Gold slips as investors look to dollar for safety from coronavirus woes
· Gold fell on Friday, hovering near last session's over two-month low, as investors sought shelter in the dollar from rising coronavirus cases and uncertainties over the next U.S. stimulus to aid the economy.
· Spot gold was down 0.2% to $1,864.39 per ounce by 1:49 p.m. EDT (1749 GMT), while U.S. gold futures settled down 0.6% at $1,866.30 per ounce.
· "The Republicans and Democrats are on the same page about putting some stimulus but they are not being able to decide the amount and that uncertainty is pushing investors towards the dollar," said Edward Moya, senior market analyst at OANDA in New York.
· For the week, gold is down about 4.4% so far, the most in at least six weeks, as the dollar was set for its best week since early April.
· A stronger dollar makes commodities priced in the currency, like gold, more expensive for buyers using other monetary units.
· A key lawmaker said Democrats in the U.S. House of Representatives are working on a $2.2 trillion coronavirus stimulus package that could be voted on next week.
· The Federal Reserve this week talked up the importance of more fiscal stimulus amid investor fears of another economic hit from the coronavirus pandemic.
· Stocks were set to fall by the most for any week since June as concerns over second wave of virus-related lockdowns weighed on investors' risk appetite.
· Gold Price Forecast – Gold Markets Continue to Pressure Downside
Gold markets have broken down towards the bottom of the candlestick from the hammer on Thursday. At this point, if we can break down below the $1850 level it is likely that we continue to go down towards the $1800 level. The $1800 level was an area of importance previously, so I do think that there would be a lot of buyers there. With this, I would be a buyer of the large quantities in that area if we get some type of bounce, because it is the first time, we will have retested the previous resistance.
Looking at this chart, the market is likely to see a lot of volatility, but I do think that longer-term gold is something that will appreciate in value. The 200 day EMA is sitting at the $1754 level and racing towards the $1800 level as well, as the convergence of both a technical and structural support should be an excellent opportunity. Having said that, the market was to break down below the 200 day EMA, then the market could fall apart.
This is all about the US dollar, so make sure you pay attention to it, as the strengthening US dollar could continue to cause major issues with commodities. Quite frankly, the most important indicator that you can use for this market is the US Dollar Index, and trading in the opposite direction, lease for the time being. To the upside, if we were to clear the 50 day EMA which is closer to the $1917 level, gold should take off again.
· Platinum edged down 0.1% to $847.81, while silver fell 0.8% to $23.02 per ounce. Both metals were headed for their worst week since March 20.
· Palladium was down 0.2% at $2,221.20 per ounce.
· Pelosi expresses hope deal can be reached with White House on COVID-19 relief
U.S. House Speaker Nancy Pelosi, the top Democrat in Congress, said on Sunday she thinks a deal can be reached with the White House on a coronavirus relief package and that talks were continuing.
With formal COVID-19 relief talks stalled for weeks, House Ways and Means Committee Chairman Richard Neal on Thursday said Democratic lawmakers were starting to draft a bill totaling at least $2.2 trillion.
Any legislation the Democratic-led House might approve would be unlikely to advance in the Senate, which is controlled by Republicans.
Pelosi and Schumer had originally sought a $3.4 trillion relief package but have scaled back their demands. Meadows has previously said that Trump would be willing to sign a $1.3 trillion bill.
· CORONAVIRUS UPDATES:
Global cases: More than 33.297 million
Global deaths: At least 1.002
U.S. cases: More than 7.32 million
U.S. deaths: At least 209,453
India cases: More than 6.07 million
Brazil cases: More than 4.73 million
· Rise in virus cases adds to economic uncertainty ahead of U.S. election
With COVID-19 deaths in the U.S. topping 200,000 this week following a rise in new daily cases last week for the first time in eight weeks, the role of the economy in the looming presidential election could take on heightened importance -- but it is not clear how.
An incumbent president’s reelection usually is closely tied to the health of the economy. But the links between the virus, the economy and how people will vote in the presidential election remain far from clear.
· China says WHO gave blessing for coronavirus vaccine emergency use programme
The World Health Organization supported China’s campaign to vaccinate certain people against coronavirus in July while clinical trials were still under way, a Chinese health official said on Friday, although some experts have expressed concern about the move.
“At end-June, China’s State Council approved a plan of COVID-19 vaccine emergency use program,” Zheng told a news conference.
“After the approval, on June 29, we made a communication with the relevant representatives of the WHO Office in China, and obtained support and understanding from WHO,” Zheng said.
China’s annual production capacity of COVID-19 vaccines is expected to reach 610 million doses by end-2020 and 1 billion doses by 2021, Zheng said.
In China, the vaccine price will be affordable for the general public, Zheng added.
· China's industrial profits grow for fourth straight month
Profits at China’s industrial firms grew for the fourth straight month in August, buoyed in part by a rebound in commodities prices and equipment manufacturing, the statistics bureau said on Sunday.
China’s recovery has been gaining momentum as pent-up demand, government stimulus and surprisingly resilient exports propel a rebound.
Industrial firm profits grew 19.1% year-on-year in August to 612.81 billion yuan ($89.8 billion), the statistics bureau said.
That compares with a 19.6% increase in July and is the fourth straight month of profit growth.
However, industrial firms’ profits still face external pressures as rising tensions between Washington and Beijing cloud the global trade outlook.
· U.S. tightens exports to China's chipmaker SMIC, citing risk of military use
The United States has imposed restrictions on exports to China’s biggest chip maker SMIC after concluding there is an “unacceptable risk” equipment supplied to it could be used for military purposes.
· Judge blocks Trump administration’s ban on new TikTok downloads from US app stores
A judge has temporarily blocked an order from the Trump administration that would have banned TikTok from being downloaded from U.S. app stores.
At the end of the day on Sunday, the U.S. government could have forced app stores run by Apple and Google to remove TikTok.
But after a hearing on Sunday, Judge Carl Nichols of United States District Court for the District of Columbia, granted an injunction against that order.
· North Korea warns of naval tensions during search for slain South Korean
North Korea said on Sunday it is searching for the body a South Korean official killed by its troops, but warned that South Korean naval operations in the area threatened to raise tensions by intruding across a disputed sea border.
Reference: CNBC, Reuters, Worldometers, FX Empire
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