• MTS Gold Morning News 20200804

    4 Aug 2020 | Gold News
 

Gold pulls back from record high as dollar rebound weighs

· Gold prices retreated from a record high on Monday after the dollar strengthened and investors booked some profits, with the focus now on proposals for new U.S. coronavirus aid to extend relief benefits to jobless Americans.


· Spot gold was down 0.1% at $1,972.52 per ounce at 1:46 p.m. EDT (1746 GMT), after hitting a record high of $1,984.66. U.S. gold futures settled mostly unchanged at $1,986.30.


· “The pullback is just technical because we’re so close to $2,000 level and there’s profit taking and strengthening of the dollar has also caused gold to pause here,” said Bob Haberkorn, senior market strategist at RJO Futures.

“I think a trade through $2,000 is waiting on to see what the U.S. Congress does.”


· Investors await signs of an agreement on U.S. coronavirus aid legislation that lawmakers are struggling to hammer out.


· Bullion has surged about 30% so far this year, supported mainly by lower interest rates and widespread stimulus by global central banks to ease the economic blow from the pandemic.


· Weighing on gold, the dollar rose 0.3% against rivals, making bullion expensive for holders of other currencies, and U.S. manufacturing activity neared a 1-1/2-year high in July.


· Virus cases have topped 18 million globally, with major cities announcing fresh restrictions to curb infections.


· “There’s no doubt that the backdrop remains highly constructive, with negative real yields for the foreseeable future. We’ve subsequently revised up our 6–12 month target to $2,300 per ounce,” ANZ analysts wrote in a note dated Friday.

“Even so, we’re mindful that if economic sentiment improves in coming quarters, the hurdle for continued growth in investor demand may make the path to this level an arduous one.”


· Silver eased 0.4% to $24.26 per ounce, platinum rose 1.1% to $916.66, and palladium was flat at $2,091.11.


· Mnuchin says 'a little bit' closer to larger virus aid deal

U.S. Treasury Secretary Steven Mnuchin said after separate meetings with Democratic and Republican congressional leaders on Monday that the two sides were getting “a little bit” closer to agreeing on a larger package of coronavirus economic aid.

“We’re open to a bigger package if we can reach an agreement,” Mnuchin told reporters.

But White House Chief of Staff Mark Meadows, asked if Republicans would need to go above $1 trillion for a deal, told reporters “we’re so far apart right now that’s not even a valid question.”


· Fed's Evans says ball is in Congress' court on U.S. economy

Chicago Federal Reserve Bank President Charles Evans on Monday called forcefully for more U.S. government spending to support the economy, saying it is up to lawmakers and the White House to put the job market back on track toward health.

“Aggregate demand trouble is brewing with the expiration of these relief policies,” including supplemental jobless benefits and a national moratorium on evictions that ended last month, Evans told reporters on a call. “The punch line ought to be, ‘the ball is in Congress’ court.’ Fiscal policy is really fundamental for getting us going forward.”

In making that point Evans joined several other Fed policymakers on Monday, even as congressional Democrats and Trump administration officials made little progress on crafting a coronavirus relief bill to follow a $2.3trillion package passed in March.


Fed policymakers call for fiscal support to save U.S. economy

The U.S. economy, battered by a resurgence in the spread of COVID-19, needs increased government spending to tide over households and businesses and broader use of masks to better control the virus, U.S. central bankers said on Monday.

The calls for increased government intervention came as U.S. lawmakers and the White House resumed talks on a new government relief package, including a possible extension of unemployment benefits that expired on Friday.

Echoing those sentiments in slightly different terms were Dallas Federal Reserve Bank President Robert Kaplan and St. Louis Fed President James Bullard. Kaplan pushed back on the notion that the extra $600 weekly benefits to the unemployed had made it harder for businesses to hire, while Bullard said earlier efforts to keep businesses and households whole through the crisis have paid off so far.

“We’ve looked at a number of studies, we’ve done our own work: we don’t see it as much in the data but I can tell you I’m hearing it from business people,” Kaplan told Bloomberg TV earlier Monday when asked about whether the enhanced jobless aid was deterring people from returning to work.

“While it may have made it hard for certain individual businesses to hire, it has helped create jobs, because it has helped bolster consumer spending, so the net effect still has probably been positive for the economy for employment.”

Kaplan also said he did not agree with his colleague, Minneapolis Fed President Neel Kashkari, who at the weekend said he thought the U.S. economy should shut back down again for four to six weeks to suppress spread of COVID-19.


· CORONAVIRUS UPDATE:

  

Ø  Total confirmed cases: More than 18,434,782

Ø  Total deaths: At least 696,803

Ø  US cases: At least 4,862,073 (+48,521), and deaths: 158,915 (554)

Ø  Brazil cases: At least 2,751,665 (+17,988), and deaths: 94,702 (+572)

Ø  India cases: At least 1,855,331 (+50,629), and deaths: 38,971 (+810)


· Trump says U.S. may have coronavirus vaccine ‘far in advance’ of end of the year

President Donald Trump said Monday the U.S. may have a coronavirus vaccine available to the public ahead of the administration’s goal of the end of the year or early 2021.

He mentioned vaccine candidates from drug companies Pfizer and Moderna, which both began late-stage trials for their leading vaccine candidates last week, and have already vaccinated “several hundred people,” according to senior administration officials. Both potential vaccines use mRNA molecules, which scientists hope will provoke an immune response to fight the virus.


· New Jersey governor retightens restrictions on indoor gatherings after COVID-19 surge

New Jersey Governor Phil Murphy on Monday announced he was retightening restrictions on indoor gatherings after a recent surge in coronavirus cases in the state that officials have, in part, linked to house parties and indoor events.

Murphy said such events will now be limited to 25% of a room’s capacity with a maximum of 25 people, down from the previous limit of 100.

“The actions of a few knuckleheads leaves us no other course,” Murphy said at a news briefing. “We have to go back and tighten these restrictions once again until we begin to see the numbers of cases decrease.”

The restrictions will not apply to weddings, funerals and memorial services, and religious and political activities protected under the First Amendment, Murphy said.


· As coronavirus cases rise, Africa’s economic recovery hangs in the balance

As many African nations have emerged from strict lockdown measures over the month of July, coronavirus cases have accelerated across the continent, casting doubt over the prospect of an imminent economic recovery.

The World Health Organization warned last week that Africa could be headed for a worse outbreak than the current numbers are suggesting, with total confirmed cases on the continent nearing 1 million and the true extent of the spread uncertain due to comparatively low levels of testing.

Figures released Monday showed South Africa’s manufacturing PMI (purchasing managers’ index) fell from 53.9 in June to 51.2 in July, cooling for the first time following two months of consecutive improvement from its April trough.


· Trump floats election delay, lawmakers in both parties reject idea

President Donald Trump on Thursday raised the idea of delaying the Nov. 3 U.S. elections, an idea immediately rejected by both Democrats and his fellow Republicans in Congress - the sole branch of government with the authority to make such a change.

Critics and even Trump’s allies dismissed the notion as an unserious attempt to distract from devastating economic news, but some legal experts warned that his repeated attacks could undermine his supporters’ faith in the election process.


Reference: CNBC, Reuters

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