Gold gains on subdued dollar after Brexit trade deal
· Gold prices edged higher in holiday-thinned trade on Thursday, helped by a U.S. dollar that stayed lower after Britain clinched a trade deal with the European Union, although gains were capped by an uptick in risk appetite.
· Spot gold rose 0.3% to $1,877.41 per ounce. U.S. gold futures closed up $5.1 at $1,883.2.
· “Supportive factors for the gold market include the weaker U.S. dollar index for the past couple of days after gains earlier this week,” said Kitco Metals senior analyst Jim Wyckoff. “Limiting the upside is global stock markets that are still in rally mode and that’s just siphoning funds away from the safe-haven precious metal.”
· Risk sentiment was upbeat, while the U.S. dollar was weighed down by investors opting for sterling as Britain clinched a Brexit trade deal with the European Union. Investors largely brushed off U.S. President Donald Trump’s threat to not sign a nearly $900 billion stimulus bill.
· “Investors are pretty optimistic about fiscal and monetary supports from governments around the globe, even though a vaccine reduces the might of the virus,” UBS analyst Giovanni Staunovo said.
· Worries over the spread of a more transmissible coronavirus variant have led to a tightening of restrictions in Britain, underlining concerns over a post-pandemic economic recovery.
· Meanwhile, data on Wednesday showed the number of Americans filing first-time claims for unemployment benefits remained elevated but posted a fall last week.
· Considered a hedge against inflation and currency debasement, gold has gained more than 23% this year, helped by massive amounts of stimulus to support pandemic-hit economies.
· Silver was up 0.9% at $25.77. Platinum gained 0.7% to $1,021.19 and palladium rose 0.2% to $2,328.64.
· Trading is expected to be subdued ahead of the Christmas holidays.
· UK and EU strike historic post-Brexit trade deal
The United Kingdom and European Union have agreed on a trade deal ahead of the Dec. 31 deadline.
The two sides had been embroiled in intense talks since March to establish how commerce will work from January onward.
The trade agreement still has to be ratified by the U.K. and EU parliaments in the coming days.
· EU trade deal brings little progress for UK's giant financial sector
The European Union cannot decide yet on granting Britain access to the bloc’s financial market, even though London and Brussels have agreed a trade deal, a European Commission official said on Thursday.
While the landmark trade deal agreed on Thursday set rules for industries such as fishing and agriculture, it did not cover Britain’s much larger and influential finance sector.
There were hopes the trade deal would pave the way for more access to the EU for Britain’s finance industry, but the EU indicated it was in no rush to grant it.
· UK fishing industry disappointed by Brexit deal "fudge"
Britain’s fishing industry is disappointed that a Brexit trade deal struck with the European Union does not represent more of a reduction in the access that the bloc currently has to British waters, an industry representative said.
“The industry will be bitterly disappointed that there is not more of definitive break,” Barrie Deas, chief executive of The National Federation of Fishermen’s Organisations, told Reuters. “It’s a bit of a fudge.”
· Sterling near 2-½ year highs as UK and EU clinch Brexit breakthrough
The British pound traded near 2-½ year highs on Thursday as investors reacted to the U.K. and the European Union striking a long-awaited Brexit trade deal.
Sterling trimmed some gains after the news was announced, but was still up 0.5% for the session at around $1.3557. Earlier this month, the currency breached a 2020 high of $1.3624, a level it hasn’t hit since May 2018.
· Dollar slips, sterling gains after UK, EU strike Brexit trade deal
The U.S. dollar was mostly lower on Thursday, while sterling gained after Britain and the European Union struck a post-Brexit trade deal, boosting the market’s appetite for risk and raising hopes the United Kingdom can avoid a turbulent economic departure at the end of the year.
In mid-morning trading, the dollar index was slightly lower at 90.256. So far this year, the dollar has fallen 6.5%, its worst yearly performance since 2017. Currency markets also seemed to have shrugged off President Donald Trump’s criticism of the fiscal relief package earlier approved in Congress, which could put the bill in limbo.
Republicans and Democrats in the U.S. House of Representatives on Thursday blocked attempts to alter a $2.3 trillion coronavirus aid and government spending package, leaving its status in doubt after Trump demanded extensive changes to the legislation.
· GOP blocks House Democrats’ attempt to pass $2,000 stimulus checks
House Republicans on Thursday blocked a Democratic attempt to pass $2,000 direct payments to Americans, as the fate of the massive coronavirus relief package passed by Congress earlier in the week hangs in the balance.
The Democrats moved to increase the size of the checks after President Donald Trump threatened to oppose the $2 trillion pandemic aid and federal funding bill because it included only $600 in direct payments rather than $2,000.
Congress passed the proposal Monday after Trump took no role in weeks of talks. The plan included $900 billion in coronavirus relief.
Trying to cap the plan’s cost, most of Trump’s Republican Party sought $600 in direct payments rather than the $1,200 passed in the CARES Act in March. In criticizing the year-end legislation, Trump also pointed to foreign aid spending — which Washington includes in funding bills every year.
The House tried to pass the $2,000 payments during a pro forma session on Christmas Eve day, a brief meeting of the chamber where typically only a few members attend. Democrats aimed to approve the measure by unanimous consent, which means any one lawmaker can block it.
· U.S. dollar share of global reserves slide in Q3 -IMF data
The U.S. dollar’s share of currency reserves reported to the International Monetary Fund fell to 60.4% in the third quarter, from 61.2% in the second, IMF data showed on Thursday.
The dollar, however, remains the largest-held currency by global central banks.
· CORONAVIRUS UPDATES:
Global Cases: 79.69M (+642,767)
Global Deaths: 1.74M (+11,475)
U.S. Cases: 19.09M (+172,671)
U.S. Deaths: 336,837 (+2,606)
U.K. Cases: 2.18M (+39,036)
U.K. Deaths: 69,625 (+574)
TH Cases: 5,829 (+67)
TH Deaths: 60
Myanmar Cases: 119,788 (+919)
Myanmar Deaths: 2,532 (+25)
· UK imposes more lockdowns as mutated COVID variant causes record cases
The British government on Wednesday said huge swathes of England would be placed under its strictest COVID-19 restrictions as a highly infectious virus variant sweeps the country, pushing the number of cases to a record level.
Britain reported almost 40,000 new infections as the mutated variant of the coronavirus, which could be up to 70% more transmissible than the original, causes the number of cases and hospital admissions to soar.
· Iran says U.S. approved its funds transfer to buy COVID vaccines
Iran has won U.S. approval to transfer funds for coronavirus vaccines from overseas, the central bank chief said on Thursday, as its daily death toll fell to a three-month low.
· Oil edges higher after Brexit deal, gains capped by pandemic
Oil prices inched higher on Thursday, helped by late-day buying in a low-volume session to close out the week.
The market built gains overnight as Britain and the European Union reached a post-Brexit trade deal, reversed those gains, and then rebounded during the U.S. session to end modestly higher.
U.S West Texas Intermediate (WTI) crude CLc1 settled up 11 cents to $48.23 a barrel, while Brent crude futures settled 9 cents higher at $51.29. Volumes were light on the last trading day before the Christmas holiday.
For the week, U.S. crude fell 1.6% while Brent lost 2%.
Markets have rallied sharply since late October as vaccines progressed to approval in numerous countries. Worldwide, infections are still growing, and investors’ outlook will be clouded by the pandemic for several months.
· Trump warns Iran over rocket strike on embassy in Iraq
US President Donald Trump warned Wednesday he would hold "Iran responsible" in the event of a fatal attack on Americans in Iraq, as the first anniversary of the killing of a top Iranian general in a US air strike approaches.
"Our embassy in Baghdad got hit Sunday by several rockets," Trump said on Twitter, referring to an attack that caused damage but no deaths.
"Guess where they came from: IRAN," he added.
· Wall Street closes with a modest gains on Brexit deal, stimulus hopes
The S&P 500 ended higher at the close of a shortened session on Thursday as investors headed into the long Christmas weekend with hopes that an imminent stimulus agreement, a Brexit deal, and the ongoing vaccine rollout will spell brighter days in the coming year.
All three major U.S. stock indexes ended in positive territory.
More than one million Americans have now been vaccinated against COVID-19 even as the pandemic continues to rage in the United States and political leaders moved to guard against a more contagious variant of the disease sweeping across Britain.
The Dow Jones Industrial Average rose 70.04 points, or 0.23%, to 30,199.87, the S&P 500 gained 13.05 points, or 0.35%, to 3,703.06 and the Nasdaq Composite added 33.62 points, or 0.26%, to 12,804.73.
For the holiday-shortened week, the S&P 500 edged lower, the Dow eked out a nominal gain and the Nasdaq advanced.
Reference: CNBC, Reuters, Worldometers, France 24
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