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Gold prints below an important support level heading into the EU session

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(Kitco News) - Gold and silver are both trading lower heading into the EU session. Gold has now printed below the previous wave low and broken the support level at $1764.73/oz. Silver has now broken below the $17/oz psychological level and traded as low as $26.25/oz overnight

After inheriting a negative handover from the US, the Nikkei 225 (-0.72%) and ASX (-1.34%) both fell overnight. The Chinese bourses however traded well and the Shanghai Composite closed 0.57% in the black. 

In the FX market, NZD and AUD once again outperformed with AUD just edging the battle with AUD/USD trading 0.38% higher overnight. Copper once again pushed higher and moved 1.45% in the right direction.

UK January retail sales data missed expectation to print at -8.2% vs -3.0% expected for the month on month reading. The UK is still in lockdown at the moment and it is having a devastating effect on the retail industry. Australia preliminary retail sales for January +0.6% m/m (expected +2.0%).

Sticking with economic data, Germany's January PPI printed at +1.4% vs +0.9% m/m expected. While overnight Japanese services PMI for February came in lower than last months reading at 45.8 vs prev 46.1.

China’s central bank is focusing more on money market interest rates in its regular open market operations than the size of the operations. This was according to the central bank publication Financial News. Paying too much attention to the size of the central bank’s liquidity operations could lead to a misunderstanding of monetary policy, the paper said.

Bloomberg reported, the U.S. is likely to hold off sanctioning any German firms for now over the Nord Stream 2 gas pipeline from Russia, according to four people familiar with the matter,

US Senior Democrats have discussed $3 tln jobs, infrastructure package. This could be another positive point for the commodities industry as many nations seem to investing in infrastructure projects.

Sticking with the US government, US President Biden says again, have to go big on COVID-19 relief package. The government is dues to vote on the bill at the end of next week.

US Treasury Secretary Yellen said stock market valuations are very high and investors need to be careful. She then added says she is hoping to see progress on the stimulus bill in the next 2 weeks.

CME has increased copper futures maintenance margins by 8.7% to $5,000 per contract. 

In the UK, Chancellor Rishi Sunak could be looking to extend the furlough scheme till the summer. There have also been some suggestions the tax rises may also be put off.

Looking ahead to the rest of the session highlights include German, EU, US and UK PMI's, Canadian retail sales, US existing home sales and comments from Fed's Rosengren and BoE's Vlieghe.

 

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