Gold rises as dollar, U.S. Treasury yields slip
· Gold prices edged higher in a choppy trading on Tuesday as the U.S. dollar and Treasury yields eased, while prospects of higher inflation driven by more U.S. fiscal stimulus provided further support to the metal.
· Spot gold was up 0.2% at $1,848.31 per ounce. On Monday, prices touched their lowest level since Dec. 2. U.S. gold futures settled 0.4% lower at $1,844.20.
· “Investors’ willingness to buy U.S. debt boosted confidence in U.S. assets as stocks rallied and the dollar slipped, both of which helped gold rally a bit,” said Tai Wong, head of base and precious metals derivatives trading at BMO.
· The dollar index slipped 0.3% against its rivals, while 10-year U.S. treasury yields fell to a session low of 1.146% after a strong 10-year auction.
· “There’s going to be a big stimulus package that should be supportive for the gold market, it can not only stimulate demand but also prompt ideas of some problematic price inflation,” said Kitco Metals senior analyst Jim Wyckoff.
· U.S. President-elect Joe Biden said Americans needed more economic relief from the COVID-19 pandemic and that he would deliver a plan costing “trillions” of dollars.
· Gold is generally considered a hedge against the inflation and currency debasement that can result from widespread stimulus. However, higher bond yields have challenged that status recently as they increase the opportunity cost of holding non-yielding bullion.
· While gold was still vulnerable in the short term to gains in the dollar and yields, “the macro picture is still positive for gold,” said Nicholas Frappell, global general manager at ABC Bullion.
· Silver gained 2.3% to $25.49 an ounce. Platinum climbed 3.3% to $1,065.42 and palladium rose 0.4% to $2,381.18.
· Goldman says bitcoin is starting to mature but institutional money is a tiny fraction of the market
Bitcoin is showing signs of maturity but the level of institutional investment in the nascent market is still very small, according to Goldman Sachs’ Jeff Currie.
The investment bank’s head of commodities research said that more money from the financial world would need to flow into bitcoin in order for it to stabilize. Bitcoin and other cryptocurrencies saw a brutal sell-off on Monday that wiped off as much as $200 billion from the market value of all digital coins combined in just 24 hours.
· CORONAVIRUS UPDATES:
Global Cases: 91.97M (+652,030)
Global Deaths: 1.96M (+15,510)
U.S. Cases: 23.35M (+212,404)
U.S. Deaths: 389,425 (+4,085)
UK Cases: 3.16M (+45,533)
UK Deaths: 83,203 (+1,243)
South Africa Cases: 1.26M (+13,105)
South Africa Deaths: 34,334 (+326)
Asian Updates:
Japan Cases: 292,212 (+5,977)
Japan Deaths: 4,094 (+50)
China Cases: 87,591 (+55)
China Deaths: 4,634
South Korea Cases: 69,651 (+537)
South Korea Deaths: 1,165 (+25)
Malaysia Cases: 141,533 (+3,309)
Malaysia Deaths: 559 (+4)
Myanmar Cases: 131,737 (+551)
Myanmar Deaths: 2,878 (+20)
Thailand Cases: 10,834 (+287)
Thailand Deaths: 67
· Japan set to expand state of emergency, public cools to Olympics
· U.S. will require negative Covid tests for inbound international air travel
· Global investors call for end to seafarers marooned at sea due to coronavirus
· Brazil researchers report 50.4% efficacy for China's CoronaVac COVID-19 vaccine
A coronavirus vaccine developed by China's Sinovac Biotech was 50.4 per cent effective at preventing symptomatic infections in a Brazilian trial, researchers said on Tuesday (Jan 12), barely enough for regulatory approval and well below the rate announced last week.
The latest results are a major disappointment for Brazil, as the Chinese vaccine is one of two that the federal government has lined up to begin immunisation during the second wave of the world's second-deadliest COVID-19 outbreak.
Several scientists and observers blasted the Butantan biomedical centre for releasing partial data just days ago that generated unrealistic expectations. The confusion may add to scepticism in Brazil about the Chinese vaccine, which President Jair Bolsonaro has criticised, questioning its "origins".
· House GOP chair Liz Cheney, other Republican lawmaker will vote to impeach Trump
She is the highest-ranking Republican to call for the president’s impeachment in the wake of Wednesday’s deadly Capitol Hill riot, which Trump helped incite with lies and incendiary rhetoric.
· Three U.S. House Republicans declare support for impeaching Trump
President Donald Trump’s iron grip on his party showed further signs of weakening on Tuesday as at least three Republicans, including a member of the House leadership, said they would vote to impeach him after his supporters stormed the Capitol.
· Trump warns impeachment is ‘tremendous danger’ to U.S., doesn’t take responsibility for Capitol riot
· House set to call on Pence, Cabinet to remove Trump from office
· Pence tells Pelosi he will not invoke 25th Amendment to remove Trump
· Feds consider sedition and conspiracy charges in probe of pro-Trump Capitol riot
Federal authorities said Tuesday they expect to soon charge hundreds of people in connection with the Capitol riot.
Officials added that they have directed a strike force to gather evidence for prosecutions for sedition and conspiracy.
And an FBI official confirmed a report that the FBI received intelligence regarding the possibility of violence in advance of Wednesday’s riot, and shared that information with other law enforcement agencies in Washington.
· Fed members: Monetary policy should remain accommodative
CNBC’s Steve Liesman reports on sentiment of Fed members and the outlook for monetary policy and interest rates.
· Fed’s Esther George cautions that inflation could rise faster than expected
· Markets are looking everywhere for inflation as yields rise, CPI on deck Wednesday
With the sharp move higher in interest rates, markets have been on the lookout for inflation creeping up.
So Wednesday’s December CPI report will be important even if it still shows a muted rise in the consumer price index. According to Dow Jones, economists expect an increase of 0.4% month over month, and 1.3% year over year. Core CPI, less food and energy, is expected to be up 0.1% or 1.6% year over year, versus 0.2% and 1.6% in November.
The rapid move higher in bond yields since the start of the year has been accompanied by rising inflation expectations. The 10-year breakeven, a bond market instrument for inflation expectations, was at 2.07% Tuesday, suggesting investors expect inflation to average that level for the next 10 years. It was as high as 2.11% last week.
· Citing Biden transition, U.S. cancels U.N. envoy's trip to Taiwan
· Taiwan says it respects decision to cancel U.S. visit
· North Korea's Kim urges stronger military capabilities as party congress ends
Reference: CNBC, Reuters, Worldometers, CNA
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