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Gold inches lower as strong equities dim appeal

·         Gold prices eased on Monday as hopes for a swift economic recovery following strong U.S. jobs and services sector data bolstered gains on Wall Street, although a softer dollar limited the precious metal’s decline.

·         Spot gold fell 0.1% to $1,727.64 per ounce as of 2:34 p.m. ET. U.S. gold futures settled little changed at $1,728.80.

·         “There is broad optimism for the U.S. economic recovery ... A strong U.S. stock market is technically a difficult environment for gold,” said Edward Moya, senior market analyst at OANDA.

·         The S&P 500 and the Dow hit record highs on data that showed the U.S. economy created the most jobs in seven months in March. Meanwhile, a measure of services industry activity surged to a record high.

·         The dollar hit a more than one-week low, making bullion less expensive for holders of other currencies and limiting gold’s losses.

·         Meanwhile, U.S. President Joe Biden’s announcement of a long-awaited $2 trillion-plus job plan last week has fueled concerns over inflation.

·         “Stimulus is inflationary and potentially bullish for gold in the longer term, and also silver, but on the shorter term traders are focusing on the positive economic aspects of the stimulus package,” said Kitco Metals senior analyst Jim Wyckoff.

·         On investors’ radar were minutes from the Federal Reserve’s last policy meeting on Wednesday.

·         “So far, the Fed is quite committed to keep interest rates unchanged until the end of 2023, but if inflation increases ... then they will achieve their long term objective sooner than expected,” said Jigar Trivedi, commodities analyst at Mumbai-based broker Anand Rathi Shares. “If that happens, we are going to see an increase in interest rates and that will be negative for gold prices.”

·         Silver dropped 1% to $24.73 per ounce, and palladium fell 0.3% to $2,658.25.

·         Platinum eased 0.3% to $1,206.28 per ounce after hitting its highest level since March 18 earlier in the session at $1,218.

 

·         Crypto market cap surges to record $2 trillion, bitcoin at $1.1 trillion

 

·         U.S. services sector gauge scales record high; cost pressures mounting

A measure of U.S. services industry activity surged to a record high in March amid robust growth in new orders, in the latest indication of a roaring economy that is being boosted by increased vaccinations and massive fiscal stimulus.

The ISM’s non-manufacturing activity index rebounded to a reading of 63.7 last month also due to warmer weather. That was the highest in the survey’s history and followed 55.3 in February.

 

·         Yellen speech confirms that the U.S. is back on the world stage

“Over the last four years, we have seen firsthand what happens when America steps back from the global stage,” Yellen said. “America first must never mean America alone. For in today’s world, no country alone can suitably provide a strong and sustainable economy for its people.”

Those weren’t the only tough words Yellen had for the prior administration.

 

Yellen pledges U.S. international cooperation, calls for global minimum tax

U.S. Treasury Secretary Janet Yellen said on Monday that she is working with G20 countries to agree on a global corporate minimum tax rate and pledged that restoring U.S. multilateral leadership would strengthen the global economy and advance U.S. interests.

 

·         Biden says no evidence higher corporate taxes will drive companies abroad

President Joe Biden on Monday defended his proposal to raise corporate taxes to help pay for his infrastructure spending plans, saying he was not worried the hike would harm the economy and that there was no evidence it would drive business abroad.

 

 

·         Republican Sen. Roy Blunt calls on Biden to slash massive infrastructure plan to $615 billion

 

·         U.S. Senate parliamentarian says Democrats can use reconciliation to pass more bills

 

·         The Fed could come under fire for easy policy while the economy soars and inflation rises

The Fed will have a tough time promising easy policy as markets watch increasingly strong economic data over the next couple of months.

The second quarter is expected to boom, and the Fed could look behind the curve while it keeps its commitment to zero rates and bond purchases in the three-month period.

Bond investors now see the first fed funds rate hike in December 2022 while the Fed’s consensus is that there will be no rate hike through the end of 2023.

 

·         Fed’s Mester lauds jobs report, but says loose policy is staying put

March’s strong job gains weren’t enough to convince Cleveland Federal Reserve President Loretta Mester that it’s time to change monetary policy.

 

·         World Bank chief expects G20 to extend debt payment freeze through end-2021

 

·         Coronavirus Updates:

COVID-19 infections are still rising in 69 countries which decreasing from previous day.

Global Cases: 132.39M (+464,980)

Global Deaths: 2.87M (+7,209)

 

Europe Cases:  40.54M (+101,977)

Europe Deaths:  928,842(+2,411)

 

Asia Cases: 29.54M (210,901)

Asia Deaths: 435,845 (+1430)

 

No.1-3:

U.S. Cases: 31.48M (+49,584)

U.S. Deaths: 569,197 (+419)

 

Brazil Cases: 13.02M (+38,233)

Brazil Deaths: 333,153 (+1,623)

 

India Cases: 12.68M (+96,557)

India Deaths: 165,577(+445)

 

 

No. 115

Thailand Cases: 29,321 (+194)

Thaniland Deaths: 95

·         Global Vaccination:

So far, at least 153 countries have begun vaccinating people for the coronavirus and have administered at least 664,519,000 doses of the vaccine.

  Gibraltar leads the world and has administered enough vaccine doses for 90% of its population, assuming every person needs two doses.  

·         U.S. COVID-19 cases rise for third straight week, hospitalizations also up

 

·         Fauci says two doses of Pfizer’s or Moderna’s Covid vaccines are better than one to protect against variants

White House chief medical advisor Dr. Anthony Fauci said that Americans should continue to receive two doses of the Pfizer and Moderna Covid-19 vaccines.

A Centers for Disease Control and Prevention study published last week found a single dose of the vaccines was 80% effective in preventing coronavirus infections.

But Fauci said he is still concerned about the length of protection after a single dose, especially with the emergence of highly contagious variants.

 

Fauci warns against relaxing public health measures as summer approaches

Dr. Anthony Fauci warned Monday that Americans should still be vigilant and adhere to public health measures as warmer summer months approach.

 

·         India’s daily virus cases breach 100,000; mutants, behavior blamed

India reported a record rise in COVID-19 infections on Monday, becoming the second country after the United States to post more than 100,000 new cases in a day, as politicians stage massive election rallies raising fears of further spreading the virus.

With 103,558 new infections, India has now reported 12.6 million cases, the highest after the United States and Brazil, data from the health ministry showed. Deaths jumped by 478, still one of the lowest fatality rates in the world, raising the total to 165,101.

 

·         Novavax starts allowing participants on placebo to get COVID-19 vaccine in trials

Novavax Inc said on Monday participants in its ongoing COVID-19 vaccine trials in South Africa and the UK can now receive additional shots, ensuring those who received a placebo can also get the active vaccine.

 

·         Japan fears COVID-19 variants are behind possible fourth wave

Japanese health authorities are concerned that variants of the coronavirus are driving a nascent fourth wave in the pandemic with just 109 days remaining until the Tokyo Olympics.

 

·         ‘It’s a big mess.’ Europe buckles down for Easter lockdowns as Covid cases eclipse spring 2020 levels

 

·         UK’s Boris Johnson ‘hopeful’ foreign travel can resume from May 17

 

·         New Zealand could open border with Australia from end of week: 1NEWS

New Zealand could open its borders to Australian travellers as soon as the end of the week, New Zealand broadcaster 1NEWS reported on Tuesday without saying where it obtained the information.

 

·         Japan Feb household spending hit by coronavirus curbs

 

·         Japan real wages eke out first rise in a year as COVID-19 hits prices

 

Reference: CNBC, Reuters, Worldometers