Gold flat as Thanksgiving Holiday
· Spot gold, which is often sought during times of uncertainty, was little changed at $1,809.51 per ounce following a 0.3% gain on Thursday.
· Trading was expected to be thinned by the U.S. Thanksgiving holiday.
· "We've had a relatively soft dollar and it hasn't given that much of a lift to gold during the decline. Now it's giving a little bit of a tailwind, giving it a lift back towards $1,860," said independent analyst Ross Norman.
· "(Gold) has found its floor and there's some evidence of good buying at these lower levels. The lower price has stimulated good physical buying in the (Asian) markets."
"Persistently high numbers of new corona cases and extended lockdowns in many countries are increasing the need for further support in the form of monetary and fiscal policy. A vaccine will offer no quick-fix in that sense," said Commerzbank analyst Carsten Fritsch in a note.
"New stimulus measures are therefore likely to be set in motion in the near future, which should benefit gold. In this environment, gold is initially likely to trend sideways in a corridor of between $1,800 and $1,850."
· “The (jobs) data clearly highlighted the divergence between positivity driven by the vaccine and the near-term COVID-19 issue,” said Stephen Innes, chief global market strategist at financial services firm Axi, noting that the report also boosted the chances for further stimulus.
“The vaccine narrative has watered down gold’s appeal immensely and it will continue too until we finally move from a deflationary world into an inflationary world,” Innes added.
· The United States recorded 2.3 million new coronavirus infections in the past two weeks, while soaring cases prompted a lockdown extension in Germany.
· U.S. Federal Reserve policymakers discussed how the central bank’s asset purchases could be adjusted to provide more support to markets, with some Federal Open Market Committee participants expecting the Fed to eventually lengthen the maturity of the bonds purchased.
“With the widespread distribution of a coronavirus vaccine unlikely before H2 2021, central banks are likely to remain accommodative,” ANZ analysts said in a note.
The bank kept its 12-month target of $2,100 per ounce for gold, saying accommodative central bank policy and dollar weakness meant gold was well supported with a low likelihood of a bear market.
Gold is seen as a hedge against inflation likely to result from large stimulus.
· CORONAVIRUS UPDATES:
Global cases: 61.29M (+539,885)
Global deaths: 1.43M (+10,953)
U.S. cases: 13.24M (+107,146)
U.S. deaths: 269,555 (+1,306)
U.S. hospitalizations for COVID-19 are at a record and experts warn that Thanksgiving could lead to further infections and deaths.
· More than 20 million people across England will be forced to live under the toughest restrictions even after a national lockdown ends on Dec. 2. Partial lockdowns in some European countries have also raised concern about economic growth.
The European Central Bank’s chief economist highlighted these concerns in dovish comments on Thursday, which pushed European bond yields lower.
The euro, which last bought $1.1910, showed little reaction because currency traders have largely priced in expectations for additional ECB easing next month.
· Dollar losses put on hold but long-term outlook tilts to downside
The dollar’s fall has been so rapid that it could rebound in the short term, market watchers said, but some investors still expect a decline over the longer term as they shift positions in expectation that the coronavirus outbreak will wane next year.
The dollar index was near its lowest in more than two months, but moves were subdued due to the U.S. trading holiday.
“A China-led recovery in the global economy and commodities should benefit commodities currencies,” said Masafumi Yamamoto, chief currency strategist at Mizuho Securities in Tokyo.
“The outlook is good, but we are reaching levels where authorities might feel some concern. Other emerging market currencies with good fundamentals should benefit.”
Investors have rushed to riskier currencies and emerging-market assets in recent weeks after positive data on Covid-19 vaccine efficacy and signs of stability in U.S. politics, which has weighed broadly on the dollar.
Some economists said more job losses are likely as many U.S. states reinforce restrictions on businesses to curb a spread of coronavirus infections.
· Bitcoin plunges by nearly $3,000 after closing in on its all-time record
Bitcoin has plunged by close to $3,000 in less than 24 hours after hitting highs not seen since the end of 2017.
The price of bitcoin was trading at $19,374 at 1:45 p.m. London time Wednesday when it began its slide. The losses accelerated overnight, with the price falling from $18,824 at 2 a.m. Thursday to $16,857 by 9 a.m., according to data from industry site CoinDesk.
· U.S. crude dipped 1.71% to $44.93 a barrel.
Fuel demand is falling due to renewed coronavirus lockdowns, but some oil producers are not complying with agreed production cuts, which raises concerns about oversupply.
· AstraZeneca and Oxford defend Covid vaccine trials after questions raised in the U.S.
AstraZeneca and the University of Oxford are defending the results and methods used in their phase three vaccine trials on the back of criticism from experts in the U.S., stressing the “highest standards” were used and that “additional analysis will be conducted.”
AstraZeneca shares are down by around 6% this week after questions were raised over its vaccine candidate, for which the company said combined results revealed it to be 70% effective. The figure came from combining a smaller group of people who received an unintentionally lower dose of the vaccine — and by what a company spokesperson has called “serendipity” — produced 90% effectiveness, and a larger group who received a higher dosage, showing only 62% effectiveness.
Pascal Soriot, CEO of AstraZeneca, confirmed to Bloomberg on Thursday the British pharmaceutical giant was likely to run an additional global trial to evaluate the efficacy of its Covid-19 vaccine.
Chief of the White House’s Operation Warp Speed, Moncef Slaoui, and others in the U.S. have expressed concern over the age group tested, saying 90% efficacy was only shown for the lowest risk group, which numbered 2,741 people below the age of 55. The group whose results displayed 62% effectiveness numbered 8,895.
AstraZeneca pushed back against the criticism, emphasizing monitoring of the study by the external Data Safety Monitoring Board (DSMB) and the fact that the data released Monday constituted mere interim results and that more data would follow.
· Top UK scientific adviser says AstraZeneca vaccine works
The British government’s Chief Scientific Adviser Patrick Vallance said on Thursday the main point about the AstraZeneca vaccine against COVID-19 was that it worked, when asked about doubts that have been raised about the vaccine.
· AstraZeneca says working with regulators on best approach to lower dose regimen
AstraZeneca is working with regulators to investigate a lower dosage of its vaccine that performed better than a full dosage, a spokesman for the company said, after its chief executive was quoted as saying an additional global trial was likely.
· Russia's Sputnik V developers call on AstraZeneca to try combining vaccines
Developers of the Sputnik V COVID-19 vaccine said on Thursday that AstraZeneca should try combining its experimental shot with the Russian one to boost efficacy.
Russia said its Sputnik V vaccine is 92% effective at protecting people from COVID-19, according to interim trial results, while AstraZeneca said its COVID-19 vaccine was 70% effective in pivotal trials and could be up to 90% effective.
· Deutsche Bank bullish about the 2021 economic recovery — but there are two key risks
The house view is for global GDP to contract by 3.7% in 2020 with the U.S. economy shrinking by 3.6%, the euro zone seeing a contraction of 7.4% and China growing 2.2%.
In 2021, Deutsche Bank forecasts that the U.S. economy will grow 4%, the euro zone economy will rebound by 5.6% and China’s economy will gain 9.5%.
Two key risks
The German lender warned there are two key risks that could overcloud this scenario, however.
The first risk is the challenges posed by flattening the virus curve as winter sets in and possible delays in vaccine production, distribution and acceptance by the public — given the rise of anti-vaccination movements and mis-information in recent years.
The second key risk emanates from possible financial disruption given that “central banks and fiscal authorities have taken aggressive actions, especially in the U.S. and Europe” to counter the economic crisis caused by the pandemic.
· President Donald Trump says he will leave White House if Electoral College votes for Joe Biden
President Donald Trump said on Thursday he will leave the White House if the Electoral College votes for President-elect Joe Biden, the closest he has come to conceding the Nov. 3 election, even as he reiterated his unfounded claims of massive voter fraud.
Speaking to reporters on the Thanksgiving holiday, Republican Trump said if Democrat Biden — who is due to be sworn in on Jan. 20 — is certified the election winner by the Electoral College, he will depart the White House.
But Trump said it would be hard for him to concede under the current circumstances and declined to say whether he would attend Biden’s inauguration. The electors are scheduled to meet on Dec. 14.
· Euro zone to move on bailout fund reform amid COVID worries
Euro zone finance ministers are likely to push ahead next Monday with stalled changes to their ESM bailout fund to strengthen the resilience of the common currency area as the COVID-19 pandemic increases risks of future economic trouble.
Changes to the ESM treaty are intended to reduce the risk of investors holding out for a better deal in any sovereign debt restructuring and give the bailout fund room to mediate between the sovereign and investors.
· Barnier to talk to some EU fisheries ministers on Friday on UK trade deal
The European Union’s chief negotiator on a trade deal with Britain Michel Barnier will talk on Friday with some of the bloc’s ministers responsible for fisheries to discuss the state of play in the trade discussions, an EU official said.
France, Germany, Denmark, Spain, Belgium, Ireland and the Netherlands are likely to take part in the meeting.
· UK says on Brexit trade deal: We can get there but not at any cost
Britain and the European Union can clinch a Brexit trade deal and the shape of one is clear but London will not sign up to an accord at any cost, Prime Minister Boris Johnson’s finance minister said on Thursday.
· EU warns decision on UK financial services won't come before January 1
Britain and the European Union can clinch a Brexit trade deal and the shape of one is clear but London will not sign up to an accord at any cost, Prime Minister Boris Johnson’s finance minister said on Thursday.
· European markets close flat with Wall Street closed; AstraZeneca shares edge lower
The Europe Stoxx 600 index ended 0.03% lower provisionally.
U.S. financial markets were closed Thursday due to the Thanksgiving holiday so trading volumes were low.
· Asian shares grind lower amid vaccine doubts, economic concern
Asian shares fell slightly on Friday, pulling back from a record high hit earlier this week, amid renewed doubts about a highly-anticipated coronavirus vaccine and concern about the economic impact from the pandemic.
MSCI’s broadest index of Asia-Pacific shares outside Japan fell 0.07%. Australian shares were down 0.15%. Japan’s Nikkei fell 0.09%.
U.S. S&P 500 e-mini stock futures fell 0.24% in early Asian trade. U.S. financial markets were closed on Thursday for the Thanksgiving holiday and will trade on a partial schedule later on Friday.
Oil prices looked set to extend their declines from a seven-month high due to signs of oversupply.
British drugmaker AstraZeneca’s coronavirus drug was touted as a “vaccine for the world” due to its inexpensive cost, but the efficacy of the vaccine is now facing more intense scrutiny, which experts say could delay its approval.
Several scientists have raised doubts about the robustness of results showing the shot was 90% effective in a sub-group of trial participants who, by error initially, received a half dose followed by a full dose.
MSCI’s broadest gauge of world stocks was up 0.02% on Friday in Asia, sitting just below a record high reached in the previous session.
Doubts about the distribution of a coronavirus vaccine have placed renewed focus on the current state of the pandemic, which looks grim for many places.
Reference: CNBC, Reuters, Worldometers
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