Gold slips to 1-month low as dollar gains upper hand
· Gold prices fell to a one-month low on Thursday, extending the previous session’s sharp slide as the dollar remained the preferred refuge from risks due to mounting COVID-19 cases ahead of the U.S. Presidential election.
· Spot gold was 0.4% lower at $1,869.22 per ounce, having fallen 2% on Wednesday. U.S. gold futures slipped 0.6% to settle at $1,868.
· “You currently see a move out of the risky assets into safe havens, but the safe haven has been the U.S. dollar,” said Quantitative Commodity Research analyst Peter Fertig.
The dollar index rose to more than a one-week peak, benefiting from safe-haven inflows as Germany and France imposed fresh lockdowns to stem a second coronavirus wave.
· Ahead of the Nov. 3 election, Democratic challenger Joe Biden leads U.S. President Donald Trump nationally, but the competition is tighter in swing states.
· “The precious metals have not seen much safe-haven demand amid a U.S. stock market that has become wobbly this week,” Kitco Metals senior analyst Jim Wyckoff said in a note.
· Gold pared losses slightly after the release of U.S. GDP and jobless claims data. Jobless claims fell to 751,000 in the Oct. 24 week versus a 775,000 consensus forecast and compared with 791,000 in the prior week.
But gold, considered an inflation-hedge, was still up 22% this year, helped by near-zero interest rates globally and unprecedented stimulus measures.
Meanwhile, the European Central Bank left policy unchanged, resisting pressure to unveil more stimulus amid a new wave of the pandemic, but provided the clearest hint yet of fresh easing at its next meeting in December.
· On the physical front, the World Gold Council expected gold demand to improve into year-end in top buyers China and India.
· Silver dipped 0.6% to $23.24 per ounce after earlier slipping to a near one-month low, platinum fell 2.7% to $844.02 and palladium was down 1.8% at $2,193.18.
· Better-than-expected GDP, jobless claims data
- U.S. GDP booms at 33.1% rate in Q3, better than expected
Coming off the worst quarter in history, the U.S. economy grew at its fastest pace ever in the third quarter as a nation battered by an unprecedented pandemic started to put itself back together, the Commerce Department reported Thursday.
Third-quarter gross domestic product, a measure of the total goods and services produced in the July-to-September period, expanded at a 33.1% annualized pace, according to the department’s initial estimate for the period.
- The number of first-time unemployment-benefitsfilers declined for a second straight week and hit its lowest level sinceMarch. Initial weekly U.S. jobless claims came in at 751,000 for the week ending Oct.24, betterthan a Dow Jones estimate of 778,000.
· ECB hints at more stimulus in December as new coronavirus lockdowns are imposed
The European Central Bank hinted at more monetary stimulus on Thursday, as the two largest economies in the region prepare for a second national lockdown.
The bank decided to keep its rates and wider monetary policy unchanged, but suggested that additional policy action in the euro zone could come as soon as December.
Thursday’s decision means the interest rate on the ECB’s main refinancing operations, marginal lending facility and deposit facility remain at 0%, 0.25% and -0.5%, respectively. In addition, its Pandemic Emergency Purchase Program (PEPP), created in the wake of the coronavirus outbreak, was left unchanged.
· Europe gears up for more economic pain as Germany and France impose national lockdowns
The latest measures to address the second wave of Covid-19 infections in Europe could lead to higher unemployment, the permanent closure of many businesses and even more national debt.
“Scarring will occur with each iteration,” analysts at High Frequency Economics said in note on Wednesday about the new lockdowns.
“Businesses and households will fail, increasing the number of jobs that will never come back at any interest rate and with any level of fiscal stimulus.”
· Spain enters six-month state of emergency to tackle pandemic
· CORONAVIRUS UPDATES:
· U.S. Postal Service has delivered 122 million ballots ahead of election
The U.S. Postal Service said on Thursday that it had delivered 122 million blank and completed ballots ahead of next Tuesday’s presidential election in which there has been record early voting.
· Four in ten supporters of Biden, Trump would not accept election defeat: Reuters/Ipsos poll
More than four in ten supporters of both President Donald Trump and his Democratic challenger, Joe Biden, said they would not accept the result of the November election if their preferred candidate loses, Reuters/Ipsos poll found.
The survey, conducted from Oct. 13-20, shows 43% of Biden supporters would not accept a Trump victory, while 41% of Americans who want to re-elect Trump would not accept a win by Biden.
· BBC - Will Trump and Biden accept the result?
There is a chance the early leader on election night may not win - a prospect made more likely by postal voting.
Mr Biden has said he will accept the full result but has insisted: "Count every vote."
Hillary Clinton, who stood against President Trump in 2016, has said Mr Biden should not concede on election night "under any circumstances because I think this is going to drag out".
President Trump says November's election could be subject to "tremendous fraud" because of postal ballots - despite there being little evidence of this.
He has refused to commit to a peaceful transfer of power if he loses.
What happens if the election result is not accepted?
President Trump said he believes the election result could end up in the US Supreme Court.
This has happened before. In the 2000 election, Democrat Al Gore claimed his narrow margin of defeat in Florida should lead to a recount.
It took 36 days and the Supreme Court to decide against a recount to settle the contest in favour of Republican George W Bush.
Various legal challenges could emerge this year - including everything from the identification requirements for postal voting, to the legality of Covid-related changes to voting.
Reference: Reuters, CNBC, Worldometers, BBC
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