inoculations pick up

 

·         Portugal's COVID-19 nightmare eases but end of lockdown still out of sight

 

·         Yellen says to work with Italy, G20 on improving low-income country support

 

·         Iran's rulers close ranks, raise pressure on Biden to lift sanctions

An Iranian state newspaper, taking aim at hardline lawmakers’ intervention in Tehran’s nuclear row with the West, warned on Tuesday that overly radical actions may lead to Iran’s isolation after a new law ended snap inspections by U.N. inspectors.

 

 

Reference: CNBC, Reuters, Worldometers, New York Time