Gold slumps over 2% as vaccines spark economic optimism
· Gold retreated more than 2% on Wednesday as optimism driven by more progress on the COVID-19 vaccine front bolstered hopes for a smoother economic recovery.
· Spot gold was down 2.4% at $1,827.26 per ounce. On Tuesday, gold hit its highest since Nov. 23 at $1,875.07. U.S. gold futures settled down 1.9% at $1,838.50.
· “There is the anticipation that some of the chaos that has resulted from the pandemic is going to subside (now that) they are beginning to disperse the vaccine in some parts of the world,” said Jeffrey Sica, founder of Circle Squared Alternative Investments.
· Canada on Wednesday approved Pfizer and BioNTech’s COVID-19 vaccine, a day after Britain became the first Western nation to start a mass vaccination drive.
· Gold was also pressured by an uptick in the dollar.
But the metal, considered a hedge against potential inflation, was still up more than 20% for the year, underpinned by hopes of more fiscal stimulus.
With the pandemic roaring back to levels surpassing those seen early in the crisis, lawmakers in the United States made attempts to hammer out an agreement on a new fiscal support package.
· Liquidation of gold exchange traded funds posed the biggest threat to gold prices, and central demand has been weaker, HSBC analyst James Steel said in a note, cutting the bank’s 2021 price forecast by 3% to $1,907.
But while gold’s rally has been blunted by the vaccine news, bullion remains supported by accommodative monetary and fiscal policies and geopolitical risks, the bank added.
· Investors are now awaiting on policy cues from the U.S. Federal Reserve’s two-day meeting next week.
· A dovish FOMC should “relight the gold rally,” said Jeffrey Halley, a senior market analyst at OANDA.
· Silver slipped 3.8% to $23.64 per ounce, platinum fell 2.9% to $993.23 and palladium was down 1.3% at $2,280.92.
· CORONAVIRUS UPDATES:
Global Case: 69.20M (+634,772)
Global Deaths: 1.57M (+12,138)
U.S. Case: 15.81M (+219,935)
U.S. Deaths: 296,616 (+3,160)
· House votes to fund government for a week amid rush to strike spending, Covid relief deals
The measure, which passed in a 343-67 vote, would keep the federal government running through Dec. 18. Many operations will shut down amid the raging pandemic if lawmakers fail to approve a funding bill before Saturday.
The legislation heads to the Senate, where Majority Leader Mitch McConnell, R-Ky., has indicated he aims to pass it before the deadline. The Senate could try to approve it as soon as Thursday.
Democratic leaders have called bipartisan talks toward a $908 billion relief bill the best chance to craft a plan that can get through a divided Congress. Lawmakers have not yet finalized the legislation because of disagreements over legal immunity for businesses and state and local government relief.
Top Republicans have accused their counterparts of refusing to make a deal. House Speaker Nancy Pelosi, D-Calif., and Senate Minority Leader Chuck Schumer, D-N.Y., rejected a $916 billion offer from the Trump administration because it included a one-time $600 direct payment but no federal unemployment insurance supplement. The bipartisan package includes a $300 weekly boost to jobless benefits.
· Oxford-AstraZeneca Covid vaccine to immunize the planet ‘more effectively,’ Lancet editor says
The Oxford-AstraZeneca coronavirus vaccine has a “distinct comparative advantage” over other leading candidates, the editor-in-chief of The Lancet medical journal said Wednesday.
The data also suggested that the vaccine can help reduce the spread of Covid-19, as well as preventing illness and death.
Horton said it is important to think about vaccine immunization on a global scale “because even if we immunize one country, the threat then is you reintroduce the virus from another country that is not protected.”
“That means that you need a vaccine that can get to lower middle-income countries,” Horton said. He added it was “not practicable” to launch a global vaccination campaign with storage needs of minus 70 degrees Celsius (minus 94 degrees Fahrenheit), apparently referring to the Pfizer-BioNTech vaccine.
The Oxford-AstraZeneca vaccine can be stored at regular refrigerator temperature. It is also cheaper than its peers, thought to cost around $4 per dose.
Pfizer-BioNTech is reportedly charging around $20 per dose for its coronavirus vaccine. Moderna has said it is charging $32 to $37 per dose, and Johnson & Johnson has said its candidate will cost around $10 per dose.
· FDA will likely scrutinize allergic reactions to Pfizer’s Covid vaccine in UK before clearing use in U.S., Trump vaccine chief says
The two allergic reactions reported by U.K. health-care workers vaccinated against Covid-19 will likely be scrutinized by the Food and Drug Administration as it decides whether to authorize Pfizer’s vaccine in the U.S. — though the incident shouldn’t be surprising, medical experts said on Wednesday.
The U.K’s Medicines and Healthcare products Regulatory Agency updated its guidance on Wednesday to advise people who have a history of “significant” allergic reactions to forgo the vaccine developed by Pfizer and BioNTech. The updated guidance came after two members of Britain’s National Health Service experienced allergic reactions to the shot, though both are recovering well, according to the national medical director for the NHS.
“We know from the extensive clinical trials that this was not a feature, but if we need to strengthen our advice now that we have had this experience in vulnerable populations, the groups selected as a priority, we get that advice to the field immediately,” Dr. June Raine, head of the MHRA, told a U.K. government select committee on Wednesday.
While the Food and Drug Administration will likely review the events in the U.K. before authorizing Pfizer’s vaccine in the U.S., it’s not unusual that people with severe allergic reactions to vaccines aren’t included in clinical trials, said Moncef Slaoui, chief science advisor for the White House’s Operation Warp Speed, said during a press briefing on Wednesday.
The FDA is set to convene a meeting of its Vaccines and Related Biological Products Advisory Committee, or VRBPAC, on Thursday to review Pfizer’s Covid-19 vaccine for emergency use authorization in the United States. If the meeting goes well and the committee votes to approve the vaccine, the FDA could announce its authorization “within days,” Health and Human Services Secretary Alex Azar told ABC News’ “This Week” on Sunday.
· Turkey refutes report it ruled out Russia's COVID-19 vaccine, says could use if meets criteria
Turkey is ready to procure Russia’s coronavirus vaccine if it meets Ankara’s criteria, Health Minister Fahrettin Koca said on Wednesday, refuting an earlier media report that cited him as ruling it out.
“If (tests) are successful, there is no problem in procuring the vaccine produced in Russia,” Koca told a news conference following a meeting of the government’s science team.
· U.S. job openings rise, but labor market slowing
U.S. job openings increased in October, but many of the help wanted signs could disappear amid widespread restrictions on businesses to slow rapidly spreading new COVID-19 infections.
Job openings, a measure of labor demand, increased 158,000 to 6.65 million on the last day of October. Vacancies are below their 7 million level in February. There were increases in job openings in the healthcare and social assistance industry.
The overall job openings rate edged up to 4.5% from 4.4% in September. Hiring dipped to 5.81 million in October from 5.89 million in the prior month. That lowered the hiring rate to 4.1% from 4.2% in September.
Layoffs increased 243,000 to 1.7 million. That included 91,000 layoffs in the federal government, largely due to the departure of the temporary Census workers. The layoffs rate rose to 1.2% from 1.0% in September.
U.S. financial markets were unmoved by the data.
· 17 states tell Supreme Court they support Texas bid to reverse Biden win
· UK-EU leaders set Sunday deadline for Brexit talks, after meeting fails to break the deadlock
· UK’s Boris Johnson in Brussels for last-ditch attempt to avoid a no-deal Brexit
Johnson is having a working dinner with European Commission President Ursula von der Leyen, which started 8 p.m. local time, in an attempt to find political solutions to three outstanding issues in the trade talks: fisheries, competition rules and arbitration over their potential new deal. Negotiators have been stuck on these three areas since early in the summer.
Before leaving for the Belgian capital, Johnson tweeted that a “good deal is still there to be done.”
· ECB set to raise stimulus to help businesses bridge gap until economy recovers
Analysts view action at Thursday's meeting as all but certain. ECB President Christine Lagarde said at the Oct. 28 meeting that there was little doubt that the 25-member governing council would conduct a recalibration of existing stimulus programs at the December meeting. She subsequently pointed to the current, 1.35 trillion ($1.58 trillion) pandemic emergency bond purchase program as a likely place for action. Analysts think the council could add 500 billion euros or more to the purchases, and extend their duration to the end of 2021 or to mid-2022. Currently the purchases are slated to run until mid-2021, or until the end of the COVID-19 crisis phase, whichever comes first.
· Hungary declares ‘victory’ in EU budget row on eve of summit
Hungary’s foreign minister declared victory on Wednesday in a row over linking European Union funds to rule-of-law standards, as Budapest and Warsaw appeared to be edging toward an agreement to unblock an EU financial package.
Poland and Hungary have been blocking the 1.8 trillion euro ($2.18 trillion) 2021-2027 EU budget and coronavirus recovery fund drawn up for the 27 member states because their nationalist governments oppose a clause linking the release of funds to rule-of-law standards.
· Bank of Canada keeps key rate at 0.25%, maintains QE policy
· Facebook hopes the cryptocurrency it backs will launch in 2021, top exec says
Facebook should be given the “benefit of the doubt” by regulators in its ambitions to launch the cryptocurrency it backs and its digital wallet, the head of the company’s financial services arm said on Monday.
David Marcus, the head of Facebook Financial, also known as F2, said he hopes both the cryptocurrency called Diem and the social networking firm’s wallet Novi will launch next year.
· Iran blacklists U.S. envoy in Yemen, reciprocating U.S. move
Iran has blacklisted the U.S. ambassador in Yemen, the Iranian foreign ministry said on Wednesday, a day after Washington imposed terrorism-related sanctions on Tehran’s envoy to the Yemeni Houthis.
Tehran’s move, which allows the seizure of assets within Iran of sanctioned individuals, is symbolic and unlikely to have any impact on the U.S. ambassador.
Reference: CNBC, Reuters, Wordometers
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