Gold slips as dollar firms, while investors await stimulus
Gold prices slipped on Friday after three days of gains as the dollar’s rebound offset support from hopes of a U.S. fiscal stimulus package.
Spot gold was down 0.1% at $1,883.39 per ounce.
On Friday, February Comex gold futures settled at $1888.90, down $1.50 or -0.08%.
The precious metal was still up about 2.5% for the week and on track for a third straight weekly gain.
· Price of Gold Fundamental Daily Forecast – Fiscal Stimulus Good News, but Gains Could Be Limited by Vaccine Rollout
Gold futures dipped on Friday after jumping to a one-month high earlier in the week as the dollar’s small recovery reduced demand for dollar-denominated assets. Weaker investment sentiment weighed on the global equity markets, encouraging investors to move money into the safe-haven dollar and book profits in gold. Year-end position-squaring may have also persuaded investors into exiting gold.
However, the biggest influence on gold prices was the lack of progress toward a new U.S. COVID-19 relief package. Gold rode the tails of a potential stimulus deal all week, and it can fall early next week if a deal isn’t reach in a timely manner.
The pattern has been pretty simple this month. Gold prices have risen on positive headlines on stimulus, and gold has pulled back when the headlines signaled a setback. The stimulus news has clearly set the short-term tone.
The long-term tone is also clear since its bullish trend is being controlled by the Federal Reserve through monetary policy. Last week, speculators drove gold to its highest level since November 16 after the U.S. Federal Reserve pledged to continue pouring cash into financial markets and keep interest rates low until the U.S. economic recovery is secure.
It may come as a surprise to the “gold is a safe-haven asset” investor, but the investment has showed no response to the surge in global coronavirus cases and deaths. Investors could be ignoring gold because they believe in the vaccines or perhaps the safe-haven money that is flowing out of the U.S. Dollar may be moving into equities and bitcoin.
· FXStreet Technical analysis
Although a clear upside break of 50-day SMA, at $1,870 now, keeps gold buyers hopeful, the mid-November peak surrounding the $1,900 threshold and 100-day SMA near $1,903 guards immediate upside of the yellow metal. Meanwhile, an ascending trend line from November 30, at $1,852, adds to the downside support.
· Republican, Democrats reach compromise over Covid-19 stimulus package
Congress reached a deal Sunday on a $900 billion coronavirus relief package, a long-delayed effort to boost an American health-care system and economy buckling under the weight of the pandemic.
Congressional leaders announced the agreement on a coronavirus aid and full-year government spending bill after days of start-and-stop efforts to finish a deal. They have not yet released text of the more than $2 trillion legislation, which they hope to pass in the next day.
To avoid a government shutdown that would start at 12:01 a.m. ET Monday, Congress aims to approve a one-day spending measure on Sunday. It would keep the lights on until 12:01 a.m. ET on Tuesday. Lawmakers then plan to vote on the relief and funding bill on Monday.
The deal on one of the largest rescue bills in U.S. history follows months of sniping on Capitol Hill over how best to fight a once-in-a-century crisis. Democrats moved quickly to pass trillions of dollars more in assistance only two months after Congress passed the more than $2 trillion CARES Act in March. The GOP at first downplayed the need for more aid, then in the summer embraced a more limited approach than Democrats desired.
A new round of help cannot come soon enough for the millions of Americans who have tried to scrape together enough money to afford food and housing during sustained public health restrictions.
“The American people have a great deal to celebrate in this legislation. But of course, the agreement we reached is far from perfect,” Schumer said on Sunday.
· House passes one-day funding measure. Senate next to vote
The House of Representatives has passed a funding measure that will keep the government open through Monday, giving Congress more time to vote on the Covid stimulus deal.
The bill now goes to the Senate for a final vote.
· CORONAVIRUS UPDATES:
Global Cases: 77.15M (+540,042)
Global Deaths: 1.69M (+7,912)
U.S. Cases: 18.26M (+176,694)
U.S. Deaths: 324,849 (+1,394)
U.K. Cases: 2.04M (+35,928)
U.K. Deaths: 67,401 (+326)
TH Cases: 4,907 (+576)
TH Deaths: 60
Myanmar Cases: 116,134 (+947)
Myanmar Deaths: 2,443 (+19)
· The U.K. has identified a new Covid-19 strain that spreads more quickly.
England’s top medical officer on Saturday announced that the U.K. has identified a new variant of the coronavirus that “can spread more quickly” than prior strains of the virus.
So far, a collection of evidence suggests the new strain “has a significant, substantial increase in transmissibility,” Professor Chris Whitty, England’s chief medical officer, said.
There’s “no evidence” so far to suggest it causes more severe disease, more hospitalizations or affects coronavirus treatments and vaccines, he said.
· U.K. orders stricter Covid lockdown in London — ‘We cannot proceed with Christmas as planned’
British Prime Minister Boris Johnson says Christmas gatherings can’t go ahead and non-essential shops must close in London and much of southern England, as he imposed a new, higher level of coronavirus restrictions on the region to curb rapidly spreading infections.
Johnson said Saturday that the capital and other areas in southern England currently under Tier 3, the highest level of coronavirus restrictions, will move to an even stricter new Tier 4 that requires non-essential shops, hairdressers and indoor leisure venues to close after the end of business hours Saturday.
Johnson also said that a planned five-day easing of socializing rules that would allow up to three households to meet in “Christmas bubbles” will be canceled for Tier 4 areas. No mixing of households will be allowed except for under very limited conditions outside in public places.
He said that in the rest of England, people will be allowed to meet in Christmas bubbles for just one day instead of from Dec. 23 to Dec. 27, as originally planned.
· Italy has patient with new strain of virus found in Britain
· Belgium, Austria, Italy, Netherlands halt UK flights, fearing new coronavirus variant
· China to vaccinate high-risk groups over winter and spring, health official says
China has included two candidate vaccines from Sinopharm and one from Sinovac Biotech in an emergency-use program launched in July, targeting specific high-infection risk groups such as medical workers and border inspectors.
It has also approved a vaccine from CanSino Biologics for military use but has not approved any vaccine for use among the general public.
· Britain insists EU should move in Brexit trade talks as health minister slams ‘unreasonable demands’
Britain insisted on Sunday that the European Union should shift position to open the way for a breakthrough in post-Brexit trade talks, with health minister Matt Hancock saying on Sunday the bloc should drop its “unreasonable demands”.
With less than two weeks before Britain leaves the EU’s orbit, both sides are calling on the other to move to secure a deal and safeguard almost a trillion dollars worth of trade from tariffs and quotas.
· Britain, EU tell each other to give way in 'difficult' trade talks
Britain insisted on Sunday that the European Union should shift position to open the way to a post-Brexit trade pact, drawing a swift response from the bloc’s negotiator defending the union’s right to protect its interests.
· U.S. blacklists dozens of Chinese firms including SMIC, DJI
The United States added dozens of Chinese companies, including the country’s top chipmaker SMIC and Chinese drone manufacturer SZ DJI Technology Co, to a trade blacklist on Friday as U.S. President Donald Trump’s administration ramps up pressure on China in his final weeks in office.
Reuters first reported the addition of SMIC and dozens of additional companies early Friday. The move is seen as the latest in Republican Trump’s efforts to cement his tough-on-China legacy as part of lengthy fight between Washington and Beijing over trade and numerous economic issues.
The U.S. Commerce Department said the action against SMIC “stems from China’s military-civil fusion (MCF) doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex.”
The department also said it was adding the world’s biggest drone company DJI to the list along with AGCU Scientech; China National Scientific Instruments and Materials, and Kuang-Chi Group for allegedly enabling “wide-scale human rights abuses within China through abusive genetic collection and analysis or high-technology surveillance.”
The firms did not immediately comment.
Commerce Secretary Wilbur Ross said in a statement the department would “not allow advanced U.S. technology to help build the military of an increasingly belligerent adversary.”
· China’s Xi Jinping seeks advantage over Biden with ground-breaking EU investment deal
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