Gold rallies on Sino-US woes, silver soars to 7-year peak
· Gold surged to a nine-year peak on Wednesday as an escalation in U.S.-China tensions stoked demand for safety, while silver followed bullion’s rally to hit a near seven-year high on hopes for a recovery in industrial demand.
· Spot gold hit its highest since September 2011 at $1,870.01, nearing its all-time peak hit the same month. Spot gold jumped 1.3% to $1,865.61 per ounce, while U.S. gold futures closed 1.2% higher at $1,865.1 per ounce.
· “Gold is accelerating higher and that’s been mainly on the geopolitical tensions with China. There seems to be no end in sight for this escalation ... and it’s going to damage sentiment as the world’s largest countries continue to bicker,” said Edward Moya, senior market analyst at broker OANDA.
· The United States ordered China to close its consulate in Houston, while a source said Beijing was considering shutting the U.S. consulate in Wuhan in retaliation.
· The tit-for-tat between U.S. and China is likely to further deteriorate the global economic outlook as it reels under the impact of the pandemic.
· Low interest rates and a wave of stimulus to cushion virus- hit economies have propelled prices of bullion, widely used as insurance against rising uncertainties, about 23% higher so far this year.
· Silver rallied 6.4% to $22.68 per ounce, having hit its highest since October 2013 at $23.03.
· Prices have risen over 17% so far this week, which some analysts see as the start of a bull run powered by low interest rates, resurgent investment demand, disrupted production and a recovery in industrial consumption.
· “Silver shares some ‘safe haven’ attributes with gold but is inherently more leveraged to global growth and manufacturing recovery,” Citi Research wrote in a note.
A rebound in global PMIs, particularly in China, has accelerated the relative outperformance of silver versus gold this quarter, Citi added.
· Palladium fell 1.3% to $2,129.25 per ounce and platinum rose 2.6% to $904.97 per ounce, having hit its highest since Feb. 27 at $918.38.
· Trump, Republicans discuss unemployment extension; divides could stall action: senators
U.S. Senate Republicans and White House negotiators were divided on Wednesday about next steps to respond to the coronavirus crisis, with at least one senator warning divisions could delay action long after enhanced unemployment benefits expire.
Congress faces a tight deadline as a $600-per-week federal supplement to state unemployment benefits approved in March expires at the end of July, which would sharply reduce payments to millions of Americans thrown out of work in the pandemic.
Several Republican senators said they were discussing temporarily extending unemployment benefits as a possible stopgap measure if a broad package could not be passed in the next 10 days, though a key adviser to President Donald Trump voiced objections to that idea on Wednesday.
Agreement within the Republican caucus would be just a first step before launching intensive negotiations with the Democratic leadership of the U.S. House of Representatives.
· GOP considers extending unemployment benefit at reduced level of $100 a week through December
Republicans are considering extending the enhanced unemployment insurance benefit at a dramatically reduced level of $400 per month, or $100 a week, through the rest of the year, sources told CNBC.
Congress passed a $600 per week, or $2,400 a month, boost to jobless benefits in March to deal with a wave of unemployment unseen in decades as states shut down their economies to combat the coronavirus pandemic. The policy expires at the end of July as the U.S. unemployment rate stands above 11%, despite two strong months of job growth.
The GOP, which has not made a final decision on how it will craft unemployment insurance in a bill set to be released this week, previously discussed extending the benefit at an additional $200 per week instead of $600. Democrats want to make the $600 per week sum available at least until next year.
· California reports record daily increase in coronavirus cases as it becomes worst-hit state in the U.S., Newsom says
California reported more than 12,800 coronavirus cases on Tuesday, the highest reported daily tally the state has recorded so far, Gov. Gavin Newsom said Wednesday.
California has now surpassed New York in total confirmed Covid-19 cases — more than 409,500 cases as of Wednesday — making it the state with the most cases in the U.S., according to Johns Hopkins University data. However, New York has reported more than four times the number of deaths, according to Johns Hopkins.
· CORONAVIRUS UPDATES:
Ø Total confirmed cases: More than 15,364,925
Ø Total deaths: At least 629,339
Ø The coronavirus COVID-19 is affecting 213 countries and territories around the world and 2 international conveyances. The day is reset after midnight GMT+0. The list of countries and territories and their continental regional classification is based on the United Nations Geoscheme. Sources are provided under "Latest Updates". Learn more about Worldometer's COVID-19 data
Ø US cases: At least 4,100,875 and deaths: 146,183
Ø Brazil cases: At least 2,231,871 and deaths: 82,890
Ø India cases: At least 1,239,684 and deaths: 29,890
· Don't expect first COVID-19 vaccinations until early 2021: WHO's Ryan
Researchers are making “good progress” in developing vaccines against COVID-19, with a handful in late-stage trials, but their first use cannot be expected until early 2021, a World Health Organization (WHO) expert said on Wednesday.
WHO is working to ensure fair vaccine distribution, but in the meantime it is key to suppress the virus’s spread, said Mike Ryan, head of WHO’s emergencies program, as daily new cases around the globe are at near-record levels.
· EU’s pandemic fund ‘could have been better’, ECB’s Lagarde says
A historic European Union deal creating a 750-billion-euro ($870 billion) fund to help the bloc’s weaker economies recover from the coronavirus pandemic “could have been better”, European Central Bank President Christine Lagarde said on Wednesday.
The accord, struck on Tuesday after fraught negotiations, will see the European Commission disburse 390 billion in grants and 360 billion in cheap loans to member countries based on criteria including their unemployment rate in recent years and, later, the economic damage wrought by the pandemic.
But Lagarde stood out as a rare critic, saying she would have preferred a greater proportion of grants over loans, in line with the Commission’s original proposal that was changed to convince fiscally frugal countries such as the Netherlands.
· Pandemic pushes South Korea into recession as GDP contracts 3.3% in Q2
South Korea’s economy recorded its first technical recession since 2003 in the June quarter, as health restrictions from the coronavirus pandemic hammered economic activities and global demand.
Gross domestic product (GDP) decreased by a seasonally adjusted 3.3% in the June quarter, the central bank said on Thursday, after declining 1.3% in the previous quarter and much worse than a 2.3% contraction seen in a Reuters poll.
Reference: CNBC, Reuters
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