MTS Help Center

Gold recoups losses as U.S. yields slip after CPI data

 

·         Gold erased earlier losses to hit a one-week high on Wednesday, as U.S. Treasury yields eased after subdued inflation data.

 

·         Spot gold rose 0.5% to $1,723.01 per ounce by 1:59 p.m. EDT (1859 GMT), having bounced as much as $1,723.71, its highest since March 3.

 

·         U.S. gold futures settled 0.3% up at $1,721.80.

 

·         "Gold is still taking cues from the Treasury market and today's data lessens worries about near-term inflation," said Edward Moya, senior market analyst at OANDA.

 

·         "If today's 10-year note sale has decent demand, gold prices could eventually make a run towards $1,730. ... The $1,700 level will provide key support ... but that should hold unless the bond market sell-off resumes," Moya said.

 

·         10-year U.S. Treasury yields dropped after data showed U.S. consumer prices increased in February, though underlying inflation remained tepid.                  

 

·         Gold's status as an inflation hedge has been challenged by higher bond yields, which translate into a higher opportunity cost of holding non-yielding bullion.

 

·         Prices fell to their lowest in nine-months on Monday, at $1,676.10.

 

·         Real rates have risen sharply over the last few weeks due to higher nominal rates, without a commensurate rise in inflation expectations, TD Securities wrote in a note.

 

·         "With massive Treasury issuance on the horizon, the pressure on higher rates should continue to weigh on precious metals in the near-term."

 

·         The U.S. House of Representatives paved the way for a $1.9 trillion U.S. COVID-19 relief bill to be considered on Wednesday.     

 

·         The European Central Bank is also grappling with a recent rise in yields, but policymakers remain divided on large-scale market intervention ahead of a policy meeting on Thursday.

 

·         U.S. house passes $1.9 trillion relief package

 

Congress approves $14 billion more for airlines in new aid package

 

Congress approved $14 billion for U.S. airlines’ labor costs as part of the $1.9 billion aid package Congress passed Wednesday. In exchange for this third round of federal payroll support, airlines are prohibited from cutting jobs or workers’ pay rates through Sept. 30.

Stimulus bill gives nearly $40 billion to higher education

President Biden is expected to sign a $1.9 trillion stimulus bill that includes nearly $40 billion for higher education by the weekend.

The legislation extends the Higher Education Emergency Relief Fund through September 2023, gives financial assistance to colleges and universities that do not have endowments worth over $1 million and supports emergency need-based financial aid for college students.

 

·         U.S. consumer prices rise; underlying inflation muted for now

U.S. consumer prices increased solidly in February, with households paying more for gasoline, but underlying inflation remained tepid amid weak demand for services like airline travel and hotel accommodation.

The mixed report from the Labor Department on Wednesday did not change expectations that inflation will push higher and exceed the Federal Reserve’s 2% target, a flexible average, by April as declining COVID-19 infections and a faster pace of vaccinations allows the economy to reopen.

Inflation is also seen accelerating as price decreases early in the coronavirus pandemic wash out of the calculations. Many economists, including Fed Chair Jerome Powell expect the strength in inflation will not stick beyond the so-called base effects and the reopening of services businesses.

The consumer price index increased 0.4% last month after rising 0.3% in January. A 6.4% advance in gasoline prices accounted for more than half of the gain in the CPI.

The core CPI rose 1.3% on a year-on-year basis, retreating from January’s 1.4% gain. The Fed tracks the core personal consumption expenditures (PCE) price index for its inflation target. The U.S. central bank has signaled it would tolerate higher prices after inflation persistently undershot its target. The core PCE price index is at 1.5%.

 

·         U.S. 10-year yield could spike ‘well above’ 2% in the next three months, strategist says

The 10-year U.S. Treasury yield is likely to hit 2% by the end of the year but could spike “well above” that in the second quarter, according to ING senior rates strategist Antoine Bouvet.

 

·         Global daily statistics

COVID-19 infections are still rising in 60 countries.

 

 

New infections reported by region

Of every 100 infections last reported around the world, more than 16 were reported from countries in Asia and the Middle East.

 

Global Cases: 118.61 (+458,131)

 

Global Deaths: 2.63M (+9,777)

No. 1

 

U.S. Cases: 29.85M (+57,693)

U.S. Deaths: 542,033 (+1,452)

 

 

 

No. 2

 

India Cases: 11.28M (+22,841)

India Deaths: 158,213(+134)

 

No.3

 

Brazil Cases: 11.20M (+80,955)

Brazil Deaths: 270,917 (+2,349)

 

No.4

 

Russia Cases: 4.35M (+9,079)

Russia Deaths: 90,275 (+466)

 

No.5

 

UK Cases: 4.23M (+5,926)

 

No.116

 

Thailand Cases: 26,540 (+39)

Thailand Deaths: 85

 

North America sees drop in Covid-19 cases, Brazil surge worrying, says PAHO

Brazil reported a record 1,972 deaths from Covid-19 in 24 hours on Thursday. Brazil has the second-highest total number of deaths behind the United States.

The United States and Canada continue to see a drop in new cases of Covid-19, the Pan American Health Organization (PAHO) said.

 

·         Fauci warns progress is slowing

White House Chief Medical Advisor Dr. Anthony Fauci said Covid-19 cases in the U.S. may level off again at very high volume, even as the nation rapidly administers three vaccines.

The decline in cases seen since early January now appears to be “going down a little more slowly,” Fauci told the Center for Strategic and International Studies, a D.C.-based think tank. That means the U.S. might “plateau again at an unacceptably high level,” he added.

Fauci urged Americans to wear masks, social distance and get vaccinated, saying the virus cannot mutate if it can’t infect hosts and replicate.

 

·         Maryland governor lifts restrictions on gyms, restaurants and other businesses

Maryland Gov. Larry Hogan lifted restrictions on gyms, restaurants and other nonessential businesses in the state, becoming the latest state to eliminate capacity limits as Covid cases slow.

Effective Friday at 5 p.m., capacity limits will be lifted for outdoor and indoor dining, retailers, religious facilities, hair and nail salons, casinos and other recreational businesses. Larger event spaces can reopen at 50% capacity.

 

·         Fraud, airport delays spur move for secure COVID-19 test document

At one of the world’s busiest airports, immigration officials are uncovering fake COVID-19 test results daily by checking the required documentation for misplaced letters and errant vowels.

 

·         UK COVID-19 variant has significantly higher death rate, study finds

A highly infectious variant of COVID-19 that has spread around the world since it was first discovered in Britain late last year is between 30% and 100% more deadly than previous dominant variants, researchers said on Wednesday.

 

·         Britain denies ‘completely false’ EU claims as a new vaccine dispute boils over

The European Union and the United Kingdom have clashed over the export of coronavirus vaccines, with Britain fiercely denying it has blocked any shipments to other nations.

The latest battle emerged after European Council President Charles Michel accused the U.K. on Tuesday of having an “outright ban” on exports of Covid-19 vaccines.

 

·         Biden administration will hold its first high-level meeting with Chinese officials in Alaska next week

For the first time since President Joe Biden took office, senior U.S. officials will hold high-level, in-person talks with Chinese representatives next week in Alaska.

Secretary of State Antony Blinken and national security advisor Jake Sullivan will meet in Anchorage, Alaska, on March 18 with the People’s Republic of China’s Yang Jiechi, a member of the Communist Party’s top decision-making body, and Wang Yi, the foreign minister.

 

·         Mortgage refinance demand plunges 43% from a year ago, as higher interest rates take their toll on borrowers

Reference: CNBC, Worldometers, Investing, Reuters