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Gold hits more than 1-week low on doubts over stimulus bill, Fed keeps rates near zero

·         Gold prices fell to a more than one-week low on Wednesday, pressured by concerns over the U.S. stimulus bill and strength in the dollar after the Federal Reserve left interest rates unchanged.

·         Spot gold fell 0.36% to $1,844.61 per ounce, having earlier touched its lowest since Jan. 18. U.S. gold futures settled down 0.6% at $1,844.90.

·         The dollar rebounded to a more than one-week high against rivals, making gold costlier for investors holding other currencies.

·         “The $1.9 trillion (U.S. stimulus) was pretty ambitious and I don’t think (President) Biden has the support to pass it,” Haberkorn added. “That is another reason why gold is not trying to get back above $1,900.” The Biden administration’s stimulus plan faced strong opposition from Republicans over the size of the package.

·         Consistent with market expectations, the policymaking Federal Open Market Committee said Wednesday it was keeping its benchmark short-term borrowing rate anchored near zero and maintaining an asset purchasing program that is seeing the Fed buy at least $120 billion a month.

·         “To drive gold towards the upper end of the (narrow) range, (the Fed) will need to adopt a fairly dovish tone, which will push U.S. 10-year yields back below 1% - that will help gold,” CMC Markets UK’s chief market analyst Michael Hewson said.

·         Easy monetary policy tends to weigh on government bond yields, increasing the appeal of non-yielding gold.

·         Silver fell 0.4% to $25.35 an ounce. Platinum shed 2.3% to $1,072.57, having touched its lowest since Jan. 12 at $1,056.70.

·         Palladium fell 0.9% to $2,304.39 per ounce, having fallen to its lowest since Dec. 21 at $2,292.90 earlier in the session.

·         Federal Reserve leaves interest rates and asset purchases unchanged, sees growth slowing

The Federal Reserve kept its foot to the floor Wednesday in terms of the help it is providing for an economy that central bank officials say has slowed down.

Consistent with market expectations, the policymaking Federal Open Market Committee said it was keeping its benchmark short-term borrowing rate anchored near zero and maintaining an asset purchasing program that is seeing the Fed buy at least $120 billion a month.

The decision means that the fed funds rate, which serves as a benchmark for a variety of consumer debt instruments, will remain anchored in a range between 0% and 0.25% and most recently was trading at 0.08%.

 

·         Fed Chair Powell says nothing is more important for the economy than vaccinations

Federal Reserve Chair Jerome Powell said Wednesday nothing is more important for the economy than vaccinations — and that he’s gotten the first dose of a vaccine himself.

 

·         U.S. core capital goods orders rise strongly in boost to business investment

New orders for key U.S.-made capital goods increased for an eighth straight month in December, pointing to solid growth in business spending on equipment in the fourth quarter and likely helping to underpin the economic recovery.

The report from the Commerce Department on Wednesday was published ahead of the government’s snapshot of fourth-quarter gross domestic product on Thursday, expected to show a sharp slowdown in growth after a historic pace of expansion in the third quarter.

The anticipated loss of momentum will likely reflect a resurgence in COVID-19 cases and exhaustion of relief money from the government. The Federal Reserve on Wednesday left its benchmark overnight interest rate near zero and made no change to its monthly bond purchases, noting “the recovery in economic activity and employment has moderated in recent months.”

Orders for non-defense capital goods excluding aircraft, a closely watched proxy for business spending plans, rose 0.6% last month. These so-called core capital goods orders advanced 1.0% in November. Last month’s increase was in line with economists’ expectations.

Core capital goods orders surged 1.8% year-on-year in December. Demand has shifted away from services like travel and hospitality towards goods like motor vehicles, electronics and medical equipment during the COVID-19 pandemic. That has contributed to boosting production at factories, though output remains about 2.6% below its pre-pandemic level.

 

 

·         CORONAVIRUS UPDATES:

Global Cases: 101.40 (+578,773)
Global Deaths: 2.18M (+16,573)

 

No. 1

U.S. Cases: 26.16M (+148,522)
U.S. Deaths: 439,449 (+3,843)

 

No. 2 -6

India Cases: 10.70M (+11,752)

Brazil Cases: 9.00M (63,895)

Russia Cases: 3.77M (+17,741)

UK Cases: 3.71M (+25,308)

France Cases: 3.10 (+26,916)

 

No. 26
Portugal Cases:  668,951 (+15,073)
Portugal Deaths: 11,305 (+293)

 

Asian Updates:

No. 37

Japan Cases: 371,680 (+3,537)
Japan Deaths: 5,252 (+94)

 

 

No. 71

Myanmar Cases: 138,802 (+434)
Myanmar Deaths: 3,089 (+7)

 

No. 83

China Cases: 89,272 (+75)
China Deaths: 4,636

 

No. 86

South Korea Cases: 76,429 (+554)
South Korea Deaths: 1,378 (+7)

 

No. 123

Thailand Cases: 15,465 (+819)

Thailand Deaths: 76 (+1)

 

·         NY eases some restrictions; U.S. to test vaccine effectiveness on new strains

 

·         Census Bureau survey finds 51% of unvaccinated Americans would ‘definitely’ get vaccine

A new survey from the U.S. Census Bureau found that 51% of the roughly 226 million Americans who still haven’t been vaccinated “definitely” plan to receive the drug once it’s available to them, while 26% said they probably would get the shot.

The latest survey, part of the Census Bureau’s efforts to measure household experiences during the pandemic, was conducted between Jan. 6 through Jan. 18 and received 68,348 responses. About 8% of adults said they already received the vaccine.

The Census Bureau found that 9.5% of unvaccinated adults said they would “definitely not” receive a Covid-19 vaccine. Among the respondents who indicated they were uncertain about getting vaccinated, most of the concern was about potential side effects, and many said they wanted to wait and see if it’s safe.

 

·         English lockdown set to last until at least March, Johnson indicates

Prime Minister Boris Johnson indicated on Wednesday the COVID-19 lockdown in England would last until March 8 when schools could start to reopen as the government announced new measures to clamp down on travel to and from Britain.

 

·         Germany sends medical experts to Portugal as hospitals face COVID-19 crisis

 

·         EU demands AstraZeneca plan to break vaccine deadlock

 

·         AstraZeneca defends slow supplies to the EU, but says it ordered 3 months later than the UK

 

·         AstraZeneca CEO holds ‘constructive and open conversation’ with EU vaccine board

 

·         Putin warns of ‘all against all’ fight if global tensions are not resolved

President Vladimir Putin warned on Wednesday that the coronavirus pandemic has exacerbated preexisting global problems and imbalances, and that these could deteriorate to a point where there is a fight of “all against all.”

“The coronavirus pandemic has become a major challenge to mankind, and it has accelerated structural changes, the preconditions for which were already in place,” he said at a virtual meeting of the World Economic Forum.

 

·         On his first day, Secretary of State Blinken commits to rebuilding U.S. diplomacy worldwide

 

·         New U.S. secretary of state favors cooperation with China despite genocide of Uighurs

U.S. Secretary of State Antony Blinken said on Wednesday, his first full day in the job, that he favored cooperation with China on climate change and other issues of shared concern, even as he reiterated that genocide had been committed against Uighur Muslims in its Xinjiang region.

 

·         U.S. faces higher risk of domestic extremist violence after Capitol assault, says government

The United States could face a heightened threat of domestic extremist violence for weeks from people angry at Donald Trump’s election defeat and inspired by the deadly storming of the U.S. Capitol, the Department of Homeland Security warned on Wednesday.

 

·         Next round of UK, Australia trade talks set for February: source

 

·         UK car output slumps to lowest level since 1984 amid COVID hit

A total of 920,928 cars rolled off production lines in 2020, down 29% on 2019, according to the Society of Motor Manufacturers and Traders, as some plants shut for several months and many still run at below-normal levels.

 

·         IMF recommends more fiscal aid, monetary easing for South Korea to support recovery

Reference: CNBC, Reuters, Worldometers