MTS Help Center

Gold slips as U.S. yields spike; palladium at 1-year peak

·         Gold prices dropped on Thursday as a surge in U.S. bond yields and a firmer dollar hammered bullion’s appeal, while palladium jumped as much as 7% on strong demand prospects amid supply disruption worries.

·         Spot gold was down 0.7% at $1,732.99 an ounce, after touching its highest since March 1 at $1,755.25. U.S. gold futures settled up 0.3% at $1,732.50.

·         The benchmark U.S. 10-year Treasury yield vaulted above 1.74% for the first time since January 2020, while the dollar rose 0.5%.

·         Federal Reserve Chairman Jerome Powell on Wednesday repeated a pledge to hold interest rates near zero in an effort to keep the economic recovery on track even if inflation breached its 2% target this year.

·         “Yesterday’s Powell comments on interest rates were very supportive for gold, but on the other side of the coin the fact that 10-year yields continue to rise has limited any upside in gold,” said Bob Haberkorn, senior market strategist at RJO Futures.

·         Some investors view gold as a hedge against higher inflation that could follow stimulus measures, but higher Treasury yields dull some of the appeal of the non-yielding commodity.

·         “On one hand, the regime doesn’t bode well for investment flows into gold, and that creates pressure to the downside. On the other hand, we do see some buyers on the dip,” TD Securities commodity strategist Daniel Ghali said.

·         Autocatalyst metal palladium was up 3.6% at $2,662.17, after earlier hitting its highest since February 2020 at $2,755.18.

·         Russia’s Nornickel Nickel , the top producer of palladium, cut its 2021 output forecast on Tuesday because of waterlogging at two Siberian mines.

·         “Any disruption in supply, especially out of a major producer, is absolutely playing into this market, along with expectations of more demand from the automobile sector,” RJO Futures’ Haberkorn said.

·         Platinum gained 0.4% to $1,218.23, while silver fell 0.4% to $26.22.

·         U.S. weekly jobless claims increase; mid-Atlantic factory activity near 50-year high

The number of Americans filing new claims for unemployment benefits unexpectedly rose last week, but the labor market is regaining its footing as an acceleration in the pace of vaccinations leads to more businesses reopening.

Initial claims for state unemployment benefits increased 45,000 to a seasonally adjusted 770,000 for the week ended March 13, from 725,000 in the prior week, the Labor Department said. Data for the prior week was revised to show 13,000 more applications received than previously reported.

 

STRONG MANUFACTURING

In a separate report on Thursday, the Philadelphia Federal Reserve said its business conditions index surged to a reading of 51.8 this month, the highest since April 1973, from 23.1 in February. Measures of new orders and shipments at factories in the region that covers eastern Pennsylvania, southern New Jersey and Delaware also soared.

Still, strong manufacturing aligns with expectations that economic growth this year could be as high as 7%. That would be the strongest since 1984 and would follow a 3.5% contraction last year, the worst performance in 74 years.

 

·         Fed Chair Powell to give speech on Monday, testify Tuesday and Wednesday

Federal Reserve Chair Jerome Powell is scheduled to speak Monday at a Bank for International Settlements conference on innovation in the digital age, the U.S. central bank said on Thursday.

On Tuesday, Powell will testify before the House of Representatives Financial Services Committee, and on Wednesday he will testify before the Senate Banking Committee, on the Coronavirus Aid, Relief, and Economic Security Act, the Fed said. The appearances come after the Fed signaled Wednesday that it will hold rates at their current near-zero level through 2023, even as policymakers boosted their forecasts for economic growth and inflation.

 

·         Fitch sees Fed tapering in early 2022, warns on fragile emerging markets

 

·         Top American, Chinese diplomats clash publicly at start of first talks of Biden presidency

The United States and China leveled sharp rebukes of each others’ policies in the first high-level, in-person talks of the Biden administration on Thursday, with deeply strained relations of the two global rivals on rare public display during the meeting’s opening session in Alaska.

The United States, which quickly accused China of “grandstanding” and violating the meeting’s protocol, had been looking for a change in behavior from China which had earlier this year expressed hope for a reset to sour relations.

 

·         U.S. expects talks with China will be 'pretty tough' -official

The United States expects talks with China on Thursday and Friday in Alaska will be “pretty tough,” but there will be a genuine attempt to find areas where the two countries can work together, a senior U.S. administration official said.

“We’re expecting much of these conversations will be pretty, pretty tough,” the official told reporters ahead of the talks between U.S. Secretary of State Antony Blinken and national security adviser Jake Sullivan and China’s top diplomat, Yang Jiechi, and State Councilor Wang Yi in Anchorage.

“There’s clearly ... some serious areas of difference, but perhaps this is a bit different from ... the previous administration. I think there’s also ... a genuine attempt to find possible areas where we can work together,” the official said.

Citing climate change, the official said the United States “will be looking in earnest for some areas where we are going to be able to work with our Chinese friends.”

·         U.S. tells China it does not seek conflict; but will stand up for principles, friends

 

·         New U.S. trade chief Tai to speak next week with British counterpart: sources

 

·         CORONAVIRUS UPDATES:

COVID-19 infections are still rising in 72 countries.

 

Global Cases: 122.35 (+539,757)
Global Deaths: 2.70M (+10,400)

 

 No. 1

U.S. Cases: 30.35M (+60,981)

U.S. Deaths: 552,303 (+1,672)

 

No.116

Thailand Cases: 27,494 (+92)

Thailand Deaths: 89 (+1)

 

·         Vaccination

So far 132 countries have begun vaccinating people for the coronavirus and have administered at least 400,195,000 doses of the vaccine.

 

·         Biden administration eyes mid-May to begin relaxing Covid travel restrictions, sources say

 

The relaxation of restrictions would involve travel across the Mexican and Canadian borders and on inbound travel from the U.K., Europe and Brazil, two sources told CNBC.

 

·         U.S. to share 4 million doses of AstraZeneca COVID-19 vaccine with Mexico, Canada

 

·         Mexico to tighten borders against COVID-19 as U.S. offers vaccine help

 

·         EU threatens tighter COVID vaccine exports as internal feuds deepen

 

·         Britain warns of consequences if EU breaks law on vaccine contracts

 

  

·         EU's drug regulator backs AstraZeneca vaccine after safety investigation

 

 

·         Germany, France among nations to resume use of AstraZeneca vaccine after regulators back shot

 

·         Spain to resume use of AstraZeneca's coronavirus vaccine on Wednesday

 

 

·         Paris goes into lockdown as COVID-19 variant rampages

 

·         Brazil struggles with lack of ICU doctors as pandemic worsens

 

·         BOJ to loosen grip on yields, lay groundwork for 'stealth' tapering

 

The Bank of Japan will unveil on Friday a raft of measures to loosen control over asset price moves and make its ultra-easy policy more sustainable, as the economic damage wrought by the coronavirus pandemic prolongs its battle to fire up inflation.

 

 

·         Bank of England keeps policy unchanged and follows Fed with dovish tone

The Bank of England held interest rates steady on Thursday and mirrored the dovish tone set by the U.S. Federal Reserve on the prospect of future tightening of monetary policy.

The central bank’s Monetary Policy Committee voted unanimously to keep its main lending rate at 0.1% and maintain its target stock of asset purchases at £895 billion ($1.2 trillion).

It comes as bond yields around the world have moved higher on expectations of rising inflation, and the possibility that central banks could tighten monetary policy sooner than expected. On Wednesday, however, U.S. Federal Reserve Chair Jerome Powell said the Fed does not intend to hike interest rates through 2023, and the Bank of England struck a similar tone Thursday.

·         UK consumer morale leaps in March to hit one-year high: GfK

·         U.S. warns companies to abandon work on Nord Stream 2 pipeline as Biden reportedly weighs sanctions

·         Military tightens grip in Myanmar as more international sanctions loom

The total toll of those killed in the weeks of unrest rose to 224, the Assistance Association for Political Prisoners activist group said. A total of 2,258 people had been arrested, charged or sentenced, it said.

·         Ousted Myanmar lawmakers consider International Criminal Court, says U.N. envoy

 

Reference: CNBC, Reuters, Worldometers