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Gold pares gains as the dollar edges higher

·         Gold prices pared gains on Monday as the dollar edged higher, but expectations of fresh U.S. fiscal stimulus underpinned the bullion ahead of this week’s Federal Reserve’s meeting.

·         Spot gold was up 0.1% at $1,854.81, after rising as much as 0.8%. U.S. gold futures settled 0.1% lower to $1,855.20 per ounce.

·         The dollar was up 0.2%, making bullion more expensive for holders of other currencies.

·         “We’re starting to get early indications that the dollar index has hit a near-term bottom. If that’s the case, a rising dollar would work against the precious market bulls,” said Kitco Metals senior analyst Jim Wyckoff.

·         “The prospect of inflation down the road given all the stimulus and central bank easing that has made the world financial system awash in cash, that’s supportive (for gold) on a longer term basis.”

·         U.S. President Joe Biden’s administration countered concerns about the $1.9 trillion pandemic relief proposal being too expensive and underlined the need to act swiftly.

·         “We’re going to see the underpinnings of support in this market, whether that support comes from a dovish Fed or ongoing stimulus measures is the main focal point for this market over the next several months,” said David Meger, director of metals trading at High Ridge Futures.

·         The Federal Reserve’s two-day policy meeting starts on Tuesday. The U.S. central bank’s policy is expected to remain firmly in rescue mode, with interest rates pinned near zero.

·         Lower interest rates decrease the opportunity cost of holding non-yielding bullion and weigh on the dollar.

·         Silver eased 0.2% to $25.34 an ounce, platinum fell 0.2% to $1,096.40 and palladium was down 0.7% at $2,336.93.

 

·         CORONAVIRUS UPDATES:

Global Cases: 100.25 (+430,876)

Global Deaths: 2.14M (+9,301)

 

No. 1

U.S. Cases: 25.84M (+136,866)
U.S. Deaths: 431,216 (+1,720)

 

No. 2 -6

India Cases: 10.67M (+9,036)

Brazil Cases: 8.87M (28,364)

Russia Cases: 3.73M (+19,290)

UK Cases: 3.66M (+22,195)

France Cases: 3.05 (+4,240)

Asian Updates:

No. 38

Japan Cases: 364,813 (+4,152)
Japan Deaths: 5,084 (+65)

No. 71

Myanmar Cases: 137,957 (+383)
Myanmar Deaths: 3,069 (+7)

No. 83

China Cases: 89,115 (+124)
China Deaths: 4,635

No. 86

South Korea Cases: 75,521 (+437)
South Korea Deaths: 1,360 (+11)

No. 126

Thailand Cases: 13,687 (+187)
Thailand Deaths: 75 (+2)

 

·         President Joe Biden targets 1.5 million Covid vaccinations a day, up from 1 million

President Joe Biden said Monday the United States could reach 1.5 million Covid-19 vaccinations per day, topping his previously targeted pace of 1 million per day, which was nearly met already by the Trump administration.

Biden has pledged to administer 100 million shots of coronavirus vaccine in his first 100 days in office, a pace of 1 million shots per day.

“That is my promise, that we would get 100 million vaccinations,” he said Monday. “I think with the grace of God and the good will of the neighbor and the crick not rising, as the old saying goes, I think we may be able to get that to 1.5 million a day, rather than 1 million a day, but we have to meet that goal of a million a day.”

 

·         Biden says he is open to negotiating the proposed $1,400 COVID stimulus checks

U.S. President Joe Biden said on Monday that he is open to negotiating the eligibility requirements of his proposed $1,400 COVID stimulus check, a nod to lawmakers who have said they should be more targeted to lower-incomes.

 

The previous round of stimulus checks, including the $600-per-person check approved in December, was generally limited to individuals earning less than $75,000 a year and married couples earning less than $150,000.

 

·         Minnesota confirms first known U.S. case of more contagious Covid variant originally found in Brazil

 

·         Moderna says it’s working on Covid booster shot for variant in South Africa, says current vaccine provides some protection

The two-dose vaccine produced an antibody response against multiple variants, including B.1.1.7 and B.1.351, which were first identified in the U.K. and South Africa, respectively, according to a Moderna study conducted in collaboration with the National Institute of Allergy and Infectious Diseases. The study has not yet been peer reviewed.

Moderna says it believes vaccine will work against new variants

·         Biden bans most non-U.S. citizens from South Africa, extends Europe, UK and Brazil restrictions to curb Covid

·         COVID-19 vaccine developer CureVac plans five million share sale

German biotech firm CureVac plans to sell 5 million shares in a secondary offering, the company said on Monday, as it starts late-stage trials of its COVID-19 vaccine candidate.

The proceeds will be used to fund its messenger RNA-vaccine program and expand its in-house manufacturing capacities, the company said.

Earlier this month, CureVac struck an alliance with drugmaker Bayer AG to help develop its experimental COVID-19 vaccine.

CureVac’s shares fell 3.3% to $101.01 in extended trading on Monday.

The Nasdaq-listed company, which is backed by investors Dietmar Hopp, the Gates Foundation and GlaxoSmithKline as well as the German government, has said it aims to produce up to 300 million doses of the vaccine in 2021 and up to 600 million in 2022.

 

·         Janet Yellen gets Senate confirmation as first woman to lead the Treasury Department

Janet Yellen cleared her final hurdle Monday on her historic path to secretary of the Treasury Department, gaining overwhelming Senate confirmation for the position.

The 84-15 vote made Yellen the first female to the lead the department, a feat she matched as chair of the Federal Reserve.

 

·         US Fed holds first policy meeting of Biden administration

These challenges could be discussed when the Fed's policy-setting Federal Open Market Committee (FOMC) opens its first two-day policy meeting of the year on Tuesday.

The initial rollout of Covid-19 vaccines has raised hopes companies will be able to open for business and shoppers will open their wallets, improving the economy's prospects.

But the historic nature of the job losses during the pandemic -- more than 10 million US workers remain unemployed -- coupled with the likelihood inflation in some sectors could spike once the recovery takes hold, will test the Federal Reserve's limited toolkit.

 

·         ECB's Lagarde says economic recovery delayed not derailed

The euro zone’s economic recovery has simply been delayed, not delayed by fresh anti-pandemic restrictions and uncertainty surrounding vaccinations, European Central Bank President Christine Lagarde said on Monday.

“The journey seems to be a little bit delayed but should not be derailed,” Lagarde said.

Stimulus remains

The latest ECB economic data points to a contraction in the final quarter of 2020, which, according to Lagarde “will have an impact in the first quarter of 2021.”

In December, the ECB estimated a 3.9% GDP rate for 2021, and 2.1% for 2022, but these forecasts are heavily dependent on how the pandemic evolves and how fast citizens can be vaccinated.

Even when the European region reaches a point when its economies are able to reopen fully, there will be further challenges to ensure there’s solid economic growth. “It is not the same economy that we are talking about,” Lagarde added.

Lagarde Says ‘No Doubt’ ECB Will Preserve Financing Conditions

·         House delivers Trump impeachment article to Senate, setting stage for trial

Senators will not start to hear the case against Trump for another two weeks. The chamber reached an agreement where the trial will start in earnest the week of Feb. 8, giving the Senate time to confirm more of President Joe Biden’s Cabinet.

 

·         China’s Xi calls for unity in first remarks of Biden era, warns against ‘arrogant isolation’

Chinese President Xi Jinping on Monday urged the international community to put their differences to one side, warning that history has shown countries that choose to go it alone “will always fail.”

 

·         'Together we are stronger' - Germany bets on better U.S. ties under Biden

 

Reference: CNBC, Worldometers, Reuters, Bloomberg