Gold surges over 2% on waning dollar, Fed policy shift
· Gold rebounded over 2% on Friday, a day after a steep sell-off, as the U.S. dollar weakened and the U.S. Federal Reserve signaled a prolonged low interest rate strategy.
· Spot gold rose 1.8% to $1,964.47 per ounce by 02:25 p.m. EDT (1825 GMT), taking gains this week to about 1.3%. Prices fell as much as 2.2% on Thursday after U.S. Treasury yields gained following a speech by Fed Chair Jerome Powell on the strategy.
· U.S. gold futures settled up 2.2% at 1,974.90.
· “The sizeable sell-off in the greenback has propped up gold,” said David Madden, market analyst at CMC Markets UK.
“The Fed said it can allow inflation to run above its 2% target for some time seems like they are going to keep their monetary policy extremely loose, which should help gold.”
· The dollar fell to an more-than one-week low, making gold cheaper for holders of other currencies, and was on track to post its biggest weekly percentage fall since end-July.
· Powell said on Thursday the central bank would adopt an average inflation target, meaning rates are likely to stay low even if inflation rises a bit in the future.
· On the other hand, global central banks and governments have pumped massive stimulus into the market to prop up their coronavirus-damaged economies, helping gold gain over 28% this year.
· “The shift in Fed policy will mostly likely reignite ‘the inflation trade,’ which has historically been bullish for hard assets (like gold),” Kitco Metals senior analyst Jim Wyckoff said in a note.
· Low interest rates tend to support gold, which is also a hedge against inflation and currency depreciation.
· Silver rose 1.6% to $27.48 per ounce, on track for a second consecutive weekly rise.
· Platinum eased 0.1% to $927.83, while palladium rose 2.4% to $2,211.96.
· CORONAVIRUS UPDATES: Coronavirus cases surpass 25 million as pandemic strains nations around the world
Global cases: More than 25.37 million
Global deaths: At least 850,149
U.S. cases: More than 6.17 million
U.S. deaths: At least 187,224
Brazil cases: More than 3.86 million
Brazil deaths: At least 120,896
India cases: More than 3.61million
India deaths: At least 64,617
The number of reported Covid-19 cases across the globe has surpassed 25 million, with the U.S., Brazil and India leading the grim count, according to data from Johns Hopkins University.
The coronavirus has killed more than 843,000 people worldwide since it emerged from Wuhan, China, late last year, with the Americas reporting the bulk of fatalities. The U.S., Mexico and Brazil represent more than 40% of the global death toll, according to Johns Hopkins.
Reported Covid-19 cases first surpassed 10 million in late June, then reached 20 million just over six weeks later on Aug. 10, according to Johns Hopkins data.
· FDA willing to fast track coronavirus vaccine before phase three trials end
The chief of the U.S. Food and Drug Administration is prepared to bypass the full federal approval process in order to make a Covid-19 vaccine available as soon as possible, according to an interview in The Financial Times.
Insisting that the move would not be due to pressure from the Trump administration to fast track a vaccine, FDA Commissioner Stephen Hahn told the publication that an emergency authorization could be appropriate before phase three clinical trials are completed if the benefits outweigh the risks.
· White House suggests $1.3 trillion coronavirus aid bill; Pelosi says not enough
President Donald Trump is willing to sign a $1.3 trillion coronavirus relief bill, a top aide said on Friday, but Democratic House of Representatives Speaker Nancy Pelosi said the sum was not enough to meet the needs of the American people.
Trump said later that Pelosi was only interested in bailing out states run by Democrats, casting doubt on chances of reviving stalled talks for another round of fiscal stimulus.
The new figure was put forward by White House Chief of Staff Mark Meadows, marking a $300 billion increase from an initial $1 trillion offer from the White House and Senate Republicans.
Three weeks after talks on Capitol Hill broke down without a deal on legislation to help Americans suffering from the coronavirus pandemic, Meadows said the Republican president was “right now willing to sign something at $1.3 trillion.”
Hours later, Pelosi in a statement repeated her call for a $2.2 trillion bill and said Meadows’ offer would not meet the needs of American workers and families.
· Brazil to extend coronavirus economic aid on Tuesday, official says
Brazil will officially announce on Tuesday the extension of an aid payment program designed to help people weather the economic damage of the novel coronavirus pandemic, a government official said on Saturday.
President Jair Bolsonaro has previously stated that the aid payments, which are due to expire this month, will be renewed through the end of the year. However, a planned announcement last Tuesday was delayed after disagreements about the form of future aid payments and related benefits arose between the Economy Ministry and Bolsonaro.
· South Korea's factory activity grows for second month in a row in July
South Korea’s factory output grew for a second straight month in July, after marking the fastest growth since 2009 in June, though a resurgence in coronavirus infections is expected to further weigh on the economy.
Industrial production in July rose by a seasonally-adjusted 1.6% from a month earlier, Statistics Korea said on Monday, down from 7.2% in June and slightly missing the median forecast of a 1.9% rise.
But the economic recovery may lose momentum as South Korea extended Phase 2 social distancing rules - the second-strictest level - for at least another week and toughened restrictions on some businesses to battle the resurgence of the virus in August.
From a year earlier, factory output shrank 2.5%, worse than the previous month’s 0.5% slide and the 1.2% fall tipped in a Reuters survey.
· Japan's Koizumi won't seek to succeed Abe as PM, would back Kono: NHK
Japan’s Environment Minister Shinjiro Koizumi has decided not to join the race to succeed Prime Minister Shinzo Abe, public broadcaster NHK reported on Sunday.
Koizumi, popular son of former maverick premier Junichiro Koizumi, would back Defence Minister Taro Kono if he joins the race for president of the ruling Liberal Democratic Party, NHK said.
The LDP president is virtually assured of being prime minister because of the party’s majority in the lower house of parliament.
· Senior China diplomat says it's possible to agree EU-China investment accord by end-2020
The Chinese government’s top diplomat, State Councillor Wang Yi, said on Sunday it was possible to conclude an EU-China investment accord by the end of 2020.
“I am thinking of the investment agreement. We have the possibility of concluding it before the end of the year. It is important more than ever to take a step,” Wang Yi said, speaking at the IFRI think tank in Paris, via an interpreter.
· China's new tech export controls could give Beijing a say in TikTok sale
China’s new rules around tech exports mean ByteDance’s sale of TikTok’s U.S. operations could need Beijing’s approval, a Chinese trade expert told state media, a requirement that would complicate the forced and politically charged divestment.
· 75% of top executives now say Biden will win the 2020 Presidential election, CNBC survey reveals
According to the most recent CNBC/Change Research Poll, fear over coronavirus has fallen in several key six swing states while at the same time President Donald Trump’s approval rating has seen an uptick. In Arizona, Florida, Michigan, North Carolina, Pennsylvania and Wisconsin, Trump now has an approval rating of 48%, two weeks ago his approval was at 46%.
Despite an uptick in his job approval rating, President Trump is still trailing his Democratic presidential opponent Joe Biden. According to Nate Silver’s FiveThirtEight, Biden is currently favored to win the election — a 70 in100 chance. Those numbers are in line with some of the world’s top business leaders. Seventy-five percent of the CNBC Global CFO Council say Joe Biden will win the U.S. Presidential election in November, according to the latest quarterly survey of members released on Friday. That same number holds true for North American-based members.
The impact of Covid-19 is the obvious leading factor as to why corporations are deciding to slash jobs. More than half of respondents say they will be decreasing the number of employees over the next 12 months; just under 32% of North America respondents anticipate a reduction in their workforce.
Reference: CNBC, Reuters
Thai
Eng