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Gold and silver trade slightly lower ahead of the EU open as the dollar traded marginally higher overnight. The risk sentiment was also mixed with Australia playing catch up after a public holiday on Tuesday. The ASX (-0.65%) fell while the Nikkei 225 rose 0.31% and the Shanghai Composite gained 0.11%. In the FX space, it was once again commodities currencies that underperformed with the Canadian dollar getting hit the most (USD/CAD 0.28%).
Overnight it was reported that China has made plans to cut steel output in 2021. China's Ministry of Industry and Information Technology has released a series of measures to accelerate the reduction of steel output including a ban on illegal additions of new capacity. Bolstering its guidance on capacity swaps and a push for mergers/restructuring the steel industry to solve long-term issues around competition.
Over in the US, new President Biden said millions of more Americans will receive the vaccine sooner than expected. In the UK, the nation passed the grim 100k milestone for fatalities prompting the media to ask questions about the governments handling of the crisis. Despite this, Boris Johnson has promised a plan is in place to ease the lockdown in the coming days and weeks.
The US-China tension continues to be on the radar of many investors. This comes as Biden's nominee for Commerce Secretary stated the US would use its full toolkit to protect US networks from companies like Huawei and ZTE.
The weakness in the dollar is in focus at the ECB after the ECB is said to be querying the greenback weakness despite the strength in the US economy. The ECB is also said to be monitoring the impact of FX on the ECB vs Fed policies.
Looking ahead to the rest of the session highlights include the FOMC rate & monetary policy decision, German GFK data, US durable goods data, weekly DoE inventories and some large-cap earnings including Apple and Tesla.
By Rajan Dhall
For Kitco News
