Gold climbs 1.5% on U.S. stimulus bets, dipping dollar
· Gold prices rose over 1% to a one-month peak on Thursday as the dollar spiralled lower on hopes of more coronavirus relief aid and the U.S. Federal Reserve’s pledge to funnel more cash and keep interest rates pinned low.
· Spot gold jumped 1.5% to $1,892.31 per ounce, having hit a one-month high of $1,895.81 earlier in the session. U.S. gold futures were up 2.1% at $1,898.60.
· “A combination of an additional stimulus package along with additional bond buying and asset purchases from the Fed has clearly driven gold and silver prices higher,” said David Meger, director of metals trading at High Ridge Futures.
An additional stimulus relief package is weighing on the dollar due to more money being pumped into the supply, Meger added.
· Lawmakers sought to hammer out a $900 billion COVID-19 aid bill with a Friday deadline to avert a government shutdown looming, buoying gold prices and sending the dollar to a multi year trough. With interest rates anchored at zero, the Fed vowed to keep pumping cash into financial markets until the U.S. economy’s recovery is secure.
· Bullion, considered a hedge against inflation and currency debasement, has risen over 24% so far this year amid the unprecedented stimulus unleashed globally.
· Raising concerns over the U.S. economy’s recovery, the number of Americans filing first-time claims for jobless benefits unexpectedly rose last week as mounting COVID-19 infections battered business operations.
· “Fundamentally, gold is still quite strong and if it closes above $1,880 an ounce today we might see it going up to $1,950 before the year ends,” said Ravindra Rao, vice president, commodities at Kotak Securities.
· The Bank of England kept its stimulus programme unchanged as it awaited the outcome of Britain’s trade deal talks with the European Union.
· In other metals, silver rose 2.5% to $25.98 an ounce.
· Platinum gained 1.2% to $1,047.09 and palladium was up 0.8% at $2,344.72.
· CORONAVIRUS UPDATES:
Global Cases: 75.24M (+709,997)
Global Deaths: 1.66M (+12,519)
U.S. Cases: 17.61M (+222,969)
U.S. Deaths: 317,664 (+3,013)
U.K. Cases: 1.94M (+35,383)
U.K. Deaths: 66,052 (+532)
TH Cases: 4,281 (+20)
TH Deaths: 60
Myanmar Cases: 113,082 (+1,182)
Myanmar Deaths: 2,377 (+31)
· FDA panel endorses second Covid vaccine in U.S. as Moderna wins key vote in path to emergency use
An influential Food and Drug Administration advisory panel on Thursday overwhelmingly backed Moderna’s coronavirus vaccine, a key step paving the way to distribute the second Covid-19 vaccine in the United States next week.
The nonbinding decision, which was adopted 20 to 0 with one abstention, from the FDA’s Vaccines and Related Biological Products Advisory Committee came exactly a week after the outside group of vaccine and infectious disease experts voted to recommend Pfizer and BioNTech’s vaccine for an emergency use authorization, or EUA. The agency granted Pfizer’s EUA the next day and the first inoculations in the U.S. were given Monday.
· France’s Macron tests positive for Covid, prompting other top EU officials to isolate
· Spain's Sanchez tests negative for COVID-19, to quarantine after meeting France's Macron
Spanish Prime Minister Pedro Sanchez tested negative for COVID-19 on Thursday but will quarantine until Dec. 24 after being in contact with French President Emmanuel Macron, who has contracted coronavirus, his office said.
· Russia’s Putin says he hasn’t had Covid vaccine yet because he’s too old
· Weekly jobless claims unexpectedly rise, hit highest level since early September
Jobless claims unexpectedly rose last week as states reimposed coronavirus restrictions as lawmakers struggle to push through new government aid, according to a Labor Department report Thursday.
The number of first-time unemployment-benefits filers totaled 885,000 in the week ending Dec. 12, the most since the week of Sept. 5. Economists polled by Dow Jones expected initial claims to fall to 808,000.
In all, 20.6 million Americans were receiving some kind of unemployment benefits through Nov. 28, the report said.
These numbers “really highlight the fragility of the labor market, particularly now as the second resurgence of the coronavirus [is] leading to further business closures and additional job losses, ” Lindsey Piegza, chief economist at Stifel, told CNBC’s “Squawk Box.”
Congress, meanwhile, is scrambling to push through new legislation to aid individuals and businesses before year-end.
Congressional leaders on Wednesday closed in on a $900 billion package that would include direct payments to individuals. However, measure would exclude liability protections for businesses as well as aid to state and local governments.
· U.S. retail group expects over 150 million shoppers on Saturday before Christmas
· U.S. Republicans seek firm end to Fed's coronavirus loans, complicating aid talks
A new potential roadblock to a $900 billion coronavirus economic relief bill emerged in the U.S. Congress on Thursday as some Senate Republicans insisted on language ensuring that expiring Federal Reserve lending programs cannot be revived.
One Democratic aide criticized the move by Senator Pat Toomey, a Pennsylvania Republican, saying it would limit President-elect Joe Biden’s ability to respond to the heavy economic toll of the pandemic, which in addition to killing more than 300,000 Americans has thrown millions out of work.
· Swiss central bank chief rejects ‘currency manipulator’ label from the U.S.
Swiss National Bank President Thomas Jordan has rejected a U.S. decision to label Switzerland a “currency manipulator.”
The U.S. Treasury on Wednesday added Switzerland to a list of nations it suspects of deliberately devaluing their currencies against the U.S. dollar.
Jordan told CNBC Thursday that neither the SNB nor Switzerland itself have artificially manipulated the value of the Swiss franc.
“Our monetary policy is necessary, it is legitimate, and we have a very low inflation rate — it is even negative at this moment — so we have to fight this deflation, and the Swiss franc is very strong, so it appreciated in nominal terms over the last 12 years enormously, both vis-a-vis the euro and vis-a-vis the U.S. dollar,” he said.
The Swiss National Bank has long maintained that it is willing to intervene more robustly in foreign exchange markets, and has staunchly denied manipulating the Swiss franc. The U.S. Treasury said Switzerland’s interventions totaled 14% of GDP (gross domestic product).
· Britain, EU strike pessimistic tone in post-Brexit trade talks
Britain and the European Union struck a pessimistic tone in trade talks on Thursday, with Prime Minister Boris Johnson saying it was “very likely” there would be no agreement unless the bloc changed its position “substantially”.
Just over two weeks before Britain finally leaves the bloc’s orbit, European Commission President Ursula von der Leyen was also downbeat, saying it would be “very challenging” to overcome the “big differences” that remained.
· Bank of England holds rates steady as coronavirus outlook remains uncertain
The U.K.’s central bank on Thursday kept its monetary policy stance unchanged as much of the country enters the festive period under the highest tier of coronavirus restrictions.
The Bank of England kept its main lending rate at 0.1%, having cut twice from 0.75% since the onset of the pandemic in March, and retained its target stock of asset purchases at £895 billion ($1.2 trillion).
At its last meeting in November, the Monetary Policy Committee (MPC) voted to expand its bond buying as England entered a month-long national lockdown amid a resurgence in Covid-19 cases.
In Thursday’s report, the MPC noted that the successful trialing and initial rollout of vaccines was likely to reduce the downside risk to the economic outlook identified in November.
“Nevertheless, recent global activity has been affected by the increase in Covid cases and associated re-imposition of restrictions,” the report said.
“U.K.-weighted global GDP growth in 2020 Q4 is likely to be a little weaker than expected at the time of the November Report.”
· BOJ set to hold fire, extend fund programmes to ease pandemic strain
The Bank of Japan is expected to extend on Friday a package of steps aimed at easing corporate funding strains caused by the coronavirus, as a renewed spike in infections cloud prospects of recovery from the health-crisis-induced economic slump.
· IMF steering committee names Swedish finance minister as next chair
The International Monetary Fund said on Thursday said its steering committee has chosen Swedish Finance Minister Magdalena Andersson as the panel’s chair, returning a European to the role for the first time in more than 12 years.
Andersson will be the first woman to chair the International Monetary and Financial Committee and will serve a three-year term effective Jan. 18, 2021, the IMF said. She succeeds Lesetja Kganyago, governor of the South African Reserve Bank.
· Biden to pick North Carolina environmental regulator to run EPA
President-elect Joe Biden will pick Michael Regan, secretary of the North Carolina Department of Environmental Quality, to lead the Environmental Protection Agency, a person familiar with the matter told CNBC.
Regan, 44, has been Biden’s front-runner for the position and if confirmed will be the first Black man to lead the agency.
· Biden picks U.S. Representative Deb Haaland to be Interior Secretary -source
President-Elect Joe Biden will nominate Representative Deb Haaland to serve as his Interior Secretary, according to a person familiar with the matter, a pick that would make her the first Native American Cabinet secretary.
· Joe Biden warns he will be tough on state sponsors of cyberattacks, as U.S. suffers massive hack
Reference: CNBC, Reuters, Worldometers
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