China, Russia hold off on congratulating Biden; U.S. allies rally round
China and Russia held off congratulating U.S. President-elect Joe Biden on Monday, with Beijing saying it would follow usual custom in its response and the Kremlin noting incumbent Donald Trump’s vow to pursue legal challenges.
Democrat Biden clinched enough states to win the presidency on Saturday and has begun making plans for when he takes office on Jan. 20. Trump has not conceded defeat and plans rallies to build support for legal challenges.
Some of the United States’ biggest and closest allies in Europe, the Middle East and Asia quickly congratulated Biden over the weekend despite Trump’s refusal to concede, as did some Trump allies, including Israel and Saudi Arabia.
German Chancellor Angela Merkel on Monday called for the European Union and United States to work “side by side”, holding up Biden as an experienced leader who knows Germany and Europe well and stressing the NATO allies’ shared values and interests.
Beijing and Moscow were cautious.
“We noticed that Mr. Biden has declared election victory,” China’s foreign ministry spokesman Wang Wenbin told a daily media briefing. “We understand that the U.S. presidential election result will be determined following U.S. law and procedures.”
Gold slides more than 2% as Pfizer vaccine news boosts risk appetite
Gold beat a sharp retreat on Monday, sliding over 2% after Pfizer said initial data from a large study showed its COVID-19 vaccine was more than 90% effective, sending stock markets soaring and denting bullion’s safe-haven appeal.
Spot gold slipped 2.2% to $1,908.55 per ounce, while U.S. gold futures fell 2.2% to $1,908.90.
Earlier spot prices climbed to their highest since Sept. 16 at $1,965.33, driven by a weak dollar amid hopes for more stimulus following Joe Biden’s victory in the U.S. elections.
Pfizer and German partner BioNTech SE , the first drugmakers to show successful data from a large-scale clinical trial of a vaccine, said they expect to seek U.S. emergency use authorization for the drug later this month.
“There’s some belief that this is going to be a driver for economic growth as we come out of the pandemic situation, so it’s positive news for the world, but negative news for gold,” said independent analyst Ross Norman.
The news prompted sharp gains in stock markets, and set Wall Street up for a record. However weakness in the dollar index, which held close to an over 10-week low, kept gold above the key $1,900 level.
Don’t Bank On A Big Economic Stimulus From Congress’ Lame Duck Session
Last Friday, Senate Majority Leader Mitch McConnell (R-Ky.) called the October jobs report, which showed the official unemployment rate dropping a full percentage point from September to 6.9%, a “stunning indication” of an economic rebound that signaled why a smaller Covid-19 relief package makes more sense than a larger one. McConnell added that the next bill should be “highly targeted towards things that are directly related to the coronavirus.” Translation: it should exclude some of the Democrats’ priorities.
House Speaker Nancy Pelosi (D-Calif.), who has for months bargained unsuccessfully with the Trump administration in pursuit of an agreement on the next federal aid bill, fired back immediately when asked about McConnell’s support of a smaller, narrower bill. “No, it doesn’t appeal to me at all,” she said at her own Friday press briefing. “This isn’t anything that we should even be looking at. It wasn’t the right thing to do before.”
Pelosi was nodding to the fact that for months, the stalemate in Washington over stimulus legislation has boiled down to the same fundamental disagreement: McConnell wants to see a smaller, targeted relief bill, while Pelosi argues that a bigger, comprehensive package is needed to fully address the needs of the American people and economy, especially when it comes to managing the coronavirus. Both McConnell and Pelosi have said Congress should pass a bill before the end of the year, but there’s no guarantee that will happen—especially because Democrats, Republicans, and the White House remain far apart on key issues including funding for schools and childcare, changes to certain tax credits, federal unemployment insurance supplements, liability protections for business, and state and local aid (though McConnell indicated Wednesday that he might be willing to make concessions on that last priority of the Democrats).