Gold and silver edge higher leading into the EU open

Gold and silver have started the session higher but in recent days when this has been the case, the sentiment has turned later in the sessions. The yellow metal is trading around half a percent higher leading into the EU open but the daily chart structure still looks more bearish than silver.

After inheriting bearish sentiment from the US bourses indices in the Asia Pac area are softer this morning. The Nikkei 225 (-2.13%), ASX (-0.84%) and Shanghai Composite (-2.05%) are all trading in the red this morning. There was a surge in sovereign bond yields once more and this dragged equities lower.

In the FX markets, it was once again the antipodeans that outperformed. NZD/USD traded 0.32% higher while AUD/USD was the outperformer rising half a percent. Having had some news from OPEC, spot WTI trades higher by 1.25% while copper moved 0.35% lower.

We heard from some central bankers overnight, RBA's Kearns says house price gains are not a concern right now and it is to be expected.

Sticking with central banks, RBNZ Gov Orr stated central banks globally are aiming to overshoot inflation targets.

Fed's Evans said that he does not think the Fed will need to change the duration of their bond purchases. He also said he views the current rise in yields as healthy.

Reuters reported that China's $1 trillion sovereign wealth fund (China Investment Corp (CIC)) is scouting for long-term investments in the United States.

In terms of data, the Australian trade balance for January AUD$ 10,142m surplus (vs. expected AUD$ 6850m surplus) and retail sales (MoM) for January came in at 0.5% vs 0.6% expected.

On the COVID-19 front, Australian PM Morrison says the AstraZeneca vaccine will begin to roll out from Friday. German Chancellor Merkel also had her say noting that vaccinations are the way out of the pandemic.

Looking ahead to the rest of the session highlights include the OPEC meeting, construction PMI's from the major nations, EU retail sales, US initial jobless claims and the all-important comments from Fed Chair Powell. We could also hear from ECB's Centeno and Knot.

 

By Rajan Dhall

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