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Gold falls on firmer dollar and U.S. yields

· Gold slipped on Thursday weighed down by a stronger dollar and higher U.S. Treasury yields, but prospects of more fiscal stimulus under a Democrat-led administration in Washington capped losses.

· Spot gold fell 0.3% to $1,913.87 per ounce. U.S. gold futures settled up 0.3% at $1,913.60.

· Prices slipped as much as 2.5% after scaling their highest since Nov. 9 on Wednesday, as 10-year U.S. Treasury yields jumped above 1% for the first time since March.

· The higher treasury yields are pulling some “flight to safety money out of the gold market,” said Bob Haberkorn, senior market strategist at RJO Futures. But while the stronger dollar is weighing on gold, the greenback’s upside is likely to be “short lived,” he added.

· The dollar index rebounded from a multi-year low, making bullion less attractive for other currency holders. A Democrat victory in the U.S. Senate runoffs stoked inflation expectations as investors raised bets for more fiscal stimulus, while the U.S. Congress certified President-elect Joe Biden’s win.

“The double Democratic win in Georgia increases expectations of larger stimulus support and higher infrastructure spending,” Standard Chartered Analyst Suki Cooper said, adding the resultant higher inflation expectations would support upward momentum in gold.

· On the technical front, gold is no longer in ‘overbought’ territory and $1,965 an ounce is a key resistance level, she said, with near term support around $1,894. The non-yielding metal is considered a hedge against inflation and currency debasement likely to be spurred by widespread stimulus measures.

“There’s going to be more downside for the dollar, and that’s also going to be bullish for the metals,” said Kitco Metals senior analyst Jim Wyckoff.

· Silver fell 1% to $27.02 an ounce. Platinum rose 0.8% to $1,110.33, and palladium slipped 1.2% to $2,408.69.

· Dollar up from 2018 lows on economic hopes, euro profit-taking

The dollar bounced on Thursday from levels not touched since March 2018 to its highest in a week as investors looked at the potential for an economic rebound in upcoming quarters and investors who had been betting on the euro took profits.

The dollar index, which measures the U.S. currency against a basket of peers, rose 0.53% at 89.785 after climbing as high as 89.979, with the euro down 0.43% to $1.2272.

· CORONAVIRUS UPDATES:

Global Cases: 88.44M (+790,698)

Global Deaths: 1.90M (+14,216)

U.S. Cases: 22.10M (+246,502)

U.S. Deaths: 373,714 (+3,724)

India Cases: 10.41M (+18,106)

India Deaths: 150,606 (+234)

U.K. Cases: 2.88M (+52,618)

U.K. Deaths: 78,508 (+1,162)

TH Cases: 9,636 (+305)

TH Deaths: 67 (+1)

Myanmar Cases: 128,772 (+594)

Myanmar Deaths: 2,799 (+14)

· UK extends England entry ban to travellers from 11 African countries for COVID variant

· Moderna CEO says vaccine likely to protect for 'couple of years'

· Fed's Evans says probably 2024 before rates start to rise

Chicago Federal Reserve President Charles Evans on Thursday said he believes the Fed will likely hold rates near zero until 2024 to give inflation time to return to 2%.

· Fed's Evans says QE fate depends on inflation outlook

Chicago Federal Reserve President Charles Evans on Thursday said that if inflation does not look on track to return to 2% later this year, the U.S. central bank may need to do more with its asset purchase program to convince markets it is serious.

“If unemployment is coming down to 5%, we are going to be making progress to getting inflation up to our 2% objective and beyond that (and) we may not need to do more in terms of asset purchases” and could even taper them, Evans told reporters after speaking to bankers associations in Wisconsin and Indiana.

But if he became concerned about the inflation outlook, he said, “I’d be advocating for stronger asset purchases.”

· Bullard: Loose Fed, post-pandemic boom could set stage for higher inflation

The combination of easy monetary policy, ample government spending, and a possible economic surge once the pandemic lifts could spark faster-than-expected inflation, St. Louis Federal Reserve President James Bullard said on Thursday.

· Fed sees rising bond yields, inflation expectations as a possible win

A recent rise in U.S. bond yields and market inflation expectations have bolstered Federal Reserve officials’ hopes the central bank’s new monetary policy approach is taking hold and could be further buoyed if a Democratic-led Congress rolls out more spending.

“I am encouraged to see the rise in market indicators of inflation expectations. ... That is what we are trying to support,” Richmond Federal President Thomas Barkin said on Thursday in an interview with Reuters.

· December jobs report could be weaker than forecast, due to Covid impact

December’s job growth likely slowed dramatically from November’s pace and could even be negative, as businesses and consumers responded to the spreading coronavirus.

Economists expect 50,000 jobs were added in December, slightly more than a fifth of the 245,000 in November, according to Dow Jones. The unemployment rate is expected to rise slightly to 6.8% from 6.7%. The report is out at 8:30 a.m. ET on Friday.

“I think it’s 50/50 whether it’s going to be up 50,000 or down 50,000. We’re kind of on the knife’s edge between creating additional jobs and the recovery falling back a step,” said Chris Rupkey, chief financial economist at MUFG Union Bank.

· Trump for first time acknowledges new administration will take office Jan. 20

· World shocked by Trump supporters' attack on U.S. democracy

· Trump banned from Facebook after violent mob of supporters storm U.S. Capitol: CNBC After Hours

· U.S. taxpayers to pay Capitol siege tab as government shuns insurance

· U.S. transportation chief resigning after Trump supporters storm Capitol

· President Trump’s business allies start to distance themselves from him after Capitol Hill riot

After years of defending and sticking by him, several of President Donald Trump’s allies in the business world started to distance themselves from him after Wednesday’s deadly riot on Capitol Hill.

The pullback casts doubt on whether these business leaders will back him in the future – including whether he runs for president again in 2024.

· Pompeo, Mnuchin among Cabinet secretaries who discussed 25th Amendment with staff, sources say

Treasury Secretary Steven Mnuchin and Secretary of State Mike Pompeo were among the Cabinet secretaries who discussed the possibility of invoking the 25th Amendment to remove President Donald Trump, three sources told CNBC.

They determined the process of elevating Mike Pence to the presidency could take more than a week, diluting its effects.

· North Korea's party congress discusses South Korea, foreign policy

Reference: CNBC, Reuters, Worldometers