Gold jumps more than 2% as dollar sags
· Gold prices rose more than 2% on Monday to their highest level in nearly two months, bolstered by the dollar’s slide ahead of runoff elections for both U.S. Senate seats from Georgia.
· Spot gold was up 2.4% at $1,943.13 an ounce. The session high of $1,944.11 was its highest mark since Nov. 9. U.S. gold futures settled up 2.7% at $1,946.60.
· The dollar index slid to a 2-1/2 year low, making bullion cheaper for holders of other currencies. Investors were watching Tuesday’s run-off elections in Georgia, which will decide which party controls the U.S. Senate.
If President-elect Joe Biden’s Democrats gain control of both houses of the U.S. Congress, his administration would find it easier to push policies such as rewriting the tax code to boosting stimulus and infrastructure spending.
· “There is the likelihood that we will see significant stimulus, which will lead to further declines in the dollar,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.
“The Senate election this week could turn out to be a major disruptive event so gold is rallying on that,” Sica added.
· Many investors view non-yielding bullion as a hedge against inflation and currency debasement that they fear could result from large stimulus measures.
· Tougher lockdown restrictions are expected in Britain and Japan, as COVID-19 cases mount.
· The coronavirus variant in South Africa is likely to have an impact on precious metals prices, said StoneX analyst Rhona O’Connell.
“The ban on flights out of South Africa is going to hit precious metals exports - certainly gold, platinum and palladium ... which are transported by air, and the majority of that is on passenger flights,” she said.
· Platinum eased 0.4% to $1,063.87 after hitting its highest level since August 2016 at $1,127.82.
· Silver gained 3.1% to $27.17 an ounce, touching its highest price since Sept. 15, 2020, earlier, while palladium dipped by 3.1% to $2,372.92.
FOMC SPEECHES:
· Fed's Evans sees long period of accommodative monetary policy
Chicago Federal Reserve President Charles Evans on Monday said the U.S. central bank’s current policy stance is “well-positioned” and that by springtime it would become clearer if or how the Fed needs to adjust its asset purchase program.
“Our current way of doing the $120 billion of purchases every month is reasonable across a wide range of maturities; if we see that we need more accommodation we could adjust and move the current pace into a longer duration, or we could expand the pace of purchases, or, if we saw that things were going better we could change the duration as well,” Evans told reporters after participating in a panel at the annual meeting of the Allied Social Science Associations.
“We are going to want to have full confidence that the recovery is going to be a robust one, that we are well on our way to growth rates this year of 4% for GDP ... and the unemployment rate going down to 5-ish percent,” Evans said.
Moreover, He had a message for markets: vaccines may bring the coronavirus pandemic under control this year, but the U.S. central bank is nowhere close to ending its super-easy monetary policy.
“To meet our objectives and manage risks, the Fed’s policy stance will have to be accommodative for quite a while,” Evans said in remarks prepared for delivery to the annual meeting of the Allied Social Science Associations, held virtually because of the ongoing health crisis.
“Economic agents should be prepared for a period of very low interest rates and an expansion of our balance sheet as we work to achieve both our dual mandate objectives.”
The Fed’s two goals, set by Congress, are full employment and stable prices. The U.S. economy is far from both, with unemployment at 6.7% in November and inflation lingering below the Fed’s 2% goal for years now.
· Fed's Mester says monetary policy will remain accommodative for 'quite some time'
U.S. economic growth could surge later this year if most Americans are vaccinated against the coronavirus, but the gains would unlikely be enough for the Federal Reserve to pull back its support, Cleveland Fed President Loretta Mester said on Monday.
Even if the vaccines help people feel safe doing certain activities, the economy would likely remain far from the Fed’s goals for inflation and full employment, Mester said.
“Monetary policy will need to remain highly accommodative for quite some time because achieving our monetary policy goals is likely to be a journey and not a sprint,” Mester said during remarks prepared for the annual meeting of the Allied Social Science Associations, which is being held virtually this year.
· Fed's Bostic says bond-buying 'recalibration' could happen in 2021
The Federal Reserve could begin to trim its monthly asset purchases this year if distribution of coronavirus vaccines boosts the economy as expected, Atlanta Fed President Raphael Bostic said on Monday in what amounted to a bullish outlook for the coming months.
“I am hopeful that in fairly short order we can start to recalibrate,” the $120 billion in U.S. Treasury and mortgage-backed securities that the U.S. central bank is currently buying each month, Bostic said in an interview with Reuters.
· CORONAVIRUS UPDATES:
Global Cases: 86.06M (+502,847)
Global Deaths: 1.85M (+8,703)
U.S. Cases: 21.32M (+163,375)
U.S. Deaths: 361,814 (+1,676)
India Cases: 10.35M (+16,278)
India Deaths: 149,886 (+200)
U.K. Cases: 2.71M (+58,784)
U.K. Deaths: 75,431 (+407)
TH Cases: 8,439 (+745)
TH Deaths: 65 (+1)
Myanmar Cases: 126,935 (+590)
Myanmar Deaths: 2,744 (+16)
· New York Gov. Cuomo confirms state’s first case of new Covid strain initially found in UK
New York state confirmed its first case of a new, more contagious variant of the coronavirus that was initially discovered in the United Kingdom, Gov. Andrew Cuomo said Monday.
The strain, which has also been found in California, Florida and Colorado, is thought to be more transmissible but doesn’t appear to make people more ill or increase the risk of death from Covid-19, experts have said.
The case was identified in a 60-year-old man from Saratoga County who had no travel history, Cuomo said during a conference call with reporters. The man, who is now recovering, worked at a jewelry store where three other people have also tested positive for Covid-19. The state is investigating whether those cases were caused by the new strain.
· New York, Florida tell hospitals to speed COVID-19 vaccinations or lose supply
· BioNTech says no data to support delayed vaccine booster shot offers Covid protection
“There is no data to demonstrate that protection after the first dose is sustained after 21 days.”
Germany was considering on Monday whether to allow a delay in administering the second dose to make scarce supplies go further after a similar move by Britain last week. Separately, Denmark approved a delay of up to six weeks between the first and second shots of the vaccine.
· British Prime Minister Boris Johnson imposes national lockdown on England to combat new Covid variant
British Prime Minister Boris Johnson said England is adopting a national lockdown that he hopes will be tough enough to contain a new, highly contagious variant of Covid-19.
People can only leave their homes to shop for essentials, work if they can’t from home, exercise, go to the doctor’s and escape domestic abuse, he said in an announcement Monday evening. Primary schools, secondary schools and colleges will also move to remote learning Tuesday, except in rare cases, he said.
· UK’s decision to delay second Covid vaccine shot reluctantly endorsed by advisers
Health experts have conditionally backed the U.K.’s decision to delay administering a second dose of the coronavirus vaccine developed by Pfizer and BioNTech, warning that the need to suppress the new coronavirus strain “cannot be overstated.”
It comes shortly after the U.K. said second doses of the Pfizer-BioNTech jab, in addition to the newly-approved Covid-19 vaccine developed by AstraZeneca and the University of Oxford, would now be given up to 12 weeks after the first dose.
· European Union criticized for slow vaccine rollout as countries tighten restrictions once again
The European Union has been criticised for the speed of its deployment of Covid vaccines, as its two biggest economies extend their coronavirus restrictions due to worrying case numbers.
A number of European officials have voiced their concerns about the bloc’s vaccination plans over the last few days and have asked the European Commission, the executive arm of the EU, to explain why it has not bought more jabs.
According to the European Centre for Disease Prevention and Control, there have been more than 17 million reported cases of the coronavirus in the region (including the U.K.) to date.
In addition to concerns over timings, there are also questions about whether enough vaccines have been purchased by the EU.
· Trump made false claims in call pressuring Georgia secretary of state to undo Biden win, official says
President Donald Trump made a series of “provably false” claims during his controversial phone call to pressure Georgia’s secretary of state to reverse President-elect Joe Biden’s win there, a top elections official said Monday.
Gabriel Sterling, Georgia’s voting system implementation manager, gave a point-by-point refutation of Trump’s allegations at a press conference, which came two days after Trump leaned on Secretary of State Brad Raffensperger during an unprecedented hour-long phone call to “find” the president enough votes to beat Biden.
During that call, which officials in Raffensperger’s office had recorded, Trump made a series of claims about purported voting irregularities in Georgia’s presidential election that he said had led to Biden unfairly winning.
The president and his allies elsewhere have made similar allegations, related to felons, underage teenagers and dead people supposedly casting ballots.
“The reason I’m having to stand here today is, there are people in positions of authority and respect who have said their votes didn’t count, and it’s not true,” Sterling said.
“And I’m going to do it again, and I’m going to go through all this, ‘anti-disinformation Monday.’”
Standing next to a chart labeled “Claim vs. Fact,” with two rows of each underneath those words, Sterling said, “This is all easily, provably false.”
“Yet, the president persists and by doing so undermines Georgians’ faith in the elections system, especially Republican Georgians in this case,” he said.
· Major business leaders tell Congress: Certify Biden won Electoral College, Trump lost
Business groups including the U.S. Chamber of Commerce, the National Association of Manufacturers, and the Partnership for New York City separately issued statements calling for an end to efforts to undermine Biden’s win.
“This presidential election has been decided and it is time for the country to move forward. President-elect Joe Biden and Vice President-elect Kamala Harris have won the Electoral College and the courts have rejected challenges to the electoral process,” the Partnership for New York City said in its statement.
“Congress should certify the electoral vote on Wednesday, January 6. Attempts to thwart or delay this process run counter to the essential tenets of our democracy,” that group said.
Chamber of Commerce CEO Thomas Donohue in his statement said that “efforts by some members of Congress to disregard certified election results in an effort to change the election outcome or to try a make a long-term political point undermines our democracy and the rule of law and will only result in further division across our nation.”
· Australia’s growth may ‘never return’ to its pre-virus path after trade trouble with China, says economist
China is by far Australia’s largest trading partner, accounting for 39.4% of goods exports and 17.6% of services exports between 2019 and 2020, the firm said.
But Beijing has for months been targeting a growing list of imported products from Down Under — putting tariffs on wine and barley, and suspending beef imports.
Gross domestic product (GDP) in Australia could contract even more if Beijing continues to pile tariffs on more Australian imports, said its senior economist Marcel Thieliant in a note last week.
Goods and services that are already “in the firing line” are worth almost a quarter of Australia’s exports to China — forming 1.8% of its economic output, the research firm said.
But it may not end there.
“That figure could rise to around 2.8% of GDP if China targeted other products for which it isn’t hugely dependent on Australian imports,” Thieliant said.
More restrictions by Beijing could come, including exports of gold, alumina – a type of material for industrial usage – and a “vast range of smaller items,” the report said.
“While Australia should be able to divert some shipments to other countries, the escalating trade war is another reason why Australia’s economy will never return to its pre-virus path even once the pandemic has been brought under control,” Thieliant said.
Overall, the country’s gross domestic product could fall short of its pre-virus trajectory by about 1.5 percentage points at the end of 2022 – and additional trade restrictions by China could widen that shortfall further, said Capital Economics.
· FTSE Russell cuts three more China firms from indexes after U.S. blacklist
FTSE Russell will delete a further three firms from its global equity indexes after guidance on an executive order by outgoing President Donald Trump barring U.S. investments in some Chinese companies, a hardening of his stance against Beijing.
China United Network Communications, Semiconductor Manufacturing International Corporation (SMIC) and Nanjing Panda Electronics will be deleted from FTSE Russell’s FTSE Global Equity Index Series as well as the FTSE Global China A Inclusion Indexes from Thursday.
FTSE Russell said on Monday it will also remove SMIC, China’s top microchip maker, from its FTSE China 50 Index and video security firm Hangzhou Hikvision Digital Technology from its FTSE China A50 index having removed it from the FTSE Global Equity Index Series last month.
· Iran resumes 20% enrichment at Fordow amid rising tensions with U.S
Iran has resumed 20% uranium enrichment at an underground nuclear facility, the government said on Monday, breaching a 2015 nuclear pact with major powers and possibly complicating efforts by U.S. President-elect Joe Biden to rejoin the deal.
· U.S. accuses Iran of 'nuclear extortion' after enrichment statement
· U.S. calls for Iran to release South Korean-flagged tanker
The U.S. State Department called on Iran on Monday to immediately release a South Korean-flagged tanker that it seized in the Gulf and accused Tehran of threatening freedom of navigation as a way to extract relief from economic sanctions.
Reference: CNBC, Reuters, Worldometers
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