MTS Help Center

Gold shrugs off higher dollar after Powell testimony

·         Gold gained on Wednesday, taking an uptick in U.S. Treasury yields and the dollar in stride, as the safe-haven metal drew support from Federal Reserve Chair Jerome Powell’s repeated calls to keep low-interest rates pinned near zero.

·         Spot gold rose 0.4% to $1,733.39 per ounce by 4 p.m. EDT (1754 GMT). U.S. gold futures settled 0.5% up at $1,733.20.

·         “The Fed said that despite the fact that we could see some higher inflation, they will look past it so that ultimately means we could see a spike in inflation and the Fed remaining on the sidelines ... those factors are helping gold here,” said Bart Melek, head of commodity strategies at TD Securities.

 

Fed chair Powell told lawmakers on Tuesday he expected some inflation but that would be “neither particularly large nor persistent.” The U.S. central bank pledged to keep interest rates anchored near zero in its policy meeting last week.

 

Gold’s gains came despite the dollar ticking up. A stronger dollar makes holding gold more expensive for other currency holders.

·         While gold could rise to $1,900 again, a strong dollar, which is unlikely to weaken in the near term given lockdowns in Europe and the potential outperformance of the United States versus other economies, remains a headwind for gold, Melek added.

·         Higher yields have also challenged gold’s status as an inflation hedge since they translate into higher opportunity costs of holding the non-yielding commodity.

·         Gold is unlikely to move out of the $1,700-to-$1,750 range until later in the year when growth and inflation likely stalls with investors likely favoring assets and commodities that track higher inflation until then, said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

·         Elsewhere, palladium gained 1.2% to $2,635.19 per ounce and silver rose 0.2% to $25.12. Platinum climbed 0.4% to $1,172.82.

 

 

·         Elon Musk says people can now buy a Tesla with bitcoin

 

 

·         Central bank of the year: The Federal Reserve System Overwhelming Fed interventions in March 2020 forestalled a damaging global financial crisis, as policy overhaul prompts introspection in Europe and Japan

Lockdowns and other measures undertaken to contain the Covid-19 pandemic in 2020 sparked the worst economic crisis since the Great Depression, according to International Monetary Fund chief Kristalina Georgieva. It is hard to imagine, given the human suffering and economic fallout, but the situation could have been even worse, had a crisis taken hold in financial markets, as seemed likely in March 2020.

That financial markets did not completely break down was primarily due to the actions of one central bank, the US Federal Reserve. Under the stewardship of its chairman, Jerome Powell, the Fed acted rapidly and boldly to avert a meltdown – not just in the US, but in markets across the world.

The Fed pulled out all the stops in its efforts to shore up US dollar liquidity. And it did so extraordinarily quickly.

 

·         U.S. Durable Goods Orders Decrease for First Time Since April

Orders for U.S. durable goods unexpectedly declined in February for the first time in nearly a year, indicating a pause in the months-long manufacturing rebound.

Bookings for durable goods -- or items meant to last at least three years -- decreased 1.1% from the prior month, the first drop since April, after an upwardly revised 3.5% gain in January, Commerce Department figures showed Wednesday.

Core capital goods orders, a category that excludes aircraft and military hardware and is seen as a barometer of business investment, dropped 0.8% after an upwardly revised 0.6% gain. The median estimates in a Bloomberg survey of economists called for 0.5% increases in both total durables orders and core capital goods bookings.

 

·         CORONAVIRUS UPDATES:

COVID-19 infections are still rising in 82 countries.

 

Global Cases: 125.40 (+570,788)

Global Deaths: 2.75M (+10,128)

 

No. 1

U.S. Cases: 30.70M (+65,755)

U.S. Deaths: 558,333 (+1,316)

 

No.116

Thailand Cases: 28,346 (+69)

Thailand Deaths: 92

  

·         Global Vaccination

So far 139 countries have begun vaccinating people for the coronavirus and have administered at least 475,155,000 doses of the vaccine.

 

·         U.S. COVID-19 cases top 30 million as states race to vaccinate

 

New cases of COVID-19 rose 5% in the United States last week, the first increase after declining for nine straight weeks, according to a Reuters analysis of state, county and CDC data.

 

Thirty out of 50 states reported more new infections in the week ended March 21 compared with the previous seven days, up from 19 states in the prior week, according to the Reuters analysis.

Deaths from COVID fell 15% to 7,793 last week, or about 1,100 per day, according to the Reuters analysis. Health officials hope the country’s vaccination effort can prevent a rise in deaths even if cases surge again.

For a fourth week, daily average vaccinations set a record, with 2.5 million shots given per day last week. As of Sunday, 25% of the U.S. population has received at least one dose of a vaccine, up from 21% a week ago, according to the Centers for Disease Control and Prevention. About 13% has received two doses, up from 11%.

 

·         Brazil's COVID-19 death toll passes 300,000, health ministry says

 

·         Canada's lagging COVID-19 vaccine campaign set to ramp up as virus variants spread

 

 

·         Germany’s Merkel admits ‘mistake’ and reverses Easter lockdown

German Chancellor Angela Merkel reversed plans on Wednesday for a coronavirus lockdown over Easter amid criticism from experts and officials over the move.

The plans had called for placing the country in a strict lockdown over the Easter holiday — which would have seen all shops and churches close from April 1-5.

 

·         EU announces plan for tougher controls on coronavirus vaccine exports

 

·         Top U.S. diplomat warns China threatens NATO security, calls for joint approach to counter Beijing

Secretary of State Antony Blinken issued a strong rebuke Wednesday of China’s sweeping use of coercive measures and urged NATO allies to work with the U.S. in order to mount pushback on Beijing.

Blinken, in an address at NATO headquarters in Brussels, said the U.S. wouldn’t force its European allies into an “us or them choice.” However, he made clear that Washington views China as an economic and security threat, particularly in the realm of technology, to NATO allies in Europe.

 

·         Japan says North Korea ballistic missile launch threatens peace

 

Reference: CNBC, Reuters, Worldometers, Bloomberg