Gold slides more than 2% as dollar rebounds, Treasury yields jump
· Gold tumbled more than 2% on Wednesday, hit by a rebound in the dollar as U.S. Treasury yields surged, showing that investors are betting on a Democrat win in the U.S. Senate runoff elections in Georgia.
· Spot gold was down 2.2% at $1,907.21 per ounce, having earlier hit a near two-month peak at $1,959.01. U.S. gold futures settled down 2.3% at $1,908.60.
· “Higher (bond) yields have boosted the dollar and triggered a selloff in gold that accelerated with stops under $1,935-40,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
”$1,900 is an important pivot that needs to hold to maintain the short term bullish narrative.”
The 10-year U.S. Treasury yield, rose above 1% for the first time since March, increasing the opportunity cost of holding non-interest bearing gold. The dollar index firmed after a dive to 2-1/2-year lows, making gold less attractive for those holding other currencies.
But BMO’s Wong said this was a buying opportunity. “A Democratic Congress with Biden in the White House is a license to spend and that’s not a lower gold environment.”
· Gold remains underpinned as an inflationary hedge, with investors expecting more fiscal stimulus as the Democrats lead in runoff votes that will determine control of the U.S. Senate
· David Meger, director of metals trading at High Ridge Futures, said the pullback was a short-term move as a potential “Blue Wave” in the U.S. Senate would be dollar negative and “supportive to gold and silver from a longer term perspective.”
· Meanwhile, minutes of the U.S. Federal Reserve’s Dec. 15-16 policy meeting are due at 1900 GMT.
· Other metals followed gold's slide. Silver fell 2% to $27.00 an ounce, while platinum dipped 0.9% to $1,102.04. Both metals had fallen more than 3% earlier in the session.
· Palladium was down 1.5% at $2,430.39, having earlier declined as much as 3%.
· Markets will get plenty of notice before Fed cuts back on bond purchases, minutes show
The Federal Reserve will do what it can to prevent a taper tantrum when it finally decides to scale back on its bond purchases, minutes from the central bank’s most recent meeting showed Wednesday.
Following a two-day session Dec. 15-16, the policymaking Federal Open Market Committee voted to keep its benchmark short-term interest rate anchored near zero.
Markets, though, were focused on discussion surrounding the Fed’s asset purchase program. The central bank has been buying at least $120 billion in Treasurys and mortgage-backed securities each month, and at the meeting pledged to keep doing so until it sees “substantial further progress” towards its goals regarding inflation and employment.
Minutes noted unanimous approval around the “outcome-based” approach to the program, though members noted that doesn’t mean the purchases will be tied to specific numeric goals.
Officials agreed that markets would get plenty of notice before the asset purchases were curtailed. The last time the Fed cut back on its asset purchases, it triggered a “taper tantrum” in the market that officials want to avoid this time.
· CORONAVIRUS UPDATES:
Global Cases: 87.57M (+750,075)
Global Deaths: 1.88M (+13,562)
U.S. Cases: 21.82M (+235,722)
U.S. Deaths: 369,448 (+3,589)
India Cases: 10.39M (+20,460)
India Deaths: 150,372 (+221)
U.K. Cases: 2.83M (+62,322)
U.K. Deaths: 77,346 (+1,041)
TH Cases: 9,331 (+365)
TH Deaths: 66 (+1)
Myanmar Cases: 128,178 (+594)
Myanmar Deaths: 2,785 (+19)
· Japan calls for limited emergency declaration as COVID-19 cases surge
The Japanese government on Thursday proposed declaring a one-month state of emergency limited to Tokyo and three neighbouring prefectures effective from Jan. 8 to Feb. 7.
· European regulator approves Moderna Covid vaccine for use in the EU
The European Medicines Agency on Wednesday recommended Moderna’s coronavirus vaccine for use in the European Union, at a time when criticism grows about the slow rollout of the jabs across the bloc.
European regulator approves Moderna Covid vaccine for use in the EU
The European Medicines Agency on Wednesday recommended Moderna’s coronavirus vaccine for use in the European Union, at a time when criticism grows about the slow rollout of the jabs across the bloc.
· Private payrolls post first drop since April as coronavirus spread hits job growth, ADP says
Private payrolls in December contracted for the first time since the early days of the coronavirus pandemic, according to a report Wednesday from ADP.
The decrease of 123,000 provided a sign that the U.S. economy had cooled considerably heading into the end of 2020. Economists surveyed by Dow Jones had been expecting growth of 60,000.
· Control of Senate allows Democrats to chance to act on judges, $2,000 checks and ambitious Biden agenda and act on Biden’s climate change agenda
Democrats won Tuesday’s two Senate runoff elections in Georgia, NBC News projected Wednesday, clinching control of the U.S. Senate and significantly shaping what President-elect Joe Biden can accomplish on climate change and other issues when he takes office.
The projected victories of the Rev. Raphael Warnock and Jon Ossoff give the Democratic Party 50 seats and leave a tiebreaking vote to Vice President-elect Kamala Harris. Current Minority Leader Chuck Schumer, D-N.Y., will become majority leader in place of Republican Sen. Mitch McConnell, and Schumer will then decide what occurs on the Senate floor.
Without a GOP-controlled Senate, Biden has greater leeway to pass climate change legislation. The former vice president’s climate action pledge includes an ambitious $2 trillion economic plan that would accelerate a clean-energy transition, cut carbon emissions from the electricity sector by 2035 and achieve net-zero emissions by 2050.
The goals of Biden’s climate plan are in line with targets set by other major economies including China and the European Union. However, many of the policies would have been blocked by a Republican-controlled Senate.
The $2 trillion plan will still be a tough sell even as Democrats take over the White House and Senate. But experts are optimistic for some broader bipartisan-backed climate legislation to pass in upcoming years.
Bipartisan climate legislation could address policies that target wind and solar energy, carbon capture and tax incentives for clean energy, among other things.
Some environmental experts worry that not enough Democrats will take serious climate action and expect more modest bipartisan legislation that won’t match demands of climate advocates or actions by other countries.
· Congress set to begin certification of Biden election win — Trump allies will try to block
The final step in confirming Joe Biden as the next president of the United States is set for Wednesday afternoon as Congress convenes in joint session to certify that he defeated President Donald Trump in the Electoral College vote.
With Democrat Biden’s 306 electoral votes — 36 more than needed — the process normally would be a formality. But this year, it may take days because of what is likely to be a doomed effort by Trump to overturn his defeat, based on his false claims that he lost as the result of widespread ballot fraud.
The process is scheduled to begin at 1 p.m. ET, with Vice President Mike Pence presiding as the states’ certifications of their election results are unsealed in alphabetical order.
· Trump protestors rally at statehouses across the U.S. as Capitol Hill demonstrations turn violent
· U.S. Capitol secured hours after pro-Trump rioters invade Congress
Protesters supporting President Trump stormed the U.S. Capitol, causing Congress to suspend proceedings to confirm the election of Joe Biden as president.
Protesters freely roamed through the Capitol complex, including the Senate chamber, where one man stood on the president of the Senate’s chair and shouted, “Trump won that election!”
Vice President Mike Pence, who had been presiding over the count of Electoral College votes, was rushed out of the Senate as the complex went into lockdown as Trump supporters began breaching the complex.
Pence and Sen. Charles Grassley, the president pro-tempore, were taken to a secure location.
· Biden condemns riots at Capitol, calls on Trump to demand end to siege
Biden did not spare President Donald Trump.
· Trump tells Capitol rioters to ‘go home’ but repeatedly pushes false claim that election was stolen
· Congress resuming process to confirm Biden win, hours after Trump supporters storm Capitol
· U.S. to urge firms comply with China investment ban in new guidance, sources say
The U.S. State Department plans to release as soon as Wednesday a fact sheet urging U.S. investors to comply with an executive order banning investments in alleged Chinese military companies, according to three people familiar with the matter and a copy of the document seen by Reuters.
· North Korea's Kim vows to boost military capabilities at rare party congress
North Korean leader Kim Jong Un said he would expand military capabilities to better defend the country, state media reported on Thursday, during a rare party congress as the country faces international sanctions and pressure.
Reference: CNBC, Reuters, Worldometers
Thai
Eng