Gold climbs to 1-week high on dollar slide, stimulus optimism
· Gold rose to its highest in a week on Tuesday as the dollar weakened and hopes rose for an additional fiscal stimulus for the American economy, ahead of the first U.S. presidential debate.
· Spot gold gained 0.9% to $1,896.96 per ounce at 1:58 p.m. EDT (1758 GMT), while U.S. gold futures settled up 1.1% at $1,903.20.
· Gold, seen as a hedge against inflation and currency depreciation, has gained about 24% so far this year on the back of monetary stimulus from major central banks and governments.
· Helping gold, the dollar was down 0.4% against a basket of other major currencies as markets waited for the first presidential debate between President Donald Trump and Democratic rival, Joe Biden at 2100 ET (0100 GMT).
· “The tide may be shifting slightly back to gold’s favor,” James Steel, chief precious metals analyst at HSBC said in a note.
“As the focus of the market shifts more decisively to the U.S. elections and the uncertainty that this election cycle brings, it looks like gold and silver have been given a reprieve from last week’s heavy liquidation.”
U.S. Treasury Secretary Steve Mnuchin and House Speaker Nancy Pelosi “slowly coming to terms over the second stimulus plan is obviously a supportive environment,” he added.
· Mnuchin and Pelosi are scheduled to speak on Tuesday about coronavirus relief legislation, White House economic adviser Larry Kudlow said.
This comes after Pelosi on Monday said Democratic lawmakers unveiled a new $2.2 trillion coronavirus relief bill.
· Silver rose 1.3% to $24.02 per ounce, platinum added 0.3% to $881.90 and palladium was 2.1% higher at $2,301.78.
· U.S. consumer confidence posts biggest gain in 17 years; downside risks remain
U.S. consumer confidence rebounded by the most in 17 years in September amid an improvement in labor market views, but it remained below levels that prevailed before the COVID-19 pandemic struck the nation early this year.
The surge in confidence reported by the Conference Board on Tuesday came despite a resurgence in new coronavirus cases in some parts of the country and government help for businesses and the unemployed drying up. Consumers also appeared to shrug off growing uncertainty ahead of the Nov. 3 presidential election and signs the economy’s recovery from the recession was slowing.
The Conference Board’s consumer confidence index increased 15.5 points to a reading of 101.8 this month. That was the largest gain since April 2003. Economists polled by Reuters had forecast the index edging up to a reading of 89.5 in September. The index was at 132.6 in February.
· Pelosi 'hopeful' as she and Mnuchin speak on coronavirus aid, plan further talks
U.S. House Speaker Nancy Pelosi said on Tuesday she hoped to have a coronavirus aid deal with the White House this week, after speaking with Treasury Secretary Steve Mnuchin for about 50 minutes and making plans for further talks on Wednesday.
· Stopgap bill funding U.S government through December 11 advances in Senate
The U.S. Senate voted overwhelmingly on Tuesday to advance a temporary funding bill to keep the government open through Dec. 11, with final passage of the measure expected on the deadline, Wednesday.
Government funding runs out at midnight Wednesday. The legislation, if passed by then and signed into law by President Donald Trump, would maintain current funding levels for most programs, avoiding a government shutdown in the middle of a pandemic and weeks ahead of the Nov. 3 U.S. election.
The Senate voted 82-6 on a procedural motion to advance the temporary funding bill, with all six no votes cast by Republicans.
· NY Fed's Williams sees about three years for full U.S. recovery
The U.S. recovery from the coronavirus-linked recession has been more robust than expected, a top Federal Reserve policymaker said on Tuesday, though he added it could be about three years before the economy regains its full strength.
“We want to get back to maximum employment as soon as possible,” New York Fed President John Williams said, adding that the economy would be strong and close to full employment “in about three years time.”
Lack of fiscal support could also weaken the recovery, Williams told reporters after the event. “I do think the economy is on a pretty good trajectory so it’s really a matter of if there’s more or less fiscal policy that maybe tilts that trajectory,” Williams said.
The potential development next year of a vaccine or other treatments for the virus will be important in helping consumers feel comfortable with engaging in social activities, and more fiscal support will be needed to help get consumers and businesses to that point, Williams said.
· World Bank seeks board approval for $12 billion coronavirus vaccine financing plan
World Bank President David Malpass said on Tuesday he is seeking board approval for a $12 billion coronavirus vaccine financing plan to help poor and developing countries secure a sufficient share of vaccine doses when they become available in the coming months.
· U.S. intelligence reports warn of extremist threat around election
U.S. security officials are warning that violent domestic extremists pose a threat to the presidential election next month, amid what one official called a “witch’s brew” of rising political tensions, civil unrest and foreign disinformation campaigns.
· UK's Brexit treaty override powers approved by parliament's lower house
Britain’s House of Commons approved legislation on Tuesday that gives ministers the power to break its divorce deal with the European Union, despite the threat of legal action from Brussels and unrest within the governing Conservative Party.
The UK Internal Market Bill, which ministers acknowledge breaks international law, was approved by 340 votes to 256 and now passes to the House of Lords for debate.
· China says manufacturing activity expanded in September
China on Wednesday announced that manufacturing activity expanded in the month of September.
The official manufacturing Purchasing Manager’s Index (PMI) for the month of September came in at 51.5 as compared to 51.0 in August, according to the National Bureau of Statistics.
· North Korea says 'faults' found in anti-epidemic work amid controversy over slain South Korean
North Korea has discovered unspecified “faults” in its anti-epidemic measures, state media said on Wednesday, amid controversy over the death of a South Korean man whom Pyongyang said was killed to prevent the coronavirus.
North Korean leader Kim Jong Un convened a meeting of the ruling Worker’s Party’s powerful politburo on Tuesday to review its anti-COVID-19 measures and discuss ways to improve them, the official KCNA news agency said.
Reference: CNBC, Reuters
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