Gold jumps 1% as U.S. relief deal bets grow, dollar retreats
· Gold rose 1% to its highest in over a week on Wednesday as investor optimism that a U.S. coronavirus aid package will be announced before the Nov. 3 presidential elections pressured the dollar and bolstered bullion’s appeal as an inflation hedge.
· Spot gold jumped 1.1% to $1,926.46 per ounce, after touching its highest since Oct. 12. U.S. gold futures rose 0.8% to $1,931.
· Gold, considered a hedge against inflation, currency debasement and uncertainty, has gained more than 26% this year, driven mainly by unprecedented levels of global stimulus to cushion economies from the coronavirus-induced slump.
· “Nancy Pelosi had a Tuesday deadline. Well, now it’s been pushed down to Friday. Knowing that, people think a deal might get done in the near future, so they’re starting to accumulate gold,” said Michael Matousek, head trader at U.S. Global Investors.
The increased bets for an eventual breakthrough pushed the dollar to its lowest in nearly two months, making gold less expensive for holders of other currencies.
“What’s going to create that demand to propel gold higher? It’s going to be the continued stimulus, continued negative interest rates, people worried about the COVID infection spiking because gold is thought of as a safe haven,” added U.S. Global Investors’ Matousek.
· Looking ahead, a Reuters poll predicted that while gold may average less than $2,000 an ounce next year as a record rally slows, prices could still touch new highs.
· Elsewhere, silver rose 2% to $25.14 per ounce, platinum gained 2% to $888.41 and palladium inched up by 0.2% to $2,402.58.
Platinum and palladium could gain on a tentative recovery in the auto sector, the survey showed.
· Senate Democrats block GOP’s $500 billion coronavirus aid bill as Pelosi-Mnuchin talks continue
Senate Democrats blocked Republicans’ attempt to pass a $500 billion coronavirus stimulus bill Wednesday as House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin make a last-ditch push to strike a relief deal before the 2020 election.
The GOP tried to advance its bill, similar to one Democrats opposed last month. The measure failed in a 51-44 party-line vote, falling short of the 60 votes needed.
· Democrats seize on U.S. Supreme Court election deadlock in Barrett fight
· Fed's Bullard says U.S. can wait on fiscal aid, businesses adapting
St. Louis Federal Reserve Bank President James Bullard on Wednesday repeated his view that U.S. businesses are largely adapting to life amid COVID-19 and the U.S. economy is on track to better-than-trend growth even without further fiscal stimulus.
“In terms of the aggregate resources it seems like we should have enough” fiscal aid to bolster growth until the first quarter of next year, when any further need could be reassessed, Bullard said at the Federal Home Loan Bank of Des Moines Leadership Summit.
· U.S. economy’s rebound sets up test of Fed’s new pledge
The stronger-than-expected U.S. economic rebound from coronavirus lows could set up an early test for the Federal Reserve’s new pledge to keep interest rates near zero and its increased tolerance for inflation.
Indeed the U.S. economy probably grew by more than 30% on an annualized basis last quarter, economists say, making up most of the 31.4% drop in the second quarter.
· CORONAVIRUS CRISIS:
Total confirmed cases: More than 41,462,036
Total deaths: At least 1,135,697
· CDC says the U.S. is now seeing a ‘distressing trend’ in coronavirus outbreak
The U.S. is now reporting roughly 60,000 new Covid-19 cases daily, growing nearly 17% compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University. Figures are based on a weekly average to smooth out fluctuations in daily reporting. Only two states — Hawaii and Virginia — reported declines greater than 5% as of Tuesday.
The U.S. still has the worst outbreak in the world, with more than 8.58 million cases and at least 227,409 deaths, according to Hopkins data.
· Mortgage demand from homebuyers falls for the fourth straight week
Homebuyer demand is incredibly strong compared with last year, but there appears to be a slight pullback this month.
A drop in buyer demand caused total mortgage application volume to fall 0.6% last week compared with the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index.
Applications to purchase a home fell 2% for the week, the fourth straight week of declines. Purchase demand is down nearly 7% compared with four weeks ago. Volume, however, is still 26% higher than one year ago.
· Trump’s reported Chinese bank account raises security concerns: Pelosi
· U.S. intelligence agencies say Iran and Russia have tried to interfere in 2020 election
· U.S. State Department approves $1.8 bln in potential arms sales to Taiwan: Pentagon
References: Reuters, CNBC, Worldometers
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