Gold hits new record, posts best month since 2016
· Gold rose on Friday to hit a new all-time high, as a sliding dollar and dire economic numbers from far and wide sparked a rush to safety in bullion. It was gold’s best month since February 2016, and its fifth straight positive month.
· Silver climbed 4.2% to $24.34 per ounce, on course for a monthly rise of about 33%, its largest on records going back to 1982, supported by investment and industrial demand.
· Spot gold gained 0.58% to trade at $1,970.81 per ounce, while U.S. gold futures settled 1% higher at $1,985.9, after earlier breaking above $2,000 for the first time on record.
· “The macro environment still remains very positive and prices continue to track real rates ... extreme weakness in the dollar has helped buoy gold prices further,” said Standard Chartered analyst Suki Cooper.
· The dollar was on track for its biggest monthly drop in almost a decade.
· Data showed the U.S. economy suffered its harshest blow since the Great Depression in the second quarter due to the pandemic, while investors also geared up for an uncertain political situation in the country.
· Safe-haven bullion has gained nearly 30% so far this year, propelled by low interest rates globally and widespread stimulus from central banks adding to support for the metal considered a refuge from inflation and currency debasement.
· “With policy rates already at or even below the zero bound, support to gold prices will increasingly have to come from higher inflation, in our view,” said BofA Global Research, which expects gold to hit $3,000 per ounce in the coming 18 months.
· Elsewhere, platinum gained 0.4% to trade at $916.3 per ounce, and looked to post its biggest monthly gain since January 2017.
Palladium fell 0.04% to trade at $2,134.10 per ounce, but was set for a more than 8% monthly rise, its first in five.
· White House says not optimistic on near-term deal for coronavirus relief bill
White House Chief of Staff Mark Meadows said on Sunday he was not optimistic on reaching agreement soon on a deal for the next round of legislation to provide relief to Americans hit hard by the coronavirus pandemic.
“I’m not optimistic that there will be a solution in the very near term,” Meadows said on CBS’ “Face the Nation” as staff members from both sides were meeting to try to iron out differences over the bill.
Stimulus talks: White House, Dems still agree on $1,200 checks but deadlocked on unemployment assistance
Familiar fault lines continue to separate the White House and congressional Democrats on the next coronavirus stimulus package a day after an extended meeting between House Speaker Nancy Pelosi and administration officials including Treasury Secretary Steve Mnuchin and chief of staff Mark Meadows.
Pelosi and Mnuchin both took to the airwaves on Sunday morning to lay out their competing visions for the rescue bill. The key sticking point separating Democrats and Republicans continues to be the federal boost to unemployment assistance, which was set at $600 per week in March but recently lapsed.
While the White House has come out in favor of reducing the federal assistance to $200 a week, Democrats have called for keeping it at the $600 level.
During an interview on ABC’s “This Week” on Sunday, Pelosi said that Trump was standing in the way of an agreement.
“We’ve been for the $600. They have a $200 proposal, which does not meet the needs of America’s working families, and it’s a condescension, quite frankly,” Pelosi said.
“They’re saying, ‘They really don’t need it. They’re just staying home because they make more money at $600,’” she added.
· U.S. election will be Nov. 3 as planned, Trump advisers say
The White House and Donald Trump’s campaign on Sunday sought to shut down the Republican president’s musings on delaying the 2020 vote, saying there will be an election on Nov. 3.
· Fed's Kashkari suggests 4-6 week shutdown; says U.S. Congress can spend big on coronavirus relief
The U.S. economy could benefit if the nation were to “lock down really hard” for four to six weeks, a top Federal Reserve official said on Sunday, adding that Congress can well afford large sums for coronavirus relief efforts.
The economy, which in the second quarter suffered its biggest blow since the Great Depression, would be able to mount a robust recovery, but only if the virus were brought under control, Neel Kashkari, president of the Minneapolis Federal Reserve Bank, told CBS’ “Face the Nation.”
“If we don’t do that and we just have this raging virus spreading throughout the country with flare-ups and local lockdowns for the next year or two, which is entirely possible, we’re going to see many, many more business bankruptcies,” Kashkari said.
· Microsoft confirms talks to buy TikTok in U.S., aims to finish deal by Sept. 15
Microsoft on Sunday confirmed that it has held talks with Chinese technology company ByteDance to acquire its trendy social app TikTok in the U.S. Microsoft said it in a statement that it will keep working with the U.S. government on a deal and that it intends to conclude talks by September 15.
If it were to complete the deal, Microsoft could simultaneously resolve a recent controversy in Washington and gain power in consumer technology.
Trump says will ban TikTok amid pressure on Chinese owner to sell
President Donald Trump said on Friday he would sign an executive order as soon as Saturday to ban TikTok in the United States, ratcheting up the pressure on the popular short-video app’s Chinese owner to sell it.
· Fitch revises U.S. outlook to negative; affirms AAA rating
Fitch Ratings revised the outlook on the United States’ triple-A rating to negative from stable on Friday, citing eroding credit strength, including a growing deficit to finance stimulus to combat fallout from the coronavirus pandemic.
The credit rating agency also said the future direction of U.S. fiscal policy depends in part on the November election for president and the resulting makeup of Congress, cautioning there is a risk policy gridlock could continue.
Debt and deficits, which were already rising before the pandemic, have started to erode the country’s traditional credit strengths, Fitch said in a report.
· Philippines to reimpose stricter coronavirus lockdown in capital as cases spike
· Japan first quarter GDP unchanged at 2.2% annualised contraction after second revision
Japan’s economy shrank an annualised 2.2% in January-March, unchanged after a second revision, data from the Cabinet Office showed on Monday.
The additional revision for gross domestic product (GDP) compared with economists’ median forecast for a 2.8% contraction in a Reuters poll.
On a quarter-on-quarter basis GDP shrank 0.6%, also unchanged from the second preliminary reading and compared with a median forecast for a 0.7% fall.
The government published additional revisions to GDP for the January-March quarter reflecting revised capital spending data from the finance ministry, which had initially drawn fewer respondents than usual due to coronavirus-related disruptions.
· South Korea's July exports record slowest decline in four months
South Korean exports fell the slowest in four months and beat market expectations, data showed on Saturday, a further sign a recovery in Asia’s fourth-largest economy is gaining traction, although threats loom from global flare-ups in the COVID-19 pandemic.
Overseas sales fell 7.0% in July from a year earlier, the trade ministry said, the fifth month of decline but much less than June’s 10.9% fall and the 9.7% drop tipped in a Reuters survey.
South Korea is the first major exporting economy to release monthly trade data, providing an early guide to the health of global trade.
Reference: CNBC, Reuters
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