Gold steady as investors bet on more stimulus-led inflation
· Gold prices held steady on Wednesday, underpinned by data showing a rise in consumer prices in the United States and expectations that more fiscal stimulus from a Joe Biden administration could trigger higher inflation.
· Spot gold was little changed at $1,854.84 an ounce. U.S. gold futures settled up 0.6% at $1,854.90.
· Bob Haberkorn, senior market strategist at RJO Futures, said expectations for more stimulus, higher-than-expected inflation and safe-haven buying driven by the political environment in the United States were keeping gold supported.
The Labor Department on Wednesday said its consumer price index increased 0.4% last month after gaining 0.2% in November.
“It shows that there’s a slight uptick in inflation, which is always supportive of gold,” Haberkorn said.
But capping bullion’s gains, the dollar firmed and benchmark 10-year Treasury yields hovered close to their highest level in nearly 10 months.
· 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.
· “Complacent positioning in gold is being shaken up, that’s a direct result of the blue sweep which forced the markets to price in a substantial increase in treasury supply,” said Daniel Ghali, commodity strategist at TD Securities.
· U.S. President-elect Biden said he would unveil a plan on Thursday to provide trillions of dollars of support for the American economy as it grapples with the coronavirus crisis.
· Meanwhile, exchange-traded funds storing gold for investors shrank for a second month in December, but nevertheless grew more than ever before in 2020, the World Gold Council said.
· Among other precious metals, silver fell 0.5% to $25.45 an ounce, platinum rose 2.2% to $1,099.55 and palladium edged 0.2% higher to $2,396.71.
· Rising 10-year yields is one of the 2021 risks: Goldman’s Kostin
David Kostin, Goldman Sachs chief U.S. equity strategist, joins “Squawk on the Street” to discuss the market outlook for 2021.
· The turmoil in Washington continues.
Vice President Mike Pence said Tuesday night he will not remove President Donald Trump from office. That came before the Democratic-held House approved a resolution urging Pence and the Cabinet to push Trump out of the White House after he incited last week’s riot on the Capitol.
· Trump condemns Capitol violence a week after riot, as he faces second impeachment trial
· Trump becomes first president to be impeached twice, as bipartisan majority charges him with inciting Capitol riot
The president’s behavior in the 13 months since the first impeachment left House Democrats making a more clear-cut case than the first time around. The chamber charged Trump in a 232-197 vote, as all Democrats and 10 Republicans backed the measure.
The four-page article of impeachment the chamber approved on Wednesday argues Trump fed his supporters months of false claims that widespread fraud cost him the 2020 election, then urged them to contest the results before they marched to the Capitol and disrupted Congress’ count of President-elect Joe Biden’s win.
Still, Congress likely will not have enough time to push the president out of office before next week — even if the now GOP-held Senate chooses to convict him. Senate Majority Leader Mitch McConnell, R-Ky., said after the House vote that the upper chamber would not start the trial until “our first regular meeting following receipt of the article from the House” — Tuesday at the earliest. The timeline means the impeachment proceedings will drag into Biden’s term.
· Trump impeachment updates: McConnell says ‘no chance’ of Senate verdict before Biden inauguration
· Schumer says Senate could vote on barring Trump from running for office again
· Biden's economic plan to focus on immediate rescue from COVID-19 crisis -adviser
President-elect Joe Biden will press Congress on Thursday to deliver immediate pandemic “rescue” efforts before turning to broader “recovery” measures like healthcare and infrastructure, the incoming administration’s top economic adviser said on Wednesday.
In an appearance at Reuters Next, Brian Deese, who will head the National Economic Council in the new Democratic administration, said Biden will lay out a two-track economic plan.
The first will be a “rescue bucket,” including rounding out the $2,000 payments he wanted to help weather the COVID-19 downturn, and a longer-term recovery effort that aims to deliver on the Build Back Better plan he laid out during the presidential campaign.
He said the transition team has already started briefing senior Democratic and Republican lawmakers on the proposal, which will be unveiled on Thursday.
The proposal will include the direct payments, money to ramp up a national vaccinations effort, testing, contact tracing and funding to get most schools reopened shortly.
· Fed policymakers push back on QE taper talk
Despite optimism over vaccines and the likelihood of more fiscal stimulus under the incoming Biden administration, the Federal Reserve is sticking with its super-easy monetary policy, policymakers made clear on Wednesday.
“The economy is far away from our goals in terms of both employment and inflation,” Fed Governor Lael Brainard told the Canadian Association for Business Economics. “Given my baseline outlook, I expect that the current pace of purchases will remain appropriate for quite some time.”
The Fed is adding Treasuries and mortgage-backed securities to its balance sheet at a pace of $120 billion a month, and has promised to keep doing so until it sees “substantial further progress” toward its goals of full employment and 2% inflation.
“Even under an optimistic outlook, it will take time to achieve substantial further progress,” Brainard said, adding that the purchases are supporting the recovery and “we stand ready to increase those amounts should we judge that to be warranted.”
St. Louis Fed President James Bullard said that while the labor market has improved dramatically, there was still a long way to go.
· Clarida says Fed won't raise rates until its sees 2% inflation
Federal Reserve Vice Chair Richard Clarida on Wednesday reiterated that the U.S. central bank won’t raise interest rates until inflation reaches 2%, and he expressed confidence that market participants believe in that promise, a key element in the Fed’s strategy.
“We are not going to lift off until we get inflation at 2% for a year. ... We are trying to tie our hands. We are saying we are not going to hike until we get to 2%,” Clarida told a conference held by the Hoover Institution. “It actually doesn’t seem lacking credibility to markets that we are going to do that.”
· Fed's Rosengren says U.S. labor markets could stagnate until vaccine is widely available
The U.S. economy could face significant weakness over the next couple of months until coronavirus vaccines are widely distributed, but those vaccines, combined with the increased odds for fiscal stimulus under President-elect Joe Biden, could boost the economy in the long run, Boston Federal Reserve Bank President Eric Rosengren said on Wednesday.
· CORONAVIRUS UPDATES:
Global Cases: 92.73 (+724,609)
Global Deaths: 1.98M (+15,975)
U.S. Cases: 23.59M (+219,500)
U.S. Deaths: 393,624 (+3,794)
Brazil Cases: 8.25M (+61,822)
Brazil Deaths: 206,009 (+1,283)
India Cases: 10.51M (+17,015)
Russia Cases: 3.47M (+22,850)
UK Cases: 3.21M (+47,525)
Italy Cases: 2.31M (+15,774)
Spain Cases: 2.17M (+38,869)
Germany Cases: 1.98M (+23,294)
Asian Updates:
Japan Cases: 297,315 (+5,103)
Japan Deaths: 4,145 (+51)
China Cases: 87,706 (+115)
China Deaths: 4,634
South Korea Cases: 70,212 (+561)
South Korea Deaths: 1,185 (+20)
Thailand Cases: 10,991 (+157)
Thailand Deaths: 67
· U.S. Covid deaths reach another record, as researchers find two new variants in Ohio
A record 4,327 people died from Covid-19 in the U.S. on Tuesday, marking the deadliest day of the pandemic so far as the federal government tries to speed up the rollout of lifesaving vaccines. It comes as researchers in Ohio say they have found two new variants that likely originated in the U.S.
The new record is the second time in the last week that Covid-19 deaths have exceeded 4,000 in one day. It also pushes the nation’s weekly average of deaths per day to 3,342 — a 26% increase compared with a week ago, according to a CNBC analysis of data compiled by Johns Hopkins University.
So far, 34,804 people have died in January, on track to become the deadliest month of the pandemic in the United States. Medical experts say the nation is now in its post-holiday surge, and the situation will likely worsen before it improves.
Like the strain first detected in the U.K., the U.S. mutations appear to make Covid-19 more contagious but are not expected to diminish the effectiveness of the vaccines, researchers said.
· Moderna CEO says the world will have to live with Covid ‘forever’
The CEO of Covid-19 vaccine maker Moderna warned Wednesday that the coronavirus that has brought world economies to a standstill and overwhelmed hospitals will be around “forever.”
Public health officials and infectious disease experts have said there is a high likelihood that Covid-19 will become an endemic disease, meaning it will become present in communities at all times, though likely at lower levels than it is now.
Moderna CEO Stephane Bancel appeared to agree Wednesday that Covid-19 will become endemic, saying “SARS-CoV-2 is not going away.”
· COVID-19 infection gives some immunity for at least five months, UK study finds
· U.S. bans imports of all cotton, tomato products from China's Xinjiang region
· UK clamps down on Xinjiang labor camps, accusing China of ‘torture’ and ‘barbarism’
· Italy’s government in crisis after former PM pulls support for ruling coalition
Reference: CNBC, Reuters, Worldometers
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