Gold jumps on U.S. stimulus expectations, easing dollar
· Gold jumped 1% on Monday on optimism around a U.S. stimulus bill and a weakened dollar, despite gains in the stock markets after reports that U.S. President Donald Trump could soon be discharged from the hospital.
· Spot gold was up 0.7% at $1,912.80 per ounce after hitting the highest since Sept. 22 at $1,918.36. U.S. gold futures settled up 0.7% to $1,920.10.
· Optimism over fiscal stimulus came into play after upbeat weekend comments from U.S. House Speaker Nancy Pelosi, who said progress was being made on relief legislation.
· “Maybe there is a little skinnier deal in the horizon that Pelosi would agree to and Republican party would agree to and I think the stimulus will be a boon for the metals,” said Daniel Pavilonis, senior market strategist at RJO Futures.
A little bit of risk-on sentiment has been a negative for gold, Pavilonis said, adding that “we could see another sideways week.”
· The dollar was down 0.4% against rivals, making gold cheaper for holders of other currencies.
· Global stocks cheered news that Trump could be discharged from the hospital as soon as Monday, although outside experts warned that his case may be severe.
· Trump’s COVID-19 infection has also raised uncertainties around the U.S. presidential election on Nov. 3.
· “Barring a split government outcome, both administrations are likely to push through a large-scale fiscal deal in no time that would help de-bottleneck the real rate suppression, lifting precious metals in the process,” TD Securities said in a note.
“Considering a Blue Wave would likely result in the largest package, (Democratic candidate Joe) Biden’s election odds are increasingly likely to drive gold prices in the coming month.”
· Looking ahead, markets will be watching out for the release of minutes from U.S. Federal Reserve’s September meeting on Wednesday.
· Among other metals, silver gained 2.4% to $24.27 per ounce, platinum rose 1.3% to $893.00 and palladium climbed 2.5% to $2,366.00.
· Pelosi, Mnuchin speak for an hour but don’t reach a coronavirus stimulus deal
House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin spoke for about an hour Monday but emerged from a phone call with no coronavirus stimulus deal.
The pair expects to talk again Tuesday as the White House and Democratic leaders try to craft an elusive fifth pandemic relief package, Pelosi’s spokesman Drew Hammill said in a tweet. Pelosi and Mnuchin plan to exchange more details about their proposals Monday, he added.
The sides have made a final push in recent days to strike an aid agreement and pass legislation before the Nov. 3 election. While Pelosi and Mnuchin seem to have made progress toward a deal, they had a range of outstanding disagreements heading into the weekend.
Economists have worried a lack of new fiscal stimulus will stunt a slowing U.S. economic recovery.
· Trump returns to the White House as he continues coronavirus treatment
President Donald Trump left Walter Reed National Military Medical Center on Monday to return to the White House, where he will continue to be treated for the coronavirus even as he looks to restart his reelection campaign.
“Will be back on the Campaign Trail soon!!! The Fake News only shows the Fake Polls,” Trump tweeted.
· Doctors worry Trump could be ‘overtreated’ for coronavirus because he’s a VIP
President Donald Trump’s doctors are using almost every drug in the Covid-19 arsenal to treat him, worrying some physicians that they might be going overboard because he is a VIP.
· White House staff, top Republicans who have tested positive for COVID-19
A growing number of White House staff and senior Republicans have tested positive for COVID-19 since President Donald Trump revealed he had contracted the respiratory disease.
The infections have roiled the presidential campaign, now in its final month, rattled financial markets and slowed the work of Congress, with the Senate vowing to delay any votes now that three members of the Republican majority have tested positive.
Several people who met with the president last week said they had since tested negative, but it can take days for someone who has been exposed to the virus to develop symptoms or to test positive. Below is a list of people close to Trump who have tested positive for coronavirus in recent days.
· Trump’s coronavirus infection and signs of economic weakness pose reelection challenges
President Donald Trump’s path to reelection hinges largely on the trajectory of the coronavirus and its impact on the national economy, and he’s gotten unsettling news about both lately.
Comparatively lackluster job growth in September coupled with the coronavirus infection that hit the president and multiple others in his orbit set a troubling landscape with less than month to go before the showdown against former Vice President Joe Biden.
With polls indicating Trump losing ground, he can hardly afford any additional negative signs.
As both issues have played out over the past several days, the gap between Trump and Biden is growing.
Biden now holds an 8.3 percentage point lead over Trump, according to the latest RealClearPolitics consensus. That split has widened somewhat over the past several days, as an NBC News/Wall Street Journal poll released Sunday showed Biden with a 14-point edge.
There will be no further significant data points between now and the election for the president to showcase his job-creation skills.
While he can tout the 11.4 million jobs that have been recaptured since the economic shutdown of March and April, the September nonfarm payrolls count was less than half the nearly 1.5 million added in August. The unemployment rate has fallen to 7.9%. from 14.7% in April, but that’s still the highest for any sitting president at the time of reelection going back to at least 1948.
At the same time, weekly jobless claims have been stuck above 800,000, and his Republican Party negotiators cannot find middle ground with congressional Democrats for another stimulus bill to bring back more jobs.
· Trump intends to participate in October 15 U.S. presidential debate: campaign
· Mike Pence and Kamala Harris vice presidential debate will have plexiglass barrier because of coronavirus concerns
· Fed must be 'in it to win it' on inflation goal: Evans
Chicago Federal Reserve Bank President Charles Evans on Monday said he expects U.S. inflation to reach 2% by 2023 and wants to push it to 2.5% to offset years of below-target price rises.
· Bank of England's Haskel keeps door open to negative rates, sees risks to growth
· CDC revises coronavirus guidance to acknowledge that it spreads through airborne transmission
The Centers for Disease Control and Prevention revised its coronavirus guidance Monday, acknowledging that it can sometimes spread through airborne particles that can “linger in the air for minutes to hours” and among people who are more than 6 feet apart.
· WHO says 10% of global population may have been infected with virus
· IMF urges infrastructure investment to boost post-COVID growth
The International Monetary Fund on Monday said member governments should seize a low interest rate opportunity to invest in infrastructure to drive recovery from the coronavirus pandemic and a shift toward greener energy.
· U.S. commercial bankruptcies up 33% year to date
U.S. commercial bankruptcy filings are up 33% so far this year with new cases in September surging by 78% from a year earlier as the recession triggered by the COVID-19 pandemic hits small businesses, data released on Monday showed.
Reference: CNBC, Reuters
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