Gold drops as dollar extends gains; focus on Fed commentary
· Gold fell for a second straight session on Tuesday as the dollar climbed to a near two-month peak, with investors keeping a close eye on remarks from U.S. Federal Reserve officials on the state of the economy.
· The path ahead for the economy remains uncertain and the U.S. central bank will do more if needed, Federal Reserve Chair Jerome Powell told a congressional panel on Tuesday.
Separately, Chicago Federal Reserve President Charles Evans said the U.S. economy risks recession, if the U.S. Congress fails to pass a fiscal package.
· Spot gold had fallen 0.4% to $1,904.34 per ounce, reversing earlier gains. U.S. gold futures settled down 0.2% at 1,907.60 per ounce.
· A steep sell-off across asset classes on Monday dragged gold down to its lowest level since Aug. 12, at $1,882.70.
· “When we see gold and equities down both at the same time, investors need cash. Precious metals are always a good source of raising cash. It was a factor yesterday but today we think it’s mostly dollar and technical,” said Chris Gaffney, president of world markets at TIAA Bank.
“The dollar is maintaining its strength and fundamentally that is weighing on gold prices.”
· The dollar notched a high since late-July against a basket of other major currencies, with Washington’s lack of progress on reaching a fiscal stimulus agreement.
· Expectations are that the passing of Justice Ruth Bader Ginsburg would create additional divisiveness between the Democrats and the Republicans, which would lead to a lesser possibility of a stimulus plan being put forth, said David Meger, director of metals trading at High Ridge Futures.
· Rising coronavirus cases have cast a shadow on hopes of quick economic recovery and prompted central banks to loosen their monetary stance, helping gold prices climb about 25% so far this year.
But, gold has pared gains since hitting a record peak in August as the U.S. Congress for weeks has remained deadlocked over the size and shape of its next coronavirus-response bill.
· Elsewhere, silver fell 1.5% to $24.37, platinum dropped 1.4% to $869.31 and palladium was down 1.1% to $2,248.03.
· Mnuchin, Powell Urge More Spending to Help Economy Recover From Pandemic
The two top U.S. economic officials told lawmakers that emergency loan programs to support the coronavirus-stricken economy were largely working as intended and that more government spending would be needed to sustain the recovery.
Treasury Secretary Steven Mnuchin said he didn’t anticipate further changes that would ease access to loan programs established jointly with the Federal Reserve. “I unfortunately think there’s not much more we can do,” he told the House Financial Services Committee on Tuesday.
· House passes spending bill to avoid government shutdown, sends it to Senate
The House passed a bill Tuesday that would fund the government into December and avoid a shutdown before a Sept. 30 deadline.
After clearing the House in an overwhelming vote, the legislation heads to the Republican-held Senate. Earlier Tuesday, House Speaker Nancy Pelosi said she reached a spending agreement with Treasury Secretary Steven Mnuchin and Republicans.
Pelosi said the proposal would include $8 billion for nutrition assistance for schoolchildren and families. It renews Pandemic EBT, a program that provides food benefits while schools are closed set to expire at the end of September, for a full year.
It also adds increased accountability for farm aid money to prevent it from gong to large oil companies, according to Pelosi. Senate Majority Leader Mitch McConnell had criticized a lack of farm assistance funds in a bill House Democrats released Monday.
The bill would fund the government through Dec. 11, avoiding a potentially chaotic shutdown during the coronavirus pandemic and before the Nov. 3 election. Lawmakers then aim to hash out an agreement to fund the government through Sept. 30, 2021, the end of the next fiscal year.
· Economy doesn’t need more stimulus for a V-shaped recovery, Trump advisor Kudlow says
Larry Kudlow, President Donald Trump’s top economic advisor, said Tuesday afternoon that the broad economic recovery from Covid-19 doesn’t necessarily require additional fiscal stimulus even if select industries or businesses could benefit from more aid.
“I don’t think the V-shaped recovery depends on the package, but I do think a targeted package could be a great help,” Kudlow said from the White House on CNBC’s “The Exchange.” “Even though I think the economy is improving nicely, it could use some help in some key, targeted places.”
· U.S.-China tensions take center stage at U.N. as Trump accuses Beijing of unleashing 'plague'
President Donald Trump on Tuesday called on world leaders at the United Nations to “hold China accountable” for the coronavirus pandemic.
Trump, a frequent critic of the U.N., slammed the Chinese government and the World Health Organization for the deadly virus and the social and economic fallout from the health crisis.
· U.S. House passes China forced labor bill near unanimously
The U.S. House of Representatives on Tuesday voted near unanimously to pass legislation to restrict imports of goods made using forced labor from China, as lawmakers look to address the treatment of Uighur Muslims in China’s Xinjiang region.
The Democratic-led House passed the measure by 406 to 3.
The United States and other countries have been ratcheting up pressure on China over its treatment of Uighurs in Xinjiang, where the United Nations cites credible reports as saying 1 million Muslims held in camps have been put to work.
· CORONAVIRUS UPDATES:
Global cases: More than 31.76 million
Global deaths: At least 974,620
U.S. cases: More than 7.09 million (+35,696)
U.S. deaths: At least 205,471 (+969)
India cases: More than 5.64 million (+80,391)
India deaths: At least 90,021 (+1,056)
Brazil cases: More than 4.59 million (+35,252)
Brazil deaths: At least 138,159 (+809)
· Wisconsin sounds alarm after surge in COVID-19 cases as nation surpasses 200,000 deaths
Wisconsin Governor Tony Evers declared a new public health emergency and extended a face coverings mandate into November to fight a flare-up of coronavirus cases, as the United States surpassed the grim milestone of 200,000 COVID-19 deaths on Tuesday.
· Trump says U.S. will remain open as UK imposes coronavirus restrictions: ‘We’re not going to be doing that’
President Donald Trump on Tuesday said that the United States would not impose a lockdown to curb the spread of the coronavirus following additional new measures imposed on businesses and residents in the U.K. to control its increasing case count.
· PM Johnson: We need new COVID-19 restrictions, but economy can keep moving
British Prime Minister Boris Johnson said on Tuesday he had to take action to halt the spread of COVID-19, but that the economy could continue to move forward despite new restrictions.
· Trump and Biden to face questions on Covid-19, Supreme Court, economy in first presidential debate
President Donald Trump and Democratic challenger Joe Biden will be questioned on topics including the coronavirus pandemic and the Supreme Court when they face off next week in the first of three debates before the2020 election.
The Commission on Presidential Debates announced Tuesday that the Sept. 29 debate in Cleveland, Ohio, will center around six topics, each of which will receive a 15-minute time slot. The moderator, Fox News’ Chris Wallace, selected the categories, the commission said.
The first debate will be held at Case Western Reserve University and Cleveland Clinic. It is scheduled to start at 9 p.m. ET
The topics are:
Ø The Trump and Biden records
Ø The Supreme Court
Ø Covid-19
Ø The economy
Ø Race and violence in our cities
Ø The integrity of the election
Reference: CNBC, Reuters, Wall Street Journal, Worldometers
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