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Gold rebounds after stock market rout lifts safe-haven demand

· Gold prices rebounded from a near two-week low hit earlier on Tuesday, after a sell-off in stock markets prompted investors to seek refuge in the safe haven metal.

· Spot gold rose 0.4% to $1,936.87 per ounce after falling as much as 1.2% to $1,906.24. U.S. gold futures settled up 0.5% at $1,943.20.

· “We saw a bounce off the lows in gold after a sharp drop in U.S. equities sparked some safe haven buying. People are confused, they don’t know where the bottom is at in the equity markets right now,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

“Gold has been trapped in a really tight trading range. If we can break out over $1,960, it might rekindle some life back into bulls,” Streible said.

· Global equity markets and oil prices tumbled after a sharp sell-off in technology stocks, Brexit uncertainty and on concerns over flare-ups in coronavirus cases.

· Gold’s gains came despite a stronger dollar, which rose 0.7% against rivals.

· Investors are now awaiting an ECB policy meeting due on Thursday, while the U.S. Federal Reserve’s next meeting is scheduled for next week.

· “All the central banks are in the same boat. They will have to keep printing money, keep easing policy, in order to fight the slump we are in” and that will keep gold supported, said Edward Meir, an analyst at ED&F Man Capital Markets.

· Bullion has risen over 27% so far this year, after central banks globally flooded markets with extraordinary stimulus to offset the economic damage inflicted by the coronavirus pandemic, as it is considered a hedge against inflation and currency debasement.

· Elsewhere, silver fell 0.8% to $26.78 per ounce and platinum was up 0.5% to $903.33, while palladium dipped 0.6% to $2,280.97.

· CORONAVIRUS UPDATES:

Global cases: More than 27.72 million

Global deaths: At least 900,858

U.S. cases: More than 6.513 million

U.S. deaths: At least 194,014

· China reports two new COVID-19 cases vs 10 a day earlier

Mainland China reported two new COVID-19 cases on Sept. 8, down from 10 a day earlier, the country’s national health authority said on Wednesday.

The National Health Commission said in a statement that both cases were imported infections involving travellers from overseas, marking the 24th straight day of no local infections.

The number of new asymptomatic cases also fell to eight from 13 reported a day earlier. China does not count these symptomless patients as confirmed COVID-19 cases.

The total number of confirmed COVID-19 cases for mainland China now stands at 85,146 while the death toll remained unchanged at 4,634.

· No-deal Brexit is the most likely outcome of trade talks, former EU chief says

U.K. and EU negotiators are unlikely to reach a trade agreement in the coming months, Jean-Claude Juncker, the former president of the European Commission, said at an event Tuesday.

The two negotiating teams started their eighth round of discussions over new trade arrangements on Tuesday — a necessary step after the U.K. left the European Union in January and agreed to work toward a trade deal with the bloc, to be implemented in January 2021.

However, the trade talks have not made any significant progress so far and there are growing doubts that this will change in the coming weeks.

· China accuses U.S. of ‘bullying’ as it touts new global data security push

China launched a global data security initiative on Tuesday outlining principles that should be followed in areas from personal information to espionage.

The initiative, announced by Foreign Minister Wang Yi in Beijing, comes as the U.S. continues to put pressure on China’s largest technology companies and convince countries around the world to block them.

· Trump says he is willing to spend his own money to win re-election

U.S. President Donald Trump, facing the possibility of a cash crunch, said on Tuesday he would spend “whatever it takes” of his own money to finance his 2020 presidential campaign against Democrat Joe Biden if he had to.

· South Korea August jobless rate logs fastest monthly drop since 1999

South Korea’s unemployment rate dropped in August by the sharpest monthly decline since 1999 as more people stopped looking for work amid the coronavirus pandemic and floods.

The seasonally adjusted unemployment rate declined to 3.2% in August, down one full percentage point from 4.2% in July, data from Statistics Korea showed on Wednesday.

Reference: CNBC, Reuters