Worst month for gold since Nov. 2016

TAKEAWAYS

•    Aussie dollar gets hammered 2.2% on Friday as dollar rallies
•    US dollar top performing G10 currency last week
•    Bitcoin hits 20-day low in retreat from record high
•    Wall Street indices end the week with steep losses 
•    Nikkei sees massive -3.99% loss
•    US Treasury yields turn significantly lower hit 1.39% after ‘spike high’ over 1.6%
•    Oil prices slide 3% on Friday but finishes week higher
•    Gold price falls 3%, falls to 8-month low.
•    New Zealand announces new 7-day lockdown for Auckland 
•    China official February PMI data misses expectations but remains in expansion
•    House passes Biden’s $1.9 trillion stimulus bill; Senate promises to pass it by March 14
•    DAY AHEAD: Global manufacturing PMIs, Germany CPI

BEST CHART
XAU/USD – Daily Candlesticks
 

Source: GKFX / MT4 (February 28, 2021)

XAU/USD broke down below 50% Fibonacci retracement and November low support to reach its lowest in 8-months. The new lower low confirms the price is still in a medium-term downtrend where net support might be found at the 61.8% Fibonacci level and the June low at $1670 per oz.
 

GURU WISDOM

“Do not save what is left after spending but spend what is left after saving.” – Warren Buffet

MARKETS

*Daily closing price
↘ EUR/USD    1.2076        (-0.82%)
↗ GBP/USD    1.3935        (+0.02%)
↘ USD/JPY    106.57        (-0.01%)
↘ S&P 500    3811.15    (-0.47%)
↘ Dow Jones    30,932.37    (-1.50%)
↘ Gold        1855.18    (-0.10%)
↘ Oil (Brent)    64.43        (-2.54%)
↘ Bitcoin    44,561.0    (-6.10%)

NEWS

In a wild finish to a wild week, Wall Street indices reversed early gains to close lower and end near the lows. The weak finish came despite a reversal of the spike in bond yields that had prompted the heavy selling on Thursday. The Nasdaq was the exception as traders bought the dip in big tech stocks, sending the sector higher.

Commodities weren’t spared the sell-off. The price of oil dropped back from a pre-pandemic high over $65 per barrel in Brent. The price of oil has rallied 20% in February. This week OPEC+ is expected to be comfortable enough with prices at current levels to increase output quotas, meaning more supply in the market.

A rallying US dollar sent the gold price crashing though the November low to hit the lowest in 8 months. Even with yields paring their gains on Friday, gold slumped alongside a broad sell-off in riskier assets. Likewise, commodity-linked currencies were the biggest decliners with the Aussie dollar down over 2%.

DAY AHEAD 

*Times in GMT
01:45 – China Caixin Manufacturing PMI(Feb) [51.5 Exp vs. 51.5 Prev]
08:55 – Germany Markit Manufacturing PMI(Feb) [60.6 Exp vs. 60.6 Prev]
09:30 – UK Markit Manufacturing PMI(Feb) [54.9 Exp vs. 54.9 Prev]
13:00 – Germany Harmonized Index of Consumer Prices (YoY)(Feb) Prel [1.6 % Exp vs. 1.6 % Prev] 
15:00 – US ISM Manufacturing PMI(Feb) [58.9 Exp vs. 58.7 Prev]