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Gold Down Over Rising Hopes for U.S. Stimulus Talks

Published 12/01/2020, 11:25 PM
Updated 12/01/2020, 11:27 PM
© Reuters.

By Gina Lee

Investing.com – Gold was down on Wednesday morning in Asia, with increasing optimism over U.S. talks for the latest stimulus measures and a COVID-19 vaccine seeing a retreat from the safe-haven yellow metal.

Gold futures were down 0.32% at $1,813.15 by 12:25 AM ET (4:25 AM GMT), remaining over the $1,800 mark. Holdings of the SPDR Gold Trust (P:GLD) also fell 0.3% to 1,191.28 tons on Tuesday, from 1,194.78 tons on Monday.

Optimism grew after House of Representatives Speaker Nancy Pelosi and U.S. Treasury Secretary Steve Mnuchin held their first talks for the latest stimulus measures since the Nov. 3 presidential elections.

On the Republican side, Senate leader Mitch McConnell on Tuesday urged Congress to include a fresh wave of measures in a $1.4 trillion spending bill, aimed at heading off a government shutdown amid COVID-19. McConnell also teased a revised version of his own plan to fellow Republicans.

Emergency lending programs set up by the Federal Reserve during the pandemic could be revived quickly after they expire at year-end, senior New York Federal Reserve official Lorie Logan told a virtual discussion on Tuesday.

Although both Chicago Fed President Charles Evans and San Francisco Fed President Mary Daly said that they saw no immediate need for further monetary stimulus, Evans did call for more fiscal support.

Fed Chairman Jerome Powell was more cautious, issuing a warning that the U.S. economy remains in a damaged and uncertain state during his testimony at Tuesday’s Senate Banking Committee hearing. Powell will testify before Congress again later in the day. The Fed also meets for its policy meeting on Dec. 15 and 16.

Meanwhile, as the number of global COVID-19 cases continues to rise, a plan to inoculate Americans against COVID-19 as soon as mid-December was unveiled on Tuesday.

Developers could potentially meet that deadline, with BioNTech SE (F:22UAy) saying that shipment of the first doses of its candidate BNT162b2, co-developed with Pfizer Inc (NYSE:PFE), could happen “within hours” after approval.

Meanwhile, Moderna Inc (NASDAQ:MRNA) also announced plans earlier in the week to request clearance for its candidate mRNA-1273 in the U.S. and Europe. Both developers have applied for emergency European Union approval on Tuesday.

Latest comments

"1,191.28 tons" Gina Lee, you've made these gold holding claims before but I still have yet to see you provide some verifiable evidence to support any of these claims. How reliable are GLD's holding reports? GLD does not give retail investors the right to redeem for any of its mystery physical gold holdings. This fact alone ensures the GLD shares to be nothing more than paper at the end of the day. GLD also has a glaring audit loophole in their prospectus that states they have no right to audit subcustodial gold holdings. To this day, I have not heard of a single good reason for the existence of this backdoor.  I remember there was a highly publicized visit by CNBC's Bob Pisani to GLD's gold vault. This visit was organized by GLD's management to prove the existence of GLD's gold but the gold bar held up by Mr. Pisani had the serial number ZJ6752 which did not appear on the most recent bar list at that time. It was later discovered that this "GLD" bar was actually owned by ETF Securities.
Also even on the subject of GLD's insurance, they are not at all straightforward about it. Their representatives will not confirm nor deny the existence of GLD's insurance. I recommend anyone curious about this to confirm via calling GLD's publicly listed number for general inquiries at 866 320 4053 and ask about this clause from the GLD prospectus: "The Custodian maintains insurance with regard to its business on such terms and conditions as it considers appropriate which does not cover the full amount of gold held in custody." Exactly how much of the fund is insured? They will not give you a straight answer and might even throw in some bizarre excuse which I've experienced. Why hide this information from investors? The people behind GLD certainly do not seem like the most honest types.
Another air-headed analysis ...
"Gold Down Over Rising Hopes for U.S. Stimulus Talks"......journalism is dead.
LMAO. My thoughts exactly. This reporter doesn't understand macroeconomics.
Gold down because stimulus? it makes no sense. The stimulus is one thing that can definitely push gold prices much higher
Gold isn’t down because of the stimulus hopes. That would make Gold futures go up as the dollar would be devalued with further stimulus of a trillion dollars. Gold would be down because of “Vaccine” hopes. Reuter’s, please watch your headlines. That one was a silly error.
Thanks
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