Gold set to break longest winning streak since end-2017
· Gold prices dipped on Thursday as investors holding short positions took profits after nine straight sessions of gains, although the outlook remained bullish with prices hovering near a record peak.
· Spot gold dipped 0.9% to $1,952.30 per ounce, set to break its longest winning streak since December 2017. U.S. gold futures closed 0.6% lower at $1,942.30.
· “We’ve seen gold’s positioning has started to bloat not only from the institutional side, but more recently we have really seen a surge in retail flows,” said Daniel Ghali, commodity strategist at TD Securities.
“All of this suggests that this is probably as good as it’s going to get for gold for the time being.”
· Bullion traded close to Tuesday’s record high of $1,980.57 per ounce in the last session after U.S. Federal Reserve kept interest rates unchanged, while pledging to use its full range of tools for as long as necessary to recover from the pandemic.
· The non-yielding metal, which benefits from low interest rates, is up over 28% so far this year, supported by strong investment demand.
· “In the short-term, the market could’ve been considered overbought and due for a correction,” said Kitco Metals senior analyst Jim Wyckoff, adding gold right now is seeing profit-taking by shorter-term futures traders.
On the longer and intermediate term basis, the market is trending higher and still in a bullish posture, Wyckoff added.
· Meanwhile, a historic plunge in second-quarter U.S. GDP and President Donald Trump’s tweet about delaying the U.S. November presidential elections triggered a sell-off in U.S. stocks and lower Treasury yields.
· “People are panicking and fleeing the equity markets and you’re seeing that weighing on metals prices,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.
· Other metals were also lower, with silver shedding 4.9% to stand at $23.22 per ounce, platinum down 3.1% at $895.20 and palladium dropping 4.4% to $2,061.96.
· Trump doubles down against mail-in voting, calls for immediate 2020 election results
President Donald Trump, whose suggestion to delay the 2020 U.S. election was roundly rejected earlier on Thursday, said the results of the vote should be known on election night.
“Must know Election results on the night of the Election, not days, months, or even years later!” Trump said on Twitter, referring to mail-in balloting that could take a longer time to tally votes.
Trump says he doesn't want to delay 2020 election; but worried about mail-in ballots
Hours after suggesting a possible delay in the 2020 U.S. presidential election, U.S. President Donald Trump on Thursday said he did not want to postpone the vote, but remained concerned that millions of mail-in ballots would cause problems.
“I want an election and a result, much, much more than you,” Trump told reporters at the White House. “I don’t want to delay. I want to have the election. But I also don’t want to have to wait three months and then find out that the ballots are all missing, and the election doesn’t mean anything.”
Trump cited recent media reports about potential problems with mail-in ballots arriving late and said it could take weeks, months or even years to sort it out. “Do I want to see a date change? No, but I don’t want to see a crooked election,” he said.
· Second-quarter GDP plunged by worst-ever 32.9% amid virus-induced shutdown
The U.S. economy saw the biggest quarterly plunge in activity ever, though the plummet in the second quarter wasn’t as bad as feared.
Gross domestic product from April to June plunged 32.9% on an annualized basis, according to the Commerce Department’s first reading on the data released Thursday. Economists surveyed by Dow Jones had been looking for a drop of 34.7%.
Still, it was the worst drop ever, with the closest previously coming in mid-1921.
The report “just highlights how deep and dark the hole is that the economy cratered into in Q2,” said Mark Zandi, chief economist at Moody’s Analytics. “It’s a very deep and dark hole and we’re coming out of it, but it’ going to take a long time to get out.”
The report comes amid a recession that began in February and pulled first-quarter growth down 5%. On a quarterly basis, the Q2 decline was 1.8%.
· U.S. weekly jobless claims rise for a second straight week, total 1.434 million
The number of Americans who filed new claims for unemployment benefits last week totaled 1.434 million, the Labor Department reported Thursday, roughly in line with expectations, as the coronavirus pandemic continues to ravage the U.S. economy.
It was the 19th straight week in which initial claims totaled at least 1 million and the second consecutive week in which initial claims rose after declining for 15 straight weeks.
· Deal on U.S. coronavirus aid bill elusive as jobless benefit nears expiration
Just one day before a federal jobless benefit was set to expire, the U.S. Congress was no closer on Thursday to a deal extending or replacing the extra $600-per-week in payments to tens of millions thrown out of work by the coronavirus pandemic.
Lacking a deal, Senate Majority Leader Mitch McConnell maneuvered to stage votes next week on a Republican plan extending the expiring unemployment benefit, but at a much lower level.
While the measure may be blocked by Democrats, it could spur lawmakers and the White House to accelerate negotiations next week toward a compromise.
· Trump urges Democrats to help approve legislation for eviction moratorium
President Donald Trump on Thursday urged Democrats to help approve legislation extending protection from eviction for renters who have lost their jobs because of the coronavirus pandemic.
“We’re asking Democrats to work with us to find a solution that will temporarily stop evictions. We do not want people who have lost their jobs due to the virus to be evicted from their homes or apartments,” the Republican president said at a White House news conference.
· Fed's Main Street loan volume picks up but still modest
The Federal Reserve facilitated the largest volume of loans yet in the latest week under its new Main Street Lending Program, although the total amount of credit extended by the central bank to U.S. small and midsize business remains modest.
The total balance of outstanding Main Street loans rose by $68 million in the week ended July 29 to $82 million from $14 million a week earlier, according to data released by the Fed on Thursday.
The program, under which the Fed will buy 95% of a loan initiated by a private lender to a qualified business borrower, made its first loan about two weeks ago - $12 million to a company in Wisconsin.
· Pompeo says U.S. has expanded scope of Iran metals sanctions
U.S. Secretary of State Mike Pompeo on Thursday said he was expanding the scope of Iran metals sanctions, targeting 22 specific materials that he said were used in connection with Iran’s nuclear, military or ballistic missile programs.
Pompeo in a statement called it a “major expansion” of the Iran metals-related sanctions administered by the State Department, allowing Washington to blacklist those who knowingly transfer the materials to Iran.
“Iran’s nuclear, ballistic missile, and military programs pose a grave threat to international peace and security,” Pompeo said in the statement.
Reference: CNBC, Reuters
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