REUTERS/ K. Sathya Narayanan

Gold rises on U.S.-China trade concerns; platinum hits near 2-year peak

January 15, 2020

“Gold on Wednesday rose from an over one-week low hit in the last session on renewed worries about U.S.-China relations ahead of the signing of an initial trade deal.  Among other precious metals, palladium climbed to a record high and platinum surged to its highest in nearly two years.  Just a day before the signing an interim trade deal, U.S. Treasury Secretary Steven Mnuchin on Tuesday said tariffs on Chinese goods would be in place until the completion of a Phase 2 agreement.

Spot gold rose 0.4% to $1,552.08 per ounce as of 1341 GMT, having slipped to a more than one-week low of $1,535.63 in the previous session. U.S. gold futures gained 0.5% to $1,552.60. ‘The market is uncertain regarding the deal between U.S. and China, while somewhat weaker equity markets and weaker U.S. dollar are (also) supporting gold prices,’ Commerzbank analyst Eugen Weinberg said. ‘The tariffs are not to be reduced any further until the U.S. election cycle is over in November and that doesn’t help in bringing in the confidence into the market.’ World stocks eased off record highs as euphoria over the trade deal depleted.”

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KITCO NEWS/Jim Wyckoff

Gold, silver prices see corrective bounces at mid-week

January 15, 2020

Gold Silver Corrective BouncesGold and silver prices are firmer in early U.S. futures trading Wednesday. The metals are seeing rebounds following recent selling pressure and as global stock markets on Wednesday are pausing from their recent rallies that pushed U.S. indexes to record highs Tuesday. February gold futures were last up $4.70 an ounce at 1,549.30. March Comex silver prices were last up $0.048 at $17.79 an ounce.  Asian and European stock markets were mixed to weaker overnight. U.S. stock indexes are pointed toward slightly lower openings.

The marketplace at mid-week is focused on the U.S.-China partial trade agreement that is scheduled to be signed Wednesday in Washington, D.C. China has pledge to buy $200 billion in U.S. goods over the next two years. Specifics on what amounts spent on what products are not likely to be revealed at the signing. There is some concern in the marketplace that the trade deal will not have the U.S. lifting its trade tariffs on China imports until later this year, which has put some mild pressure on global stock markets …  In other overnight news, economic growth in the European Union’s workhorse country, Germany, fell to a six-year low in 2019, at only 0.6% annual expansion. Meantime, Euro zone industrial growth was up 0.2% in November but down 1.5%, year-on-year, it was reported today.”

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FOX NEWS/Brooke Singman

Pelosi announces impeachment managers to prosecute case against Trump

January 15, 2020

Impeachment Inquiry“House Speaker Nancy Pelosi on Wednesday announced the seven lawmakers who will serve as the House managers to prosecute the case against President Trump in his Senate impeachment trial, which is expected to begin in earnest next week. The House managers include House Intelligence Committee Chairman Adam Schiff, D-Calif., who will be the lead manager and who led much of the impeachment inquiry out of his committee with dramatic hearings to develop the case against the president and House Judiciary Committee Chairman Jerrold Nadler, D-N.Y., whose panel drafted the articles of impeachment. Pelosi also tapped House Democratic Caucus Chairman Hakeem Jeffries, D-N.Y.; Rep. Jason Crow, D-Colo.; Val Demings, D-Fla.; Sylvia Garcia, D-Texas; and Zoe Lofgren, D-Calif.

During then-President Bill Clinton’s impeachment in 1999, there were 13 House impeachment managers. A White House official told Fox News on Tuesday that the president’s legal defense team in the looming impeachment trial would be led by White House Counsel Pat Cipollone. The official said that Trump lawyer Jay Sekulow would also serve on the president’s defense, as well as Cipollone deputies Michael Purpura and Patrick Philbin … After several days of procedural moves, the Senate is poised to launch into the heart of the impeachment trial as early as next Tuesday. Senate Majority Leader Mitch McConnell, R-Ky., shot down the notion being floated by the president earlier this week to bypass a trial and dismiss the articles altogether.”

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MARKET WATCH/Steve Goldstein

Investors are right to reboot worries over trade, HSBC strategist says

January 15, 2020

Worries Over Trade“The long-awaited phase-one trade deal between the U.S. and China is due to be signed on Wednesday, but the uncertainty may still linger. Joseph Little, global chief strategist for HSBC Global with about $500 billion of assets under management, told MarketWatch the tensions around trade aren’t fully resolved. ‘There are still concerns about the macro outlook, about the structure internationally with the U.S. still challenging the nominations for the World Trade Organization,’ he said. ‘The [trade] environment remains very much in flux and a source of concern and challenge for investors.’

That uncertainty—not just in trade but across politics, the economy and the environment—is likely to limit returns across assets. ‘I think it’s hard to get very confident that we’re going to see a significant, strong synchronized global phase of expansion, and equally in investment markets, I think it’s hard to get very positive that we’re going to see a very strong phase of market returns.’ That said, Little isn’t a bear and says U.S. stocks can return 6% or 7% this year. He doesn’t put much emphasis on data showing price-to-equity ratios are elevated. ‘I’m an asset allocator, the critical question is how the opportunity set looks today, not how equity markets are trading relative to how they’ve been trading in the past,’ he says. ‘If you’re being offered a relative return 4% to 5% above what you can get in core fixed-income asset classes, I think at this stage of the cycle, given the macro trends that we have seen and the profit trends that we’re seeing, that’s not too bad.’”

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CNBC/Natasha Turak

‘Danger tomorrow’: Rouhani makes threat to US and EU troops in Middle East

January 15, 2020

Troops in Middle East“In an angry speech on state television, Iranian President Hassan Rouhani lashed out at the U.S. and Europe for its presence in the Middle East and for what he described as the latter’s failures in upholding the 2015 Iranian nuclear deal. U.S. troops are ‘insecure’ in the region today, and EU troops ‘might be in danger tomorrow,’ Rouhani declared, according to a Reuters translation, marking the first time the leader has directed a threat toward European forces in the region. He demanded the U.S. leave and accused it of making the region insecure, saying it should ‘apologize to Tehran’ for its ‘previous crimes.’

The U.S. has significantly increased its troops presence in the Gulf in the past year as shipping and oil facilities have come under fire from attacks blamed on Iran, which Tehran denies. The U.K. has about 400 forces in Iraq, spread around Irbil, Baghdad and Taji, all locations that have been targeted by Iraqi Shiite militias backed by Iran’s Quds Force, the external operations wing of the Islamic Revolutionary Guard Corps. EU forces are also stationed in the Gulf Cooperation Council (GCC) countries, and France and Britain have small numbers of special forces in Syria. A number of EU countries have personnel in Operation Inherent Resolve, the anti-IS coalition, stationed in Iraq … Rouhani also slammed the EU’s ‘failure to keep its promises’ under the nuclear deal, the multilateral agreement signed in 2015 designed to limit Iran’s nuclear program while lifting economic sanctions.”

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CNBC/Silvia Amaro

Fed could use negative rates if US recession strikes, Goldman Sachs chief economist predicts

January 15, 2020

Fed Could Use Negative Rates“U.S. rate-setters could set negative interest rates in the future, despite their own current doubts about the risks of this unconventional measure, Goldman Sachs told CNBC Wednesday. When central bankers implement negative interest rates, it means that banks, for instance, are paying to store cash. The idea behind it is to boost bank lending, push capital out to businesses, and stimulate the economy. This has been the policy by the European Central Bank (ECB) in the euro zone, since the aftermath of the debt crisis of 2011.

However, part of the financial community is skeptical about using this tool, especially over a prolonged time. They believe negative rates have consequences, such as denting banks’ balance sheets, which could have wider impacts on the economy. The U.S. Federal Reserve shares this view.

‘Negative interest rates would entail risks of introducing significant complexity or distortions to the financial system,’ minutes from the Federal Reserve meeting in October said. Fed officials added that ‘the financial system in the United States is considerably different from those in countries that implemented negative interest rate policies, and that negative rates could have more significant adverse effects on market functioning and financial stability here than abroad.’ However, Jan Hatzius, chief economist at Goldman Sachs, told CNBC this might change in the future.”

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