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Gold is largely flat leading into the European open but silver has climbed 0.62%. Both of the precious metals are showing signs of rejections at the highs of yesterday but we need to see if the bulls can keep hold of the market.
It was a very quiet overnight session with both Chinese and Japanese markets closed. The ASX fell 0.10% after inheriting a mixed risk tone from the US. The tech and financial sector failed traded pretty subdued but some of the miners performed well of the back of higher commodity prices.
In the FX space, AUD and NZD performed well with AUD/USD rising 0.37%. The dollar index is marginally lower trading at 90.36, 0.06% lower. In terms of chart structure, GBP/USD is the clear winner as the pair is making new wave highs consistently.
On the COVID-19 front, Germany is set to extend their current lockdown to 7th March. It was due to end at the end of this month but Merkel and senior delegates felt there was sufficient evidence to need an extension due to the new variants.
There were press reports overnight that President Biden spoke to Chinese President Xi for the first time on Wednesday, since becoming the US leader. The key areas of concern for the US administration include human rights violations (Xinjiang), Hong Kong and assertive moves against Taiwan. US President Biden tweets "I will work with China when it benefits the American people.".
Chinese President Xi told President Biden that conflict between the nations would end in disaster for both countries and the two nations should establish various dialogue mechanisms to avoid miscommunication.
BoE Governor Bailet said there are signs that the EU wants to cut the UK off from its financial markets. He also noted that the EU demands for the UK to comply with Brussels regulations are unacceptable.
The Australian Treasury Secretary stated the economic recovery in the nation is happing faster than had been expected. He also added that labour participation is back to record levels.
Fed Chair Powell said that he will not tighten monetary policy solely based on employment levels and that there is a long way to go before the nation has a strong labour market. US President Biden considering Lisa Cook, for a seat on the Federal Reserve Board.
Looking ahead to the rest of the session highlights include the EIA monthly report, OPEC monthly report, initial jobless claims, Fed monetary report and comments from ECB's de Guindos.
By Rajan Dhall
For Kitco News
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