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Gold edges up as yields ease, focus turns to Fed meeting

· Gold prices rose on Monday as U.S. Treasury yields backed off recent highs and investors awaited cues from the Federal Reserve’s policy meeting.

· Spot gold rose 0.2% to $1,729.94 per ounce by 1:47 pm EDT. U.S. gold futures settled up 0.5% at $1,729.20.

· “Yields are calm this morning and the recent dip in gold is viewed as a buying opportunity by most,” said David Meger, director of metals trading at High Ridge Futures.

· The big question will be whether rising yields, on the back of optimism over an economic recovery, will pressure gold, or if growth stalls or inflation picks up, which should support gold, Meger added

· Benchmark U.S. Treasury yields eased from a more than one-year peak, restoring some of the appeal of non-interest bearing gold.

· “Whenever yields peak, that will be the bottom for gold,” Phillip Streible, chief market strategist at Blue Line Futures in Chicago, said..

“They (yields) still have room to extend higher but yields are not going to go up forever, so there’s going to be a turning point. ... The higher we go, the closer we get to the turning point.”

· Gold also drew support from the signing of a $1.9 trillion U.S. relief bill into law, which spurred inflationary fears, since bullion is used to hedge against rising prices.

· Investors await a two-day Fed meeting that starts on Tuesday, with the focus on a recent spike in bond yields, fears about rising inflation and the economic outlook.

· “Precious metals will be held hostage by Treasury markets as the Fed’s reactive approach to the steepening in rates will continue to lead to investment outflows,” TD Securities said in a note.

· In other metals trading, silver was up 1.1% at $26.20 an ounce. Palladium gained 0.4% to $2,381.65 and platinum rose 0.3% to $1,207.99.

· Why this week’s Fed meeting could be ‘March madness’ for markets

Statement to stay mostly the same

The Federal Open Market Committee will release its statement at 2 p.m. ET Wednesday, after the meeting, and Fed watchers expect little change in the text.

But the Fed also releases officials’ latest forecasts for the economy and interest rates. That could show that most officials would be ready to raise the fed funds target rate range from zero in 2023, and a few members may even be ready to raise rates next year.

Rates on the rise

The Fed meets against a back drop of rate volatility in the more typically staid Treasury market. Over the past six weeks, the 10-year yield, which influences mortgage rates and other loans, has risen from 1.07% to a high of 1.64% last Friday. It was at 1.6% Monday.

The yield, which moves opposite price, has been reacting to a more upbeat view of the economy, based on the vaccine rollout and Washington’s stimulus spending. It has also reacted to the idea that inflation could pick up as the economy roars back. Powell has said the Fed expects to see just a temporary jump in inflation measures in the spring because of the depressed prices during the economic shutdown last year.

Rieder said the Fed could raise interest rates while it is still buying bonds. He said it may want to shift its purchases more towards the long end to keep longer term rates low, since they impact mortgages and other loans.

· Sunak and Yellen discuss possible new allocation of SDRs: UK treasury

British finance minister Rishi Sunak and U.S. Treasury Secretary Janet Yellen spoke on the phone on Monday to discuss a possible new allocation of Special Drawing Rights (SDRs), the UK treasury

Cabana said there could be a few officials who now forecast a hike for 2022, but he doesn’t expect the Fed to embrace that yet. The fed funds futures market is pricing in close to one hike in 2022 and three hikes by the end of 2023.

· U.S. senators urge Biden to drop trade waivers, prioritize U.S. firms in COVID relief effort

· Global daily Covid-19 statistics

COVID-19 infections are still rising in 69 countries.

New infections reported by region

Of every 100 infections last reported around the world, more than 25 were reported from countries in Asia and the Middle East. The region is reporting a million new infections about every 12 days and has reported more than 26,237,000 since the pandemic began.

Global Cases: 120.75 (+327,555)

Global Deaths: 2.67M (+6,330)

No. 1

U.S. Cases: 30.13M (+43,925)

U.S. Deaths: 547,991 (+763)

No. 39

Japan Cases: 447,906 (+1,033)

Japan Deaths: 8,590 (+30)

No. 84

South Korea Cases: 96,017 (+382)

South Korea Deaths: 1,675 (+6)

No.116

Thailand Cases: 27,005 (+78)

Thailand Deaths: 87(+1)

· Norway's capital introduces tightest restrictions of pandemic

· Moderna testing new COVID-19 vaccine as potential booster shot

Moderna Inc said on Monday it had dosed the first patients in an early-stage study of a new COVID-19 vaccine candidate for its potential evaluation as a booster shot.

The company said its new candidate, mRNA-1283, could potentially be stored in refrigerators instead of freezers, making it easier to distribute, especially in developing countries.

The early-stage study will assess the safety and immunogenicity of mRNA-1283 at three dose levels, and will be given to healthy adults either as a single dose or in two doses 28 days apart, the company said.

Last week, Moderna began dosing the first participants in a study testing its COVID-19 booster vaccine candidates.

· Italy prosecutors seize batch of AstraZeneca vaccine after death of man

Prosecutors in the northern Italian region of Piedmont said on Monday they had seized a batch of 393,600 shots of the AstraZeneca COVID-19 vaccine following the death of a man hours after he had received a jab.

The move represents another blow to the image of the AstraZeneca vaccine in Italy and will further hinder the government’s anti-coronavirus inoculation campaign.

· Cyprus suspends AstraZeneca vaccine pending EU agency review

Cyprus' inoculation programme with vaccines from Pfizer/BioNtech and Moderna will continue, the health ministry said. There have been no publicly reported cases of any side effects from the AstraZeneca vaccine in Cyprus.

· Germany, Italy, France suspend AstraZeneca shots amid safety fears, disrupting EU vaccinations

· Australia to proceed with AstraZeneca COVID-19 vaccine despite pause in Europe

· EU regulator to meet on Thursday to discuss AstraZeneca vaccine

· Green light for AstraZeneca vaccine could come in April, independent monitors assessing data -US official

· Brazil signs Pfizer deal for 100 mln vaccine doses -source

· Covid-19 Vaccination

So far 125 countries have begun vaccinating people for the coronavirus and have administered at least 359,263,000 doses of the vaccine.

· The United States reported a 22% decline in deaths from COVID-19 last week, while vaccinations accelerated to a record 2.4 million shots per day, according to a Reuters analysis of state, county and CDC data.

As of Sunday, 21% of the U.S. population has received at least one dose of a vaccine, up from 18% a week ago. About 11% has received two doses, up from 9%, according to the Centers for Disease Control and Prevention.

The number of new COVID-19 cases being reported each week has dropped for nine straight weeks, falling 10% to just under 378,000 in the seven days ended March 14. Deaths linked to COVID-19 dropped below 10,000 last week, the lowest since mid-November.

· U.S. administers 109.1 mln doses of COVID-19 vaccines - CDC

The United States has administered 109,081,860 doses of COVID-19 vaccines in the country as of Monday morning and distributed 135,847,835 doses, the U.S. Centers for Disease Control and Prevention said.

According to the tally posted on March 14, the agency has administered 107,060,274 doses of the vaccines, and distributed 135,847,835 doses.

The agency said 71,054,445 people have received at least one dose, while 38,335,432 people were fully vaccinated as of Monday.

· CDC chief warns of another Covid surge as Americans travel for spring break

· White House says U.S. has reached out to North Korea, received no response

· North Korea warns new U.S. administration if it wants peace it must avoid 'causing a stink': state news agency

· Biden's secretary of state makes overseas debut with visit to Japan, Korea

U.S. Secretary of State Antony Blinken and Defence Secretary Lloyd Austin landed in Tokyo on Monday, starting a four-day visit to the region, highlighting Washington’s renewed focus on alliances in Indo-Pacific in the face of assertive China.

· Britain targets influence in Indo-Pacific as counterweight to China

Britain wants to expand its influence among democratic nations in the Indo-Pacific region while preserving strong ties with the United States, a document laying out the country’s post-Brexit foreign policy priorities will say on Tuesday.

Putting Britain at odds with China, the biggest review of British foreign and defence policy since the end of the Cold War three decades ago will set out how Prime Minister Boris Johnson wants to be at the forefront of a reinvigorated, rules-based international order based on cooperation and free trade.

· Death toll in weeks of Myanmar protests passes 180: activist group

A total of 183 people have been killed by security forces in weeks of protests against the military coup in Myanmar, an activist group said on Monday.

At least 20 people were killed on Monday, the Assistance Association for Political Prisoners said. On Sunday, 74 people died - the bloodiest single day so far.

· U.S. says Myanmar military's violence against protesters is 'immoral and indefensible'

· Air travel jumps as vaccinations spur vacation bookings, stocks surge

Reference: CNBC, Reuters, Worldometers