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v 24 July, 2020 - Gold smashes $1,900/oz barrier as Sino-U.S. row drives flight to safety

Safe-haven gold pierced the $1,900 per ounce ceiling on Friday for the first time since 2011 as a worsening U.S.-China row added to fears over the hit to a global economy already reeling from the coronavirus pandemic.

Spot gold climbed 0.7% to $1,899.68 per ounce by 2:00 p.m. EDT (1800 GMT), after hitting $1,905.99, the highest since September 2011.

Prices were set to gain 5% for the week, their best since week ended March 27.

U.S. gold futures settled up 0.4% at $1,897.5.

v 27 July, 2020 - Gold eyes record high as safe-haven demand thrives

Gold prices extended gains on Monday, just $3 shy of an all-time high, driven by U.S.-China tensions and a weaker dollar, while expectations of more stimulus to revive pandemic-hit economies lifted the metal's appeal as an inflation hedge.

Spot gold was up 0.8% at $1,916.91 per ounce by 0030 GMT, was just $3.39 shy of record high hit in September 2011 at $1,920.30. U.S. gold futures rose 0.8% to $1,913.50.

v Latest: Gold retreats from record peak, Fed meeting in focus

· Gold fell as much as 1.8% on Tuesday from an all-time peak as the dollar firmed and investors squared positions after a rapid rally, while silver fell more than 9%, with the focus turning to the U.S. Federal Reserve policy stance.

· Spot gold was 0.5% down at $1,931.84 per ounce by 1136 GMT, retreating from a record $1,980.57 hit earlier, as traders took profits.

U.S. gold futures were 0.2% lower at $1,926.70.

· Silver also retreated after rising 6.4% to $26.19 per ounce. It was last down 3.8% at $23.67.

· “Gold was way overbought and needed to correct,” said StoneX analyst Rhona O’Connell.

“But at the moment everything is supportive; negative interest rates, intensifying geopolitical tensions and massive uncertainty surrounding the economic and financial fallout from the virus.”

· The dollar index bounced off a two-year low as selling eased ahead of the Fed meeting and on hopes that a massive U.S. fiscal package would be approved.

· The Fed, which begins a two-day meeting on Tuesday, is widely expected to reiterate its accommodative policy stance.

· The dollar’s slight recovery also pushed gold lower, said ActivTrades chief analyst Carlo Alberto De Casa.

“I expect a consolidation phase between $1,850 and $1,950-$1,960 as the rally was a bit too quick.”

· The volatility of precious markets prompted the Shanghai Gold Exchange to say it would take risk control measures.

“Periods of consolidation should be healthy, and long-term investors are likely to take advantage of dips to build positions,” UBS said in a note, raising its 2020 average gold forecast to $1,740 from $1,650.

· Gold prices could top $2,000 this year, analysts predict

Gold prices could surge beyond the $2,000 level this year as economic and geopolitical uncertainties lead to a rush for safer assets, analysts predicted.

“We think the current momentum in the next few months will cross the $2,000 an ounce mark. The key question is how much does the rally increase after that,” Commonwealth Bank of Australia’s Vivek Dhar, mining and energy commodities analyst, told CNBC on Monday.

He added that in order to see prices well above that level — like $2,500 per ounce, the U.S. would have to move interest rates to below zero.

There is an inverse relationship between gold prices and real yields. Real yield is an investment return that has been adjusted for inflation.

· Safe-haven gold has rallied about 27% so far this year, mainly supported by growing doubts over an economic recovery from the pandemic and Sino-U.S. tensions.

· Speculators increased their bullish positions in COMEX gold and silver contracts in the week to July 21, the U.S. Commodity Futures Trading Commission (CFTC) said on Friday.

· Physical gold rates flipped to a discount in India last week as local prices surged while China's discounts slipped further on weak retail demand.

· Platinum fell 2.1% to $925.11 and palladium dropped 1% to $2,288.54.

· CORONAVIRUS UPDATES:

  

Ø  Total confirmed cases: More than 16,883,789

Ø  Total deaths: At least 662,481

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.

Ø  US cases: At least 4,498,343 (+64,729), and deaths: 152,320 (1,245)

Four U.S. states in the South and West reported one-day records for coronavirus deaths on Tuesday and cases in Texas passed the 400,000 mark as California health officials said Latinos made up more than half of its cases.

Arkansas, Florida, Montana and Oregon each reported record spikes in fatalities. California had recorded 133 deaths by mid-afternoon, shy of its one-day peak of 159 with hours to go.

Florida saw 191 coronavirus deaths in the prior 24 hours, its highest single-day rise yet, the state health department said.

· Eyes on Fed Meeting

Federal Reserve will conclude its two-day policy meeting Wednesday and is set to release a statement at 2 p.m. ET. Chairman Jerome Powell will have a press conference at 2:30 p.m. ET.

The central bank is expected to keep interest rate unchanged at near zero to support the economy still struggling with the coronavirus pandemic. On Tuesday, the Fed announced it would extend its emergency lending programs through the remainder of 2020.

The extensions apply to those facilities that were due to expire on or around Sept. 30, the Fed said in a statement.

· Congress, White House struggle to find deal on new coronavirus aid

Republicans in the White House and the U.S. Congress were in disarray over their own plan for providing $1 trillion in new coronavirus aid on Tuesday, as negotiations aimed at reaching a compromise bill with Democrats also sputtered.

U.s. Senate Majority Leader Mitch McConnell said on Monday Senate Republicans will shortly introduce a new coronavirus relief program to address health, economic assistance and schools.

Speaking on the Senate floor, McConnell said the package would include direct payments to Americans of $1200 each, and help for the unemployed.

It would also include ‘strong legal liability protection,’ over $100 billion for schools, more money for a small business program, and a program to incentivize manufacturing of personal protective equipment in the United States.

· U.S. Stimulus debate continues

A plan unveiled by Senate Republicans would include relief for jobless Americans, another direct payment to individuals of up to $1,200, and more Paycheck Protection Program small business loan funds, among other provisions. It would also set federal unemployment insurance at 70% of a worker’s previous wages, replacing the $600 per week which states stopped paying out this week.

In an interview with CNBC’s Kayla Tausche, Senate Majority Leader Mitch McConnell said a bill without liability protection for corporations and other entities would not pass the Senate floor.

However, House Speaker Nancy Pelosi said Monday night that Republicans are “not really ready to have a serious negotiation,” adding: “We have some other priorities that we want to see in the bill, but they’re not even getting to the fundamentals of food and rent and economic survival.”

“The cutting of the unemployment benefits is setting us up for a political battle and that could take time,” said Peter Cardillo, chief market economist at Spartan Capital Securities, noting this was weighing on market sentiment.

· Iran holds annual Gulf drill amid rising tensions with U.S.

Iran’s elite Revolutionary Guards launched a military drill in the Gulf on Tuesday, Iranian state television reported, at a time of high tension between Tehran and Washington.

The U.S. military said the drill had caused two bases with American troops in the region to go on heightened alert and said Tehran’s missile launches were irresponsible.

There have been periodic confrontations in the Gulf in recent years between the Guards and the U.S. military, which has accused the Guards’ navy of sending fast-attack boats to harass U.S. warships as they pass the Strait of Hormuz.