· Gold rises on stimulus bets, subdued dollar
Gold firmed near an over one-week high on Wednesday as prospects of a U.S. coronavirus relief package reinforced its appeal as a hedge against likely inflation and sent the dollar to a multi-year trough.
Top U.S. economic officials on Tuesday urged Congress to provide more help for small businesses to cope with the pandemic, while support was growing for a $1.4 trillion spending bill.
Spot gold rose 0.7% to $1,827.63 per ounce. Prices peaked at $1,832.20, the highest since Nov. 24, earlier in the session. U.S. gold futures settled up 0.6% at $1,830.20.
“We’re one step closer to the next stimulus package; that has weakened the dollar, eroding the currency and supporting commodity prices across the board, including gold and silver,” said David Meger, director of metals trading at High Ridge Futures.
U.S. economic growth is moderating as the coronavirus spreads and fiscal help fades, Philadelphia Federal Reserve Bank President Patrick Harker said on Wednesday.
Raising gold’s appeal for other currency holders, the dollar held near a 2-1/2 year low. Non-yielding bullion, which has risen over 20% so far this year, tends to benefit from widespread stimulus measures because it is widely viewed as a hedge against inflation and currency debasement that could result from the stimulus.
The stimulus would drive “some physical demand, encourage notions of problematic price inflation in the coming months,” said Kitco Metals senior analyst Jim Wyckoff.
Gold, however, registered its worst monthly performance in four years in November, weighed down by optimism over a vaccine-fuelled economic rebound.
Britain on Wednesday became the first country to approve Pfizer-BioNTech’s COVID-19 vaccine.
Elsewhere, silver fell 0.2% to $23.96 per ounce. Platinum rose 1% to $1,009.90 and palladium eased 0.4% to $2,397.63.
· On the data front, ADP said companies hired 307,000 workers in November, well below the 475,000 expected by economists surveyed by Dow Jones. The number was the lowest private payrolls reading since July amid a deceleration in large business hiring.
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· Biden promises help to U.S. workers hit by pandemic, Trump hints at 2024 run
· Pelosi and Schumer back $900 billion coronavirus stimulus plan as basis for negotiations
Wednesday urged Senate Majority Leader Mitch McConnell to use a $908 billion bipartisan coronavirus stimulus plan as the basis for relief talks as Congress scrambles to send aid to Americans before the end of the year.
In a joint statement, the Democratic leaders endorsed a more narrow aid approach than they have previously. The California and New York Democrats had insisted on legislation that costs at least $2.2 trillion.
“While we made a new offer to Leader McConnell and Leader McCarthy on Monday, in the spirit of compromise we believe the bipartisan framework introduced by Senators yesterday should be used as the basis for immediate bipartisan, bicameral negotiations,” Schumer and Pelosi said.
Democratic House Majority Leader Steny Hoyer, D-Md., was set to speak to McConnell on Wednesday about a pandemic relief measure. Earlier, the No. 2 House Democrat told reporters he hopes the parties can strike a deal by the end of the weekend and pass it by next week.
That would require a quick compromise amid lingering disputes over key issues. McConnell signaled Tuesday that he wants to tie aid to a government funding bill Congress needs to pass by Dec. 11.
In a possible sign that Democrats could agree to link coronavirus provisions to a spending measure, Hoyer said Wednesday that he wants to finish legislative business in the House by the same date.
As pandemic relief talks continue, the fate of stimulus checks and unemployment benefits remain uncertain
Talks of a new coronavirus stimulus bill are happening on Capitol Hill.
As lawmakers renew their efforts to come to a compromise — including two new bipartisan and GOP packages — some question whether it will be enough to get more financial relief to Americans before some key protections expire at the end of this month.
One group of bipartisan lawmakers on Tuesday introduced a $908 billion package that would include an extra $300 per week in federal unemployment benefits. Senate Majority Leader Mitch McConnell, R-Ky., rejected the proposal later that day, and instead put forth a different plan.
Washington’s political leaders currently face a Dec. 11 deadline to authorize more funding to keep the government running.
Meanwhile, other unemployment provisions are set to expire this month, which could leave 12 million Americans without jobless benefits. Protections for renters and student loan borrowers are also set to run out.
· Kaplan says he’s not in favor of Fed increasing bond purchases
Dallas Federal Reserve President Robert Kaplan said he wouldn’t be in favor of changing the central bank’s bond-purchasing program even though he sees some rocky times ahead for the U.S. economy.
· Fed sees little to no growth in much of U.S. as stress mounts
Federal Reserve officials saw “little or no growth” in four of their 12 regional districts and only modest growth in the others in recent weeks as a rapidly spreading health crisis and ongoing recession continued to devastate some U.S. businesses and families even as many others thrive.
· COVID-19 UPDATES:
Global Cases: 64.80M (+613,013)
Global Deaths: 1.49M (+12,189)
U.S. Cases: 14.29M (+188,853)
U.S. Deaths: 279,763 (+2,727)
India Cases: 9.53M (+33,761)
Brazil Cases: 6.43M (+48,124)
Thailand Cases: 4,026 (+18)
Thailand Deaths: 60
Myanmar Cases: 93,600 (+1,411)
Myanmar Deaths: 1,998 (+26)
· CDC director warns the next few months could be ‘the most difficult in the public health history of this nation’
The next few months of the Covid-19 pandemic will be among “the most difficult in the public health history of this nation,” Dr. Robert Redfield, the director of the Centers for Disease Control and Prevention, said Wednesday.
Redfield, speaking at an event hosted by the U.S. Chamber of Commerce, said that about 90% of hospitals in the country are in “hot zones and the red zones.” He added that 90% of long-term care facilities are in areas with high level of spread.
“So we are at a very critical time right now about being able to maintain the resilience of our health-care system,” Redfield said. “The reality is December and January and February are going to be rough times. I actually believe they’re going to be the most difficult in the public health history of this nation, largely because of the stress that’s going to be put on our health-care system.
Redfield added that deaths caused by Covid-19 are already rising. He said the country is now in the range of reporting between 1,500 and 2,500 deaths everyday.
· Obama will take coronavirus vaccine and might film it to build confidence – ‘I trust this science’
Former President Barack Obama said Wednesday that he will take a coronavirus vaccine once one is available and may film it to build confidence in the U.S. about vaccine safety.
Obama’s comment came as numerous polls find many Americans are skeptical about getting a Covid-19 vaccine, potentially jeopardizing U.S. vaccination efforts to control the pandemic, which has now taken at least 1.48 million lives worldwide. People of color, who have been disproportionately impacted by the virus, in particular, appear to be less eager to take it, according to a recent Gallup poll.
Medical experts say escalated fears due to the pandemic and concerns that President Donald Trump is pressing regulators to approve a vaccine before it is ready are to blame for the skepticism.
· Trump Covid vaccine czar says U.S. should be able to immunize nearly a third of population by end of February
The U.S. should be able to distribute enough coronavirus vaccine doses to immunize 100 million people by the end of February, President Donald Trump’s Covid-19 vaccine czar said Wednesday.
· UK becomes the first to approve Pfizer-BioNTech Covid vaccine, rollout due next week
The U.K. on Wednesday became the first country to authorize the Pfizer-BioNTech vaccine for emergency use, marking another step in the global battle against the pandemic.
The vaccine will now be rolled out in the country next week, with elderly people in care homes and medical workers first in line. The U.K. government is the first in the world to formally approve the U.S.-German vaccine for widespread use, and it means Britain will be one of the first countries to begin vaccinating its population. Emergency use approval in the United States is under review by the Food and Drug Administration.
· Trump expected to sign bill that could delist Chinese companies, White House says
U.S President Donald Trump is expected to sign a bill that could prevent some Chinese companies from listing their shares on U.S. exchanges unless they adhere to U.S. auditing standards, the White House said on Wednesday.
The bill, which passed the Senate earlier this year and was approved by the House of Representatives on Wednesday, could hit companies such as Alibaba, tech firm Pinduoduo Inc and oil giant PetroChina Co Ltd..
If signed into law, the measure would give Chinese companies listed on U.S. exchanges three years to comply with U.S. auditing rules before being removed from U.S. markets.
· U.S. bans cotton imports from China producer XPCC citing Xinjiang 'slave labor'
The Trump administration expanded economic pressure on China’s Xinjiang province on Wednesday, banning cotton imports from a powerful Chinese quasi-military organization that it says uses the forced labor of detained Uighur Muslims.
· Chinese researchers quit U.S.; agents target Biden team: U.S. officials
More than 1,000 Chinese researchers have left the United States amid a U.S. crackdown on alleged technology theft, top U.S. security officials said on Wednesday, adding that Chinese agents had already been targeting the incoming Biden administration.
· EU proposes a plan to revive U.S. ties and work with Biden
· Euro zone economy to gain momentum in 2021 on vaccine hopes: Reuters poll
The euro zone economy will contract again this quarter as renewed lockdown measures stifle activity, according to a Reuters poll which showed the bloc’s GDP would then return to pre-crisis levels within two years.
Hopes for a coronavirus vaccine and additional support from the European Central Bank this month meant quarterly growth forecasts for next year were upgraded in the poll conducted from Nov. 26-Dec. 2.
“We now assume vaccines will be rolled out in the euro zone next year and most restrictions on economic activity are lifted during Q2. As a result, GDP increases by around 5% next year, regaining its pre-COVID level in early 2022,” said Andrew Kenningham, chief Europe economist at Capital Economics.
“There are still big risks to this forecast. There could yet be a third wave of the virus, vaccine distribution could run into political or logistical problems, and governments could be slower to ease restrictions. On the other hand, the vaccines could be more effective or easier to roll out than anticipated”.
Nearly 80% of respondents, or 36 of 45, who replied to an extra question said the economy would return to pre-crisis levels within two years.
That was a major turnaround in expectations from August when more than 70% of economists said it would take two or more years to reach that level.
The wider poll showed after contracting 2.6% this quarter, the economy would grow 1.1% in the first quarter of 2021 compared with 0.8% in the last poll. It was then predicted to expand 2.0% and 1.8% in Q2 and Q3, better than median predictions of 1.8%, 1.2% in November.
· Japan's service sector struggles to recover amid COVID-19 resurgence: PMI
Activity in Japan’s services sector continued to falter in November, a private sector survey showed, as a resurgence in coronavirus infections weighed on new business and employment conditions.
The world’s third-largest economy has been gradually recovering from a virus-induced slump earlier this year, but it is expected to take years before it will return to pre-pandemic levels, especially within the service sector, which contributes nearly 70% of its gross domestic product.
The final Jibun Bank Japan Services Purchasing Managers’ Index (PMI) was little changed from October’s reading, edging up to a seasonally adjusted 47.8 from 47.7.
Though the final result was better than a preliminary 46.7 reading, the headline index remained firmly in contraction territory below the 50 neutral level.
Surveyed firms said a third wave of COVID-19 infections had depressed demand and led to more challenging business conditions.
Reference: CNBC, Reuters, Wordometers
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