Gold, silver slump as U.S. political risks fade, yields gain
· Gold slumped more than 4% on Friday and silver followed with a near 10% plunge as prospects for a smooth transition of power in Washington and a jump in U.S. Treasury yields hammered the precious complex.
· Spot gold fell as low as $1,828.36 and was last down 3.6% at $1,843.06 per ounce, en route to register its worst week since November. U.S. gold futures settled down 4.1% to $1,835.40.
· “Gold is having a major fundamental shift for many investors and they’re starting to abandon their safe haven trade,” said Edward Moya, senior market analyst at OANDA.
“You’re probably going to see that the Treasury market sees some strong flows and that’s taking away some of the appeal from gold.”
· Democrat control of the U.S. Senate has raised bets for large stimulus, lifting the benchmark 10-year bond yield to its highest since March.
· Since U.S. President Donald Trump has agreed to an orderly transition of power, there’s been some “temporary profit-taking,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.
· “Once gold broke below $1,900, some of the momentum traders continued to execute sell orders.”
While gold has generally been seen as a hedge against the inflation that could result from widespread stimulus, especially last year, that has changed as higher bond yields increase the opportunity cost of holding non-interest yielding bullion.
· “We’re going to see a lot more of stimulus and that ultimately moved interest rates higher,” said Bart Melek, head of commodity strategies at TD Securities.
· Some analysts also said a few investors could have also diverted funds to Bitcoin, which has extended a meteoric rally.
· Silver slid 7.3% at $25.14 per ounce, after falling as much as 9.8%, while palladium eased 2.6% to $2,356.23 per ounce. Both metals were set to face their worst week since November.
· Platinum dipped 5% to $1,060.87, paring an earlier 6.2% drop.
· Economy sees job loss in December for the first time in eight months as surging virus takes toll
Economy sees job loss in December for the first time in eight months as surging virus takes toll
The unemployment rate was unchanged at 6.7%, compared to a 6.8% estimate. An alternative unemployment measure that includes discouraged workers and those holding part-time jobs for economic reasons declined to 11.7% from 12%.
“Today’s report showed the economy’s not just tapping on the brakes, but actually has been thrown into reverse,” said Daniel Zhao, senior economist at job search and review site Glassdoor. “It’s obvious how bad the winter wave of the pandemic has been, and the economic data is now starting to reflect that.”
· CORONAVIRUS UPDATES:
Global Cases: 90.66M (+596,389)
Global Deaths: 1.94M (+8,656)
U.S. Cases: 22.90M (204,259)
U.S. Deaths: 383,226 (+1,743)
India Cases: 10.46M (+16,085)
India Deaths: 151,198 (+150)
Brazil Cases: 8.10M (+29,792)
Russia Cases: 3.40M (+22,851)
UK Cases: 3.07M (+54,940)
South Africa Cases: 1.23M (+17,421)
Japan Cases: 280,775 (+7,621)
Japan Deaths: 3,996 (+64)
South Korea Cases: 68,664 (+665)
South Korea Deaths: 1,125 (+25)
China Cases: 87,433 (+69)
China Deaths: 4,634
Myanmar Cases: 130,604 (+555)
Myanmar Deaths: 551 (+9)
Thailand Cases: 10,298 (+245)
Thailand Deaths: 67
· China reports most COVID-19 cases since July 30 amid Hebei outbreak
· Moderna coronavirus vaccine becomes the third approved for use in the UK
The U.K.’s medicines regulator approved Moderna’s coronavirus vaccine on Friday for emergency use in the country.
It comes as the U.K. battles a more contagious strain of the virus, which has prompted an alarming surge of infections and deaths nationwide and resulted in a third lockdown.
Moderna’s is the third shot that has been authorized for use in Britain, following earlier approvals for the vaccines from Pfizer and BioNTech and the University of Oxford and AstraZeneca.
· Pro-Trump dark money groups organized the rally that led to deadly Capitol Hill riot
At least five people have been pronounced dead, including a police officer. Though the Justice Department has said Trump himself is not expected to be charged, acting D.C. U.S. Attorney Michael Sherwin had previously acknowledged he’s “looking at all actors” that had a role in Wednesday’s attack.
· Pelosi tells House to move forward with impeachment if Trump does not resign
· China and Russia could exploit chaos in the U.S. after Capitol riot, says a national security expert
Reference: CNBC, Reuters, Worldometers
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