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Gold’s record breaking rally sputters on dollar bounce-back

·         Gold slumped over 2% on Friday, snapping its record-breaking rally, after a decent U.S. jobs report boosted the dollar, but a worsening pandemic kept prices on course for their longest streak of weekly gains in about a decade.

·         Spot gold fell 1.4% to $2,033.89 per ounce, after hitting a record high of $2,072.50. It has added 3% so far this week for what would be its ninth straight weekly gain. U.S. gold futures settled down 2% at $2,028.

·         “The dollar rebounded quite strongly after the jobs report. That clearly caused a sell-off across the board in the metals sector,” said David Meger, director of metals trading at High Ridge Futures.

 

“The thought process would be that with the slightly better than expected jobs number, the economy is slowly regaining its footing and, hypothetically, we would then see a lesser need for stimulus.”

·         The dollar rebounded from two-year lows after data showed U.S. nonfarm payrolls increased 1.763 million in July against a record rise of 4.791 million in June and on renewed U.S.-China tensions.

·         Further weighing on gold was an impasse in the new U.S. coronavirus aid bill.

·         “Once they agree on a stimulus it’ll be bearish for the dollar. The global economy is still very wobbly and as a result we’re going to get a lot more easy money, so all that is tailwind for gold,” said Edward Meir, analyst at ED&F Man Capital Markets.

 

Gold can still end the year at $2,200-$2,300, he added.

·         Bullion has risen 34% this year amid surging COVID-19 cases, which have battered global economies and prompted unprecedented stimulus measures.

·         Elsewhere, silver slid 3% to $28.07 per ounce, having earlier hit its highest since February 2013 at $29.84. It has gained 15.5% so far this week.

·         Platinum dipped 4.1% to $957.36, while palladium declined 2.9% to $2,156.97.

·         Trump signs coronavirus relief orders after talks with Congress break down

President Donald Trump signed executive orders on Saturday partly restoring enhanced unemployment payments to the tens of millions of Americans who lost jobs in the coronavirus pandemic, as the United States marked a grim milestone of 5 million cases.

Negotiations broke down this week between the White House and top Democrats in Congress over how best to help Americans cope with the heavy human and economic toll of the crisis, which has killed more than 160,000 people across the country.

Trump said the orders would provide an extra $400 per week in unemployment payments, less than the $600 per week passed earlier in the crisis. Some of the measures were likely to face legal challenges, as the U.S. Constitution gives Congress authority over federal spending.

 

·         Payrolls increase by nearly 1.8 million, topping expectations despite coronavirus resurgence

Two months of record-setting payroll growth slowed in July but was still better than Wall Street estimates even as a rise in coronavirus cases put a damper on the struggling U.S. economy.

Nonfarm payrolls increased 1.763 million for the month, the Labor Department reported Friday. The unemployment rate fell to 10.2% from its previous 11.1%, also better than the estimates from economists surveyed by Dow Jones.

An alternative measure that includes discouraged workers and the underemployed holding part-time jobs for economic reasons fell from 18% to 16.5%.

The consensus was for growth of 1.48 million jobs and an unemployment rate of 10.6%.

 

 

·         Coronavirus Updates:

 

U.S. tops 5 million coronavirus cases as outbreak threatens America’s Midwest

Germany's confirmed coronavirus cases rise by 555 to 215,891: RKI

Australia reports biggest one day rise in new COVID-19 deaths

 

 

·         Fed’s Kashkari advocates six-week economic lockdown to defeat the coronavirus

The U.S. economy needs an even more stringent shutdown than the last time if it’s going to defeat the coronavirus, Minneapolis Federal Reserve President Neel Kashkari said.

 

·         Fed's Evans says another coronavirus aid package 'incredibly important': interview

The United States should implement another support package to ensure workers can stay safely at home while the novel coronavirus continues to spread, Chicago Fed President Charles Evans said in an interview with CBS News released on Sunday.

Evans said it was up to U.S. lawmakers to protect small businesses and vulnerable communities with measures that ensure they can continue to pay their rent and buy food as long as the virus was not under control.

“I think that public confidence is really important and another support package is really incredibly important,” Evans said on CBS’s Face the Nation program.

 

·         U.S. sanctions Hong Kong leader Carrie Lam for carrying out Chinese ‘policies of suppression’

The Trump administration will impose a fresh round of sanctions on 11 individuals, including Hong Kong leader Carrie Lam, as tensions between the United States and China accelerate.

The Treasury Department designated Lam for her role in overseeing and “implementing Beijing’s policies of suppression of freedom and democratic processes.”

According to the department, Lam, the city’s chief executive, pushed last year to allow for extradition to mainland China, setting off a series of massive anti-government demonstrations in Hong Kong.

 

·         China targeting U.S. election infrastructure with cyberattacks, says O'Brien

 

Chinese government-linked hackers have been targeting U.S. election infrastructure ahead of the 2020 presidential election, White House National Security Adviser Robert O’Brien said on Sunday, indicating a more active level of alleged Chinese interference.

 

·         Beirut police fire tear gas as protesters regroup and two ministers quit

Lebanese police fired tear gas to try to disperse rock-throwing protesters blocking a road near parliament in Beirut on Sunday in a second day of anti-government demonstrations triggered by last week’s devastating explosion.

Fire broke out at an entrance to Parliament Square as demonstrators tried to break into a cordoned-off area, TV footage showed. Protesters also broke into the housing and transport ministry offices.

Two government ministers resigned amid the political fallout of the blast and months of economic crisis, saying the government had failed to reform.