Gold gains as dollar slips, stimulus bets grow
· Gold jumped 1% to a one-week high on Tuesday, as a sliding dollar and hopes of more U.S. fiscal stimulus bolstered its appeal among investors seeking an inflation hedge.
· Spot gold was up 0.3% to $1,835.24 per ounce, after hitting its highest since Feb. 2 at $1,848.40 earlier in the session. U.S. gold futures settled up 0.2% to $1,837.50.
· “The reflation trade is really starting to settle in,” and gold is benefiting from the dollar weakening again, and stimulus being the big focus, said Edward Moya, senior market analyst at OANDA.
Gold is “going to attract a significant amount of flows because of just the uncertainty with the global economic recovery and also, the U.S. Federal Reserve is going to be very accommodative for quite some time.” U.S. lawmakers were armed with a budget outline to push U.S.
· President Joe Biden’s $1.9 trillion COVID-19 relief package through Congress without Republican support, with the legislation likely to pass before March 15.
· Gold is considered a hedge against inflation and currency debasement likely to result from widespread stimulus measures.
· Raising bullion’s appeal for holders of other currencies, the dollar slipped to a more than one-week low.
· Investors awaited Fed Chairman Jerome Powell’s speech before a virtual Economic Club of New York event at 1900 GMT on Wednesday.
· Auto-catalyst platinum , meanwhile, rose 2.3% to $1,183.55, after hitting $1,189.90, its highest since August 2016.
· “While a fabrication surplus is expected this year, strong investment demand should once again push the platinum market into a deficit,” UBS analysts wrote in a note.
“Other supporting drivers include low real U.S. interest rates, a weaker U.S. dollar, and global economic recovery thanks to aggressive monetary and fiscal stimulus measures.”
· Silver gained 0.4% to $27.36 an ounce, palladium added 0.1% to $2,333.29.
· Bitcoin soars above $48,000 to new record after Tesla’s $1.5 billion investment: CNBC After Hours
· Biden endorses Democratic proposal for income threshold for stimulus checks
President Joe Biden said on Tuesday he agreed with a proposal by Democratic lawmakers that would send $1,400 stimulus checks to Americans earning up to $75,000 in income and households making up to $150,000.
· Biden says coronavirus relief should be limited to making less than $250,000
White House Press Secretary Jen Psaki said on Tuesday that President Joe Biden was open to limiting coronavirus relief by income, and was disinclined to give aid to people who make more than $250,000.
· Biden and Yellen met with CEOs of JPMorgan, Walmart, Gap to talk stimulus
The discussion began with a 15-minute speech from Biden, who stressed the need to combat virus and help economy at same time, a meeting attendee told CNBC’s Kayla Tausche.
Yellen, a former chair of the Federal Reserve, has stressed the importance of acting quickly to flush the U.S. economy with more fiscal support even after the $900 billion bill Congress passed in December. Without it, the labor market recovery could take years instead of a complete rebound by next year, she said over the weekend.
Though the U.S. economy rebounded sharply in summer 2020, that progress has plateaued if not partially reversed this winter as the hospitality, travel and food service industries continue to struggle under the impact of the coronavirus pandemic.
· Senate Democrats attempting to get minimum wage hike in U.S. COVID-19 aid
Democrats in the U.S. Senate continue to try to find a way to include a minimum wage increase in a comprehensive COVID-19 relief bill they aim to advance in coming weeks, Senate Majority Leader Chuck Schumer said on Tuesday.
· U.S. House panels to vote on $57 billion boost for transportation
Two U.S. House panels will vote Wednesday on a plan to provide about $57 billion in assistance to transportation sectors and workers as part of a $1.9 trillion COVID-19 relief plan.
· Senator Manchin urges Biden to reverse opposition to Keystone XL pipeline
The head of the U.S. Senate energy committee, Joe Manchin, on Tuesday urged President Joe Biden to reverse his opposition to the Keystone XL pipeline, saying the project provides union jobs and is safer than transporting the oil via trucks and trains.
· CORONAVIRUS UPDATES:
Global Cases: 107.37 (+370,671)
Global Deaths: 2.34M (+12,614)
No. 1
U.S. Cases: 27.79M (+90,039)
U.S. Deaths: 479,418(+2,910)
No. 2 -7
India Cases: 10.85M (+10,510)
Brazil Cases: 9.60M (+51,733)
Russia Cases: 3.99M (+15,019)
UK Cases: 3.97M (+12,364)
France Cases: 3.36 (+18,870)
Spain Cases : 3.00 (+16,402)
Asian Updates:
No. 37
Japan Cases: 406,766 (+1,776)
Japan Deaths: 6,476 (+81)
No. 72
Myanmar Cases: 141,448 (+21)
Myanmar Deaths: 3,180 (+3)
No. 83
China Cases: 89,720 (+14)
China Deaths: 4,636
No. 86
South Korea Cases: 81,487 (+302)
South Korea Deaths: 1,482 (+8)
No. 115
Thailand Cases: 23,746 (+189)
Thailand Deaths: 79
· WHO says Covid ‘most likely’ originated in animals and spread to humans, dismisses lab leak theory
· U.S. to scrutinize WHO report that rules out COVID-19 came from Chinese lab
The Biden administration is looking forward to scrutinizing data included in a World Health Organization report released on Tuesday that said the COVID-19 virus did not originate in a laboratory in Wuhan, China, White House press secretary Jen Psaki said.
· COVID may have taken 'convoluted path' to Wuhan, WHO team leader says
The head of a World Health Organization-led team probing the origins of COVID-19 said bats remain a likely source and that transmission of the virus via frozen food is a possibility that warrants further investigation, but he ruled out a lab leak.
· Two new variants of coronavirus found in England under investigation
Two new COVID-19 variants, one of which has been classified as a “concern”, have been identified in England with some similarities to the South African and Brazilian variants, a government advisory scientific committee said on Tuesday.
One of the new variants, first identified in Bristol, has been designated a “Variant of Concern”, by the New and Emerging Respiratory Virus Threats Advisory Group.
The other, first identified in Liverpool, has been designated as a “Variant under Investigation” by the group.
The new variants have the E484K mutation, which occurs on the spike protein of the virus, which is the same change as has been seen in the South African and Brazilian variants that have caused international concern.
· Austria to isolate province in EU's worst outbreak of South African coronavirus variant
· J&J CEO says people may need annual Covid vaccine shots for the next several years
· Pandemic job pain fell unevenly on minorities and the poor, NY Fed researchers found
Black workers, women and others in low-paying jobs were more likely to become unemployed during the pandemic, faced greater health risks if they did keep working and are being pushed out of the labor market at faster rates, according to research released by the Federal Reserve Bank of New York on Tuesday.
· Merkel wants German lockdown to continue until March: sources
· Inflation likely increased slightly in January, bolstered by rising gas prices
Investors are waiting for inflation to pick up, but the consumer price index should show just a slight gain in January, boosted by rising gasoline prices.
Economists expect a consensus 0.3% increase in the index, a measure of inflation, or a year-over-year gain of 1.5%, according to Dow Jones. Excluding food and energy, it is projected to rise by 0.1%.
The CPI report is scheduled to be released at 8:30 a.m. ET Wednesday.
· Tesla purchases $1.5 billion in bitcoin — here’s what could happen next
Dan Ives, managing director of equity research at Wedbush, sees upside for the stock.
Mike Novogratz, founder of Galaxy Digital, sees this as a pioneering move that other companies will adopt.
“Every company should be looking at how to accept digital currencies, digital payments as part of their business scheme. It’s not that difficult. It’s what customers want, it’s where the world is moving. And so that I think he’s getting ahead of the curve, and I think you’re going to see every company look to figure out how they could, from McDonald’s to Bojangles, you name it.”
Mohamed El-Erian, chief economic advisor at Allianz, said this should give bitcoin a boost.
· This is why stock investors shouldn’t fear rising interest rates
Rising rates are not a problem for stocks right now, but they do create some level of concern in the stock market.
Strategists say Treasury yields are rising on stimulus and the outlook for better growth, but if they rose too quickly it would hurt the stock market.
Investors should look at more cyclical sectors, including financials, as rates rise.
· U.S. closely monitoring India-China border disputes: State Dept.
· China poses serious strategic threat to Canada, says Canadian spy agency head
China poses a serious strategic threat to Canada, both through attempts to steal secrets and a campaign to intimidate the Chinese community, the head of Canada’s spy agency said on Tuesday in a rare public appearance.
The remarks by Canadian Security Intelligence Service (CSIS) Director David Vigneault mark the second time in a few months that Ottawa - mired in a broad diplomatic and trade dispute with Beijing - has identified China as a problem actor.
· EU to ask for more time to ratify Brexit trade deal, Frost says
· Italy's parties enthuse over Draghi, 5-Star postpones online vote
Italy’s political parties on the left and right enthused at the prospect of backing a Mario Draghi government after meeting the prime minister-designate on Tuesday as he wrapped up his second round of consultations.
· Senators vote to proceed with Trump's impeachment trial after graphic video
· South Korea January jobs fall at sharpest pace in more than two decades
South Korea’s unemployment rate soared to a 21-year high in January, while the number of people employed fell at the sharpest pace in more than two decades, government data showed on Wednesday.
The seasonally adjusted unemployment rate jumped to 5.4% in January, the highest since 1999, data from the Statistics Korea showed.
· North Korea's Kim lays out paths to take with South Korea, external affairs
Reference: CNBC, Reuters, Worldometers
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