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Gold set for weekly decline as U.S. stimulus hopes ebb

· Gold fell and was on the way to its first weekly decline in three weeks on Friday, as fading chances of a U.S. stimulus agreement before the Nov. 3 presidential election dented the metal’s appeal as an inflation hedge.

· Spot gold fell 0.3% to $1,901.87 per ounce. Bullion is down 1.4% so far this week. U.S. gold futures settled 0.1% lower at $1,906.40.

· “With a stimulus bill this year highly uncertain, gold remains beholden to the USD,” said Tai Wong, head of base and precious metals derivatives trading at BMO.

“While sentiment for gold remains strongly bullish without a strong short-term driver, we seem to be oscillating around $1,900 unable to substantially break the month-long range of $1,850-$1,950.”

· The dollar index eased 0.2% on the day, but was on track for a weekly gain, making it more expensive for holders of other currencies to buy gold.

· A stronger-than-expected U.S. retail sales report lifted appetite for riskier assets, but factory production unexpectedly fell in September.

· Democrats and Republicans seemed unlikely to agree on a U.S. stimulus deal before Election Day even as coronavirus cases continue to rise and a labour market recovery stalls.

· “With so much event risk on the horizon, culminating with the U.S. elections, we have likely seen the lows in gold for the next month or so,” Jeffrey Halley, senior market analyst at OANDA, said in a note.

“Gold’s likely to shift into a $1,900 to $1,975 an ounce range as the elections draw near.”

· Silver shed 0.3% to $24.25 per ounce, but was down over 3% for the week. Platinum eased 0.2% to $862.05, while palladium slipped 0.9% to $2,332.20.

· Senate to vote on $500 billion GOP coronavirus stimulus bill Wednesday

The Senate will vote on a $500 billion coronavirus stimulus bill on Wednesday, Senate Majority Leader Mitch McConnell said Saturday, as a larger bipartisan deal remains elusive despite continued talks between top Democrats and the Trump administration.

McConnell blamed his opponents across the political aisle for the current stalemate, arguing that the Senate has enough time to pass the GOP stimulus package and confirm Supreme Court nominee Amy Coney Barret if “Democrats do not obstruct this legislation.”

“Nobody thinks this $500B+ proposal would resolve every problem forever,” McConnell said in a statement on Saturday. “It would deliver huge amounts of additional help to workers and families right now while Washington keeps arguing over the rest.”

· House Speaker Pelosi 'optimistic' on coronavirus relief deal before U.S. election

In Washington, House Speaker Nancy Pelosi’s office said Saturday evening that she is giving the Trump administration 48 hours to reach an aid deal before the Nov. 3 election. Pelosi and Treasury Secretary Steven Mnuchin continued their discussions over the weekend. They agreed to speak again Monday.

Pelosi’s comments came as hope among market experts for a deal being reached ahead of the election dwindles. This, along with the apparent new wave in coronavirus infections, contributed to a choppy trading action last week.

U.S. stock futures rose on Sunday night as the number of newly confirmed coronavirus cases continues to rise while lawmakers remain at an impasse over a new stimulus deal.

Dow Jones Industrial Average futures were up 101 points, or 0.4%. S&P 500 and Nasdaq 100 futures rose 0.5% and 0.7%, respectively.

· U.S. government budget ends fiscal year with a more than $3 trillion deficit

Efforts to combat the coronavirus pandemic left the U.S. government submerged in red ink as its fiscal year came to a close.

The final tally for the budget deficit in fiscal 2020 came to $3.14 trillion, more than triple last year’s shortfall of $984 billion and double the previous record of $1.4 trillion in 2009, courtesy of a stimulus package passed that year to battle the financial crisis.

Most of the damage to this year’s budget came due to the CARES Act, a $2.2 trillion spending package that included extra unemployment compensation to workers displaced during the pandemic and forgivable loans to business as an incentive to retain workers.

Receipts for the year came to $3.42 trillion against outlays of $6.55 trillion, the biggest of which came during June when the government spent $1.1 trillion, according to the Treasury Department.

The fiscal year ended with government debt at just under $27 trillion, all but $6 trillion of which is held by the public.

· Fed officials call for tougher regulation to prevent asset bubbles: FT

Tougher U.S. financial regulation is needed to avoid the rise of excessive risk-taking and asset bubbles in the markets at a time when the Federal Reserve is keeping interest rates low, two senior Fed officials told the Financial Times in an article published on Saturday.

Boston Fed President Eric Rosengren told the newspaper that the Fed lacked sufficient tools to prevent companies and households from taking on “excessive leverage” and called for a rethink on issues related to U.S. financial stability.

· Thousands protest Trump's Supreme Court pick at Washington Women's March

Thousands marched to the U.S. Supreme Court in Washington on Saturday to commemorate the late Justice Ruth Bader Ginsburg and protest President Donald Trump’s rush to push through Amy Coney Barrett as her replacement.

The U.S. Senate Judiciary Committee has scheduled an Oct. 22 vote on the nomination of Barrett, a conservative appellate judge, over objections from Democrats that the confirmation process comes too close to the Nov. 3 presidential election.

Demonstrators at the Women’s March said they were angry that Republicans appear ready to confirm Barrett’s nomination so close to Election Day after refusing to move forward Merrick Garland, the pick of former President Barack Obama, a Democrat, more than six months ahead of the 2016 election.

“The fact of the matter is that we are powerful and they are afraid,” said Sonja Spoo, the director of the reproductive rights campaigns at UltraViolet, a feminist advocacy group, one of the speakers at the protest.

· Biden edges Trump in TV ratings for dueling town halls

Biden averaged 15.1 million viewers during Thursday night’s 90-minute discussion on Walt Disney Co’s ABC broadcast network. Trump pulled in 13.5 million for his 60-minute event across Comcast Corp’s broadcaster NBC and the company’s MSNBC and CNBC cable channels.

For the one-hour period that both Trump and Biden were on the air, Biden averaged 14.3 million to Trump’s 13.5 million.

· CORONAVIRUS UPDATES:

Global cases: 40.25M
Global deaths: 1.11M

U.S. cases: 8.38M
U.S. deaths: 224,728

· Global coronavirus cases rise by one-day record of 400,000

Global coronavirus cases rose by more than 400,000 for the first time late on Friday, a record one-day increase as much of Europe enacts new restrictions to curb the outbreak.

Europe, which successfully tamped down the first surge of infections, has emerged as the new coronavirus epicentre in recent weeks and is reporting on average 140,000 cases a day over the past week.

As a region, Europe is reporting more daily cases than India, Brazil and the United States combined.

· U.S. reports highest number of new coronavirus case since late July as total climbs above 8 million

The United States reported more than 69,000 new coronavirus cases on Friday, the highest daily count the nation has reported since late July.

The U.S. has now reported more than 8 million Covid-19 cases and at least 218,600 deaths since the beginning of the pandemic, according to data compiled by Johns Hopkins University.

The surge in coronavirus cases comes as infectious disease experts warn the U.S. could face a “substantial third wave” of infections that will be further complicated this winter by the spread of seasonal influenza, which causes many similar symptoms to that of the coronavirus.

· Europe crosses 150,000 daily coronavirus cases mark, a week after reporting 100,000 daily cases

· Anti-lockdowners protest as London COVID alert level is raised

· Thailand reports first local coronavirus cases in over a month

· Remdesivir has ‘little or no effect’ in reducing coronavirus deaths, WHO says

A study coordinated by the World Health Organization has indicated that remdesivir, along with three other potential drug treatments for the coronavirus, has “little or no effect” on death rates among hospitalized patients.

· Pfizer says earliest U.S. filing for COVID-19 vaccine would be late November

Pfizer Inc PFE.N said on Friday it could file in late November for U.S. authorization of the COVID-19 vaccine it is developing, suggesting that a vaccine could potentially be available in the United States by the end of the year.

· Frozen food package polluted by living coronavirus could cause infection, China's CDC says

· Pandemic wave risks delaying euro zone recovery: ECB's Panetta

The risk that the second wave of the coronavirus pandemic could derail the euro zone’s recovery from deep recession makes ultra-easy monetary policy all the more necessary, European Central Bank board member Fabio Panetta has told a Greek newspaper.

The ECB expects the bloc’s economy to return to its pre-crisis level by the end of 2022 - but Panetta said this projection was now at risk, a comment likely to reinforce expectations that the ECB will expand its stimulus efforts in December.

· Despite the pandemic, Europe’s fund industry has enjoyed net inflows in 2020

The European fund industry notched up net inflows of 297.1 billion euros ($347.6 billion) for the first nine months of 2020, according to a new report from Refinitiv Lipper, despite the coronavirus pandemic creating a “tough” environment for the industry.

· Bank of England’s Bailey sees economic risks skewed “very heavily” to downside

Bank of England Governor Andrew Bailey said risks to economic growth in Britain were skewed very heavily to the downside, and reiterated that he expected economic output at the end of September to have been 10%lower than a year earlier.

· Brexit brinkmanship: Johnson says prepare for no-deal, cancels trade talks

The door is still ajar for Britain and the European Union to strike a post-Brexit trade deal but the bloc needs to change its approach and show it is serious before talks can resume this week, senior British minister Michael Gove said.

British Prime Minister Boris Johnson hit back on Friday, telling Brussels there was no point in continuing the negotiations unless the EU fundamentally changed course, and telling businesses to prepare for no deal.

European leaders, however, have tasked negotiator Michel Barnier to continue talks.

· UK business groups urge Britain, EU to find compromise: FT

· Britain and EU to try to rescue post-Brexit trade talks on Monday

· China gives Shenzhen more autonomy for market reform, integration

China on Sunday detailed steps to grant more autonomy to Shenzhen, letting the southern financial and technology hub pilot reforms in market development and economic integration.

· China's third quarter GDP set to show broadening recovery as consumers resurface

China’s economic recovery stepped up in the third quarter, data released is expected to show on Monday, as consumers returned to malls and major trading partners reopened for business, shaking off the record slump seen earlier this year.

The world’s second-largest economy likely grew 5.2% in July-September from a year earlier, faster than the second quarter’s 3.2%, according to a Reuters poll.

China releases third-quarter GDP data on Monday at 0200 GMT, along with September factory output, retail sales and fixed-asset investment.

· U.S. threatens sanctions after U.N. arms embargo against Iran expires

Secretary of State Mike Pompeo warned Sunday that the United States will slap sanctions on any individual or entity that assists Iran’s weapons program, a move that will likely further aggravate tensions between Washington and Tehran.

Reference: CNBC, Reuters