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Gold firms on weaker dollar as investors gauge Yellen’s views

 

·         Gold held on to gains on Tuesday as the dollar remained under pressure, with prospects for more stimulus buoying bullion’s appeal as an inflation hedge.

 

·         Spot gold was up 0.2% at $1,840.38 per ounce, recovering from its lowest since Dec. 2 at $1,809.90 hit on Monday. U.S. gold futures settled up 0.6% to $1,840.20.

 

·         The value of the U.S. dollar should be determined by markets, Janet Yellen told Senate lawmakers at her confirmation hearing on Tuesday. Yellen also reaffirmed her commitment to relief measures and underlined the depth of the economic crisis.

 

·         Gold is considered a hedge against inflation and currency debasement that can result from widespread stimulus.

 

·         The dollar is “going to be driven by market forces and for the time being, market forces are pointing to a lower dollar,” said Daniel Ghali, commodity strategist at TD Securities.

 

The dollar index slipped from a four-week high hit in the last session, making bullion cheaper for holders of other currencies.

 

·         “As long as we get this momentum (in equities) on the upside, it makes gold prices relatively trade within a range,” said Jeffrey Sica, founder of Circle Squared Alternative Investments, adding the likelihood of more stimulus was very positive for gold.

 

·         “Global central bank members are cognizant that even though equity markets are doing well, the underlying economy is still very weak and stimulus measures are needed,” said Michael Langford, director at corporate advisory AirGuide.

·         Investors also await U.S. President-elect Joe Biden’s inauguration on Wednesday, and security measures have been stepped up in the light of the Jan. 6 attack on the U.S. Capitol.

 

·         Silver eased 0.4% to $25.22 an ounce, platinum gained 0.2% to $1,081.40 and palladium was down 0.2% at $2,366.08.

·         Treasury nominee Yellen says U.S. can afford higher corporate tax rate if it coordinates with other countries

Janet Yellen, President-elect Joe Biden’s choice for Treasury secretary, testified Tuesday that the U.S. could afford a higher corporate tax rate if it coordinates with other economies around the globe.

“We look forward to actively working with other countries through the [Organization for Economic Cooperation and Development] negotiations on taxes on multinational corporations to try to stop what has been a destructive, global race to the bottom on corporate taxation,” she said in response to a question from Sen. Mike Crapo, R-Idaho.

 

·         Five key takeaways from Janet Yellen’s Treasury confirmation hearing

1. Higher taxes are coming, but not now

2. ‘Fiscal sanity,’ but also not now

3. Still tough on China

4. Backing the buck

5. More stimulus

 

·         CORONAVIRUS UPDATES:

 

Global Cases: 96.58 (+573,072)

Global Deaths: 2.06M (+14,497)

No. 1

U.S. Cases: 24.79M (+162,518)

U.S. Deaths: 411,361 (+2,643)

 

No. 2 -6

India Cases: 10.59M (+13,581)

Brazil Cases: 8.57M (+63,504)

Russia Cases: 3.61M (+21,734)

UK Cases: 3.46M (+33,355)

France Cases: 2.93 (+23,608)

 

Asian Updates:

No. 39

Japan Cases: 334,328 (+6,034)
Japan Deaths: 4,548 (+47)

 

No. 70

Myanmar Cases: 135,243 (+448)
Myanmar Deaths: 2,986 (+13)

 

No. 83

China Cases: 88,454 (+118)
China Deaths: 4,635

 

No. 86

South Korea Cases: 73,115 (+386)
South Korea Deaths: 1,283 (+19)

 

No. 128

Thailand Cases: 12,594 (+171)
Thailand Deaths: 70

 

 

·         Germany discovers new Covid variant among 35 hospital patients

Germany is the latest country to discover a new mutation of the coronavirus, with a new variant identified among a group of hospital patients in Bavaria.

Local news outlets first reported on Monday that an unknown variant of the coronavirus had been discovered among 35 patients at a hospital in the Bavarian ski town of Garmisch-Partenkirchen, southeast Germany.

The altered virus was found in 35 of 73 newly-infected people in the hospital, Bavarian news outlet BR24 reported Monday. Samples are now reportedly being examined at the Charité university hospital in Berlin.

 

·         Lockdowns caused by China’s new Covid-19 outbreak are sparking concerns over steel, iron ore

A new wave of Covid-19 cases in China’s Hebei province triggered transport restrictions in the major steel-producing region.

The lockdowns in Hebei include areas surrounding steel mills, limiting the ability to transport the metal to customers. China is the world’s top steel producer and analysts say Hebei contributes over 20% of the country’s total output.

 

·         Inconsistent supply is biggest challenge to Covid vaccine rollout, says NJ hospital CEO

 

·         Biden’s incoming CDC director says she’s ‘optimistic’ Covid vaccines will work against new variants

The coronavirus vaccines currently on the market should still work against new, more infectious variants discovered in recent months, although they may not be as effective, the incoming director of the Centers for Disease Control and Prevention said Tuesday.

A handful of new strains of the coronavirus have emerged that have given scientists some cause for concern. While it’s no surprise the virus is mutating, researchers are quickly trying to determine what the changes might mean for recently developed lifesaving vaccines and therapeutics against the disease.

The currently deployed vaccines have proven to be so effective in clinical trials, the new variants likely won’t make them completely ineffective, Dr. Rochelle Walensky, President-elect Joe Biden’s pick to lead the CDC, told the JAMA Network. Vaccines from both Pfizer and Moderna have shown to be roughly 95% effective in preventing Covid-19 in large clinical trials.

However, the new strains might cause a dip in how well the vaccines perform outside of those trials. Researchers don’t yet know whether the vaccines will remain in the highly effective 95% range, or if they’ll fall to somewhere around 70%, Walensky said.

 

·         Biden won’t lift Europe, Brazil travel restrictions despite Trump order, spokeswoman says

 

·         Boris Johnson aiming for close ties with Biden

 

 

·         YouTube extends Trump suspension for another week

 

·         Trump seeks to curb foreign cyber meddling on last day in office

 

·         U.S. secretary of state nominee Blinken sees strong foundation for bipartisan China policy

 

Biden's top diplomat Blinken says he aims to revitalize alliances, U.S. leadership

U.S. President-elect Joe Biden’s nominee to be secretary of state, Antony Blinken, said on Tuesday that he will work to revitalize damaged American diplomacy and build a united front to counter the challenges posed by Russia, China and Iran.

Blinken says U.S. plans full review of approach to North Korea

 

·         Biden will seek to extend New START treaty, unclear for how long

 

·         U.S. Senate panel to hold Jan. 26 hearing on Biden Commerce nominee

The U.S. Senate Commerce Committee will consider President-elect Joe Biden’s nomination of Rhode Island Governor Gina Raimondo to head the Commerce Department in a hearing on Jan. 26.

 

·         Cuomo proposal would raise top tax rate for New York City to 14.7%, highest combined rate in nation

New York Gov. Andrew Cuomo proposed raising taxes on the wealthy to a combined level of 14.7%, which would be the highest state-and-local tax rate in the nation.

The tax increase would raise $1.5 billion for the state, Cuomo said Tuesday in an address unveiling his 2022 budget proposal.

The move would be part of a three-pronged approach — raising revenue, cutting expenses and borrowing — to cover the state’s historic budget shortfall due to Covid-19, Cuomo said.

“New York cannot manage a $15 billion deficit,” according to Cuomo, who said the state’s largest prior deficit was $10 billion. “It’s beyond what we can do.”

The state would raise the top tax rate to 10.86%, up from 8.82%, Cuomo said. That would yield a top rate of 14.7% for the wealthiest New York City residents in combined taxes.

″[It] would be the highest income tax in the nation,” Cuomo said.

 

·         U.S. imposes sanctions on Russian vessel involved with Nord Stream 2 pipeline

 

·         Italy avoids government collapse as Prime Minister Giuseppe Conte survives confidence vote

 

·         China-EU deal boosts Beijing’s goals to stay in global tech scene but rely on the U.S. less, professor says

 

 

·         China’s shift from coal helped push natural gas prices to a peak, Eurasia Group says

 

·         Bitcoin and U.S. tech stocks are the biggest market bubbles right now, investors say

The vast majority of investors (89%) think some financial markets are in bubble territory, according to a Deutsche Bank survey.

Bitcoin is viewed as a more extreme case, with half of respondents giving the cryptocurrency a rating of 10 on a 1-10 bubble scale.

Investors think bitcoin and Tesla are more likely to halve in value than double over the next 12 months, according to Deutsche.

 

Reference: CNBC, Reuters, Worldometers