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Gold firms as dollar eases; ECB meeting eyed

· Gold prices rose to their highest level in nearly a week on Wednesday, as the dollar weakened and concerns over a delay in the development of a coronavirus vaccine drove investors toward the safe-haven metal.

· Spot gold rose 0.7% to $1,945.20 per ounce, shaking off initial declines. U.S. gold futures settled up 0.6% at 1,954.90.

· “We are seeing some cracks in the dollar after the European Central Bank painted a little bit of a rosy picture and gold is moving higher on that,” said Bob Haberkorn, senior market strategist at RJO Futures.

“But this rally in gold seems to be fragile,” Haberkorn said. “From a technical standpoint we need gold to close above $1,950 for the bulls to take control.”

· The dollar fell 0.2% after Bloomberg reported the ECB’s growth and inflation projections to be published on Thursday will show only slight changes compared with the bank’s June forecasts.

· ECB board member Isabel Schnabel said earlier that economic developments since June have been broadly in line with the bank’s expectations so the bank’s “baseline” still held.

· Meanwhile, global trials of AstraZeneca’s experimental COVID-19 vaccine were paused due to an unexplained illness in a study participant.

· The news of the delay may be indirectly supportive for gold, as it could spell a prolonged economic slowdown and further expectations of fiscal stimulus, said Saxo Bank analyst Ole Hansen.

· The pandemic has forced major central banks to provide massive stimulus, helping gold gain about 28% so far this year since it is considered a hedge against potential currency debasement and inflation.

· Elsewhere, platinum was up 1.5% at $914.58 an ounce. On Tuesday, the World Platinum Investment Council changed its forecast for the market in 2020 from a surplus to a deficit.

· Silver rose 0.4% to $26.81, while palladium was flat at $2,275.47.

· AstraZeneca pauses coronavirus vaccine trial as participant illness investigated

AstraZeneca’s (AZN.L) suspension of global trials of its experimental coronavirus vaccine after an illness in a study subject in Britain has cast doubt on prospects for an early rollout of one of the most advanced COVID-19vaccines in development.

AstraZeneca, which is developing the vaccine with Oxford University researchers, said on Tuesday it had paused late-stage trials to allow an independent committee to review safety data, and it was working to minimize any potential impact on the timeline.

The patient was reportedly suffering from neurological symptoms associated with a rare spinal inflammatory disorder called transverse myelitis. AstraZeneca on Wednesday said a final diagnosis was still pending as more tests are carried out.

U.S. National Institutes of Health Director Francis Collins told a Senate committee hearing on Wednesday that work was underway “to see if anybody else who received that vaccination or any other might have had a similar finding of a spinal cord problem.”

· Covid-19 vaccine trial participant had serious neurological symptoms, but could be discharged today, AstraZeneca CEO says

The participant who triggered a global shutdown of AstraZeneca’s Phase 3 Covid-19 vaccine trials was a woman in the United Kingdom who experienced neurological symptoms consistent with a rare but serious spinal inflammatory disorder called transverse myelitis, the drug maker’s chief executive, Pascal Soriot, said during a private conference call with investors on Wednesday morning.

The woman’s diagnosis has not been confirmed yet, but she is improving and will likely be discharged from the hospital as early as today, Soriot said.

· U.S. job openings push higher; more workers quitting

U.S. job openings increased further in July, though more workers quit their jobs in the retail as well as professional and business services industries likely because of fears of exposure to COVID-19 and problems with childcare.

Despite the surge in vacancies reported by the Labor Department on Wednesday in its monthly Job Openings and Labor Turnover Survey, or JOLTS, the number of unemployed people competing for a new job remained relatively high in July.

Job openings, a measure of labor demand, jumped 617,000 to 6.6 million on the last day of July. Still, vacancies remain below their level of 7 million in February.

· U.S. House speaker says violating Good Friday accord would kill any U.S.-UK trade deal

U.S. House of Representatives Speaker Nancy Pelosi said on Wednesday any potential U.S.-UK trade deal would not pass the U.S. Congress if Britain undermines the Good Friday Agreement as it exits the European Union.

· Brexit in crisis: EU 'very concerned' by UK plan to break divorce treaty

Britain plunged Brexit trade talks into crisis on Wednesday by explicitly acknowledging that it could break international law by ignoring some parts of its European Union divorce treaty, prompting a rapid rebuke from the EU’s chief executive.

Brushing aside warnings from Brussels that it was scuppering any trade deal, London said in the proposed legislation that it would ignore parts of the Withdrawal Agreement, which was only signed in January.

· Bank of Canada adds to QE flexibility, housing starts hit 13-year record

The Bank of Canada held its key overnight interest rate steady on Wednesday but left the door open on possible future changes to bond buying, while a 13-year high for Canadian housing starts added to evidence of economic recovery.

Canada’s central bank said in a statement that the third-quarter rebound was looking to be faster than anticipated, though it noted that as the economy moves from the recovery to recuperation phase of the COVID-19pandemic, it will continue to require extraordinary monetary policy support.

Reference: CNBC, Reuters, Bloomberg