Gold slides 3% on strong dollar, stimulus concerns; silver tumbles
· Gold slumped over 3% on Monday, sliding to its lowest level in more than a month, as a broader market sell-off driven by uncertainty over more U.S. fiscal stimulus pressured the precious complex along with a stronger dollar.
· Silver plunged 8.3% to $24.53, its lowest level in over a month.
· Spot gold dropped 2.1% to $1,909.05 per ounce, after falling as much as 3.4% earlier in the session, its lowest since Aug. 12. U.S. gold futures settled down 2.6% at 1,910.60.
· “Gold should be trading higher on safe-haven demand but it’s kind of a repeat back like in the spring when the market sell-off comes, market participants have been selling off assets across the board,” said Bob Haberkorn, senior market strategist at RJO Futures.
“There’s just a lack of safe-haven buying and it’s following the sell-off in equities and dollar strength is an additional weakness.”
· Wall Street’s main indexes hit their lowest levels in nearly seven weeks on Monday, while the dollar index rose 0.8% against its rivals, its highest daily percentage gain since March 19.
· “The chances of Congress agreeing on any stimulus package before January is asymptotically close to zero,” said Tai Wong, head of base and precious metals derivatives trading at BMO. “A move back and close above $1,900 is needed to grant a short-term reprieve but looks like we may have to test the lows of the correction, $1,863 at some stage soon.”
· Gold prices are down nearly 10% from an all-time high hit in early August as hopes of further stimulus dwindled.
· The U.S. Congress has for weeks remained deadlocked over the size and shape of a fifth coronavirus-response bill, on top of the approximately $3 trillion already enacted into law.
· Gold has been feeding off progressive rounds of more stimulus and the fact that this has stopped in the United States – at least for now – seems to have halted the gold rally in its tracks, ED&F Man Capital Markets analyst Edward Meir said in a note.
· Investors now await speeches by Fed committee members, including Chairman Jerome Powell, who will appear before Congressional committees later this week.
· In other metals, platinum declined 5.2% to $879.48 after falling as much as 8% earlier in the session and palladium dropped 3.9% to $2,265.10.
· CORONAVIRUS UPDATES:
Global cases: More than 31.47 million
Global deaths: At least 968,865
U.S. cases: More than 7.04 million (+35,343)
U.S. deaths: At least 204,467 (+349)
India cases: More than 5.56 million (+74,493)
India deaths: At least 88,965 (+1,056)
Brazil cases: More than 4.56 million (+15,454)
Brazil deaths: At least 137,350 (+455)
· Europe likely to see more restrictions in coming days as cases rise rapidly
European nations are likely to impose more restrictions on public life in the coming days, analysts warned, as the number of new coronavirus cases continues to rise rapidly.
“Expect lots more restrictions over the days and weeks ahead, especially in Europe,” Deutsche Bank analysts said in a note. “The fact that the virus is already spreading quite rapidly is a big worry.”
UK warning
In the U.K., the government’s top scientists warned the country could expect to see almost 50,000 new cases per day in mid-October if no action is taken.
· Australia's Victoria state reports slight rise in new COVID-19 cases
· Mexico nears 700,000 COVID-19 cases, real toll unknown
· Coronavirus recession to push U.S. debt to nearly twice GDP by 2050 -CBO
The coronavirus pandemic will darken the U.S. long-term fiscal outlook for decades to come, the Congressional Budget Office said on Monday, releasing new forecasts that show federal government debt in 2050 will be nearly twice U.S. economic output.
Without changes to tax and spending laws, the federal debt held by the public will reach 195% of GDP by 2050, the CBO said in its long-term budget outlook - a level approaching the current debt ratios of Japan and Greece.
The non-partisan congressional budget referee said its outlook had deteriorated significantly from a year ago, when it projected U.S. public debt in 2049 would be 144% of GDP. CBO projects federal debt at 98% by the end of 2020, compared with 79% in 2019 and 35% in 2007 before a major financial crisis.
· Jim Cramer says the ‘lockdown trade’ is back as coronavirus concerns rise
CNBC’s Jim Cramer said Monday that investors should look to buy the stocks of companies that excel in a prolonged stay-at-home economy, suggesting there are worrying coronavirus signs in the U.S. and abroad that mean “the lockdown trade” has returned.
Specifically, the “Mad Money” host referenced the rising Covid-19 cases in European nations, with the economic restrictions being reimposed in the U.K. possibly serving as a harbinger for what may come in the U.S.
· Fed's Powell says central bank committed to using all tools to help recovery
The Federal Reserve remains committed to using all the tools at its disposal to help the U.S. economy recover from the blow delivered by the coronavirus pandemic, Chair Jerome Powell said on Monday.
“We remain committed to using our tools to do what we can, for as long as it takes, to ensure that the recovery will be as strong as possible, and to limit lasting damage to the economy,”
Powell said in remarks released ahead of Tuesday’s appearance before the House of Representatives Financial Services Committee, the first of three days of testimony to Congress this week.
· Fed policymakers urge Congress, state and local government action to close racial gaps
· Reuters/Ipsos poll shows Biden ahead in Wisconsin, a close race in Pennsylvania
Democratic presidential candidate Joe Biden appears to be leading President Donald Trump among likely voters in Wisconsin, while the two are about even in Pennsylvania, according to Reuters/Ipsos opinion polls released on Monday.
WISCONSIN:
* Voting for Biden: 48%
* Voting for Trump: 43%
* 48% said Biden would be better at handling the coronavirus pandemic. 40% said Trump would be better.
* 48% said Trump would be better at managing the economy. 42% said Biden would be better.
* 1% said they already had voted.
PENNSYLVANIA:
* Voting for Biden: 49%
* Voting for Trump: 46%
* 48% said Biden would be better at handling the coronavirus pandemic. 44% said Trump would be better.
* 51% said Trump would be better at managing the economy. 45% said Biden would be better.
* 2% said they already had voted.
· Trump to 'cut off' TikTok if deal cannot be saved
President Donald Trump said on Monday that he would save a deal to boost American control of Chinese-owned popular social media app TikTok if possible, but would “cut it off” if not.
Reference: CNBC, Reuters, Worldometers
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