Gold jumps on weaker dollar, U.S. stimulus bets
Gold jumped over 1% on Friday en route to a second straight weekly gain, as the dollar weakened and renewed negotiations for U.S. stimulus prompted investors to buy bullion as a hedge against inflation.
Spot gold rose 1% to $1,912.22 per ounce, up 0.7% so far this week. U.S. gold futures gained 1.2% to $1,917.90.
“The gyrations on whether we are going to get a stimulus or not seems to be affecting gold prices; gold has rallied on huge stimulus from the U.S. Federal Reserve and the government, and if that continues, it will support gold further,” said Robin Bhar, an independent analyst.
U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin resumed their talks over the coronavirus aid plan, after U.S. President Donald Trump called off negotiations earlier this week. Bhar added, “investors who have a portfolio in equities, fixed income will also try to find ways of hedging the uncertainty on the economy and the stimulus.”
Gold, considered a hedge against inflation and currency debasement, has gained 26% this year, boosted by massive stimulus globally to cushion the pandemic’s economic impact.
The dollar fell against rivals, amid growing bets that Joe Biden would come out on top in the U.S. presidential elections and possibly offer more stimulus post that.
The prospect of a Democrat win boosts the incentive to hold gold as a new relief package can be built if the ongoing stimulus talks fall apart, said OANDA analyst Craig Erlam.
Meanwhile, gold-backed exchange traded funds added over 1,000 tonnes of bullion worth $60 billion to their stockpile in the first nine months of 2020, the World Gold Council said.
Silver rose 1.7% to $24.24 per ounce, up over 2% for the week. Platinum gained 1.6% to $875.80 and palladium climbed 1.3% to $2,401.99.
Dollar dips on stimulus optimism, bets on Biden victory
The dollar fell to three-week lows on Friday on optimism that a deal for new U.S. stimulus would be reached, and as investors bet that Democrat Joe Biden is more likely to win the U.S. presidency and offer a larger economic package.
The dollar index against a basket of major currencies fell 0.54% to 93.05, the lowest since September 21, and fell below its 50-day moving average for the first time since then. It has held within a range from 91.74 to 94.75 since late July.
The euro rose 0.57% to $1.1825. The greenback weakened 0.39% against the Japanese yen to 105.60 yen.
The U.S. currency also fell on rising expectations that Biden will win the Nov. 3 election, and that Democrats could win the Senate. A Democratic victory would likely result in larger stimulus, which would be negative for the dollar.
The offshore yuan strengthened to 6.6778, the strongest since April 2019.
The British pound rose, brushing off worse than expected UK growth data as investors became more optimistic about a Brexit deal being reached ahead of a key European Council summit next week.
Sterling gained 0.79% to $1.3035.
Speculators cut short dollar bets to lowest since July -CFTC, Reuters
Speculators reduced their net short dollar positions in the latest week to the lowest level since late July, according to calculations by Reuters and U.S. Commodity Futures Trading Commission data released on Friday.
The value of the net short dollar position fell to $28.35 billion in the week ended Oct. 6, compared with a net short of $30.47 billion the previous week. U.S. net shorts hit a more than nine-year high of $33.68 billion in late August.
Meet the Americans 'standing by' for possible election violence
Some Americans worried about possible violence after the U.S. presidential election are forming community watch groups, others are working on conflict de-escalation and still others are purchasing guns, according to two dozen voters, online groups and data surveyed by Reuters.
U.S., AstraZeneca strike deal for COVID-19 antibody treatment touted by Trump
The U.S. government has awarded $486 million to AstraZeneca Plc to develop and secure supplies of up to 100,000 doses of COVID-19 antibody treatment, a similar class of drug that was used in treating President Donald Trump.
Pelosi, Mnuchin fail to reach COVID-19 stimulus deal, but talks go on amid Republican doubts
U.S. House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin failed on Friday to reach agreement on a COVID-19 stimulus package, while the top Senate Republican voiced doubt that Congress would act before the Nov. 3 election.
Mnuchin floated a new $1.8 trillion proposal in a 30-minute Friday afternoon phone conversation, according to the White House. But Pelosi aide Drew Hamill said the offer lacked a broad plan to contain the pandemic. Talks will continue, he said.
Trump to resume campaigning; second debate canceled
U.S. President Donald Trump will resume in-person campaigning on Saturday after being sidelined by a case of COVID-19, but a debate next week against his presidential election opponent Joe Biden was canceled because Trump refused to participate.
October 15 U.S. presidential debate officially canceled after Trump balked
The planned Oct. 15 debate between U.S. President Donald Trump and Democratic challenger Joe Biden was officially canceled on Friday a day after Trump rejected a decision by the nonpartisan commission organizing it to change its format to a virtual event to guard against the spread of COVID-19.
The Commission on Presidential Debates (CPD) said in an emailed statement: “It is now apparent there will be no debate on October 15, and the CPD will turn its attention to preparations for the final presidential debate scheduled for October 22.”
Britain, EU agree to pursue mini-deals if talks fail next week: The Times
Britain and the European Union have agreed to pursue 'mini-deals' in areas of mutual interest, such as aviation and road transport, even if trade negotiations for a wider deal break down next week, The Times here reported on Saturday.
European Union chief Brexit negotiator Michel Barnier and Britain’s chief negotiator David Frost have agreed that even if a wider deal proves impossible to reach on Oct. 15, contact will continue, The Times said.
In such an event, the two sides would spend November attempting to put together mini-deals to offset the likely disruption when the transition period ends on Dec. 31, the newspaper said, without citing sources.
COVID-19 surges in U.S. Midwest, Broadway dark until June
The Broadway closure that began in March had been due to end in early January until the Broadway League industry group announced the extension on Friday.
Germany agrees stricter anti-COVID measures for virus hot spots
Chancellor Angela Merkel said she and mayors from Germany’s 11 largest cities agreed on Friday to adopt stricter anti-coronavirus measures if infections exceed a threshold of 50 cases per 100,000 population in a week.
Trump steel tariffs bring job losses to swing state Michigan
Biden says 'chicanery' at polls is the only way he could lose U.S. election
Democratic U.S. presidential nominee Joe Biden said on Saturday “the only way” he could lose to President Donald Trump was through “chicanery,” before clarifying that he will accept the election result.
U.S. sanctions turn up heat but Huawei serving European 5G clients, executive says
UK study tests if BCG vaccine protects against COVID
The widely used BCG tuberculosis vaccine will be tested on frontline care workers in Britain for its effectiveness against COVID-19, researchers running the UK arm of a global trial said.
“BCG has been shown to boost immunity in a generalised way, which may offer some protection against COVID-19,” Professor John Campbell, of the University of Exeter Medical School, said.
U.S. COVID-19 cases hit two-month high, 10 states report record increases
New cases of COVID-19 in the United States hit a two-month high on Friday with over 58,000 infections of the coronavirus reported and hospitalizations in the Midwest at record levels for a fifth day in a row, according to a Reuters analysis.
ECB's Visco says bank needs symmetrical inflation target, more transparency: newspaper
Board member Ignazio Visco said the European Central Bank should set a clearer inflation target and should attribute the opinions published in its minutes to the relevant policymakers for greater transparency.
Visco, who is governor of the Bank of Italy, told daily newspaper Il Corriere della Sera that the ECB’s current target of inflation below but close to 2% in the medium term was “vague and difficult to understand”.
“I think the target must be symmetrical,” he said in an interview published on Sunday.
“Levels of one percent or 1.5% are too low as we need flexibility margins to face crisis,” he said.
UK urges businesses to prepare for end of Brexit transition
Britain’s government on Sunday urged businesses to prepare for the end of the Brexit transition period, saying that they need to take action whether or not a trade deal with the European Union is clinched.
Brexit deal needs to be done by start of November - France
The European Union and Britain must reach an agreement on their post-Brexit ties by the start of November, France’s European affairs minister said on Sunday, but the bloc would not accept a bad deal just for the sake of reaching a compromise.
ECB's Lane braces for tougher phase for euro zone economy: WSJ
The euro zone zone economy is entering a tougher phase as a surge in coronavirus cases puts a question mark over the recent rebound, the European Central Bank’s chief economist Philip Lane said in an interview published on Sunday.
EU trade chief calls on U.S. to drop tariffs in Airbus-Boeing dispute: FT
The European Union's new trade chief Valdis Dombrovskis has told the U.S. to withdraw tariffs on more than $7 billion of EU products or face additional duties on exports to Europe, as he urged a settlement to the dispute over Airbus SE AIR.PA and Boeing Co BA.N, the Financial Times reported on Sunday.
HSBC calls start of a ‘great rebalancing’ as the global economy enters a flatter stage of the recovery
A “great rebalancing” of investor portfolios away from core government bonds and a “coupon clipping environment” for markets are coming into view in the fourth quarter, according to HSBC Global Asset Management.
In its quarterly outlook report, HSBC characterizes the global economy as entering the second, flatter, phase of a two-stage “swoosh-shaped” recovery in which growth is set to moderate.
Reference: CNBC, Reuters
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