Gold and silver are at key levels ahead of the EU open

After falling another 1.56% during Tuesday's session gold is hanging on at the previous wave low support this morning near $1686/oz. Silver is trading 0.32% in the black very close to the $24.00/oz psychological area. Both chart structures look very weak but this could be a telling session as gold could make a double bottom or push to trade at its lowest level since June 2020.

After inheriting a negative lead from the U.S. bourses, indices in the Asia Pac area are mixed. The Nikkei 225 (-0.86%) and Shanghai Composite (-0.44%) closed lower while the ASX closed 0.78% in the black.

In FX markets, the dollar index is down a tough (-0.02%) and the biggest mover was USD/JPY which rose 0.30%. Other than the yen weakness it was a pretty lacklustre session. Lastly, in the rest of the commodities complex, spot WTI (1.07%) and copper (0.32%) both trade higher.

There has been some data out this morning, U.K. final GDP for Q4 came in at 1.3% to beat the prelim reading of 1.0%.

On a more negative note overnight, there has been a new lockdown imposed for a city (Ruili) in China after new coronavirus cases. Residents have been told to stay home for a week and cars are prohibited from leaving the city.

Sticking with China, there were financial media reports which said the PBOC will ensure stable liquidity next month.

On the data front overnight, Chinese Manufacturing PMI (51.9 vs expected 51.2) & Services (56.3 vs expected 52.0) both beat analyst consensus readings to stay in expansionary territory. However, in Japan Industrial Production for February (preliminary) fell -2.1% month on month vs the expected reading of -1.3%.

Heads up for U.S. President Biden to speak on infrastructure today (Wednesday). There are also suggestions that Biden could also increase the corporation tax rate.

We also heard from Fed's Barkin who said he is not convinced of use cases for Bitcoin. He then spoke about rates saying the Fed will hold rates until 3 part test met and once past this crisis the US must get fiscal house in order.

Looking ahead to the rest of the session highlights include German employment numbers, EU CPI, Canadian GDP, US ADP, U.S. pending home sales and weekly DoE's.
 

By Rajan Dhall

For Kitco News

 

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